LED - will these light up the portfolio?

Basic Valuation Model

Share EPIC: LED
Current Offer (p): 15
Number of Shares: 136870065
Mkt Cap (£m): 20.5

Assets - Liabilities - Intangible Assets (£m) = 4.36
Earnings Multiplier: 5 years

Forecast Earnings:
2006: £1.85m actual
2007: £2.40m est
2008: £3.13m est
2009: £4.06m est
2010: £4.10m est
2011: £4.10m est
This model assumes 30% earnings growth for 3 years after 2006 and then stagnation
Average earnings 2007-2011: £3.56m

Value = 4.36 + (5*3.56) = £21.9m
Value per share: 16p

Assumptions:

- Exchange rate for HKD as on 18/12/06
- No dividends
- Constant number of shares

This is a very basic model, but we can see that neglecting the intangible assets, patents, improvement in margins a buyer now would see payback in less than 5 years. This is IGNORING increase in capacity to meet demand from overseas. If they increase capacity like SOLA did to meet demand, this could explode.

There aren't many shares on AIM at the moment that realise value in less than 5 years using my model!