LED - will these light up the portfolio?

Here's my take on this share:

£1=HK$15.2

Year Ended June 2005: (Pro-rata calculation from 16 months)
Turnover: $33m
Profit After Costs @ 23% margin: $6m

Year Ended June 2006:
Turnover: $102m (+300%)
Profit After Costs @ 27% margin: $28m
EPS: 1.4 pence

Year Ended June 2007:
Est Turnover: $250m (+250%)
Est Profit After Costs @ 27% margin: $68m
EPS: 3.4 pence

Historic P/E: 18p/1.4p = 12.8
Forward P/E: 18p/3.4p = 5.2

You can supplement this with a discounted cash flow analysis (calculator available here: Use an EPS of 0.014 and a growth rate of 250% for 2 years and then 0% thereafter. Using this, we can get a current valuation based on just 2 years growth at about £1 a share.

Some may argue a 250% growth rate is excessive - but for a company worth £20m producing something highly in demand very cheaply, this growth rate is achievable, but will slow down after 2-3 years as the company becomes mature. In any case, there is a forward PE valuation of 5.2 through earnings estimate and a share price estimate through DCF of £1 a share. I would expect a small, mushrooming company like this to have a PE of at least 15, which means that the share price needs to be at between 50p and £1 to warrant next year's valuation.

DYOR. IMHO this is probably the most attractive value and growth share in AIM at the moment.