GRGR

Let's say the CEO is not a crook-

According to the press release and his statement, they will book the China Revenue in '08. About $28 MM / year so lets use following assumptions:

CONSERVATIVE
$20 MM in '08 Revs
10% Average Margin
= $2 MM net operating profit
50% corporate tax rate = $1 MM earnings
60 MM shares outstanding

$0.02 EPS * 7 P/E = $0.14 (current price)


Now more aggresive

$30 MM in '08 revs
15% Margin
= $4.5 MM net operating profit
35% tax rate = $2.9 MM earnings
55 MM shares

$0.05 EPS * 10 P/E $0.50

So lots of potential upside if the operations deliver and management keeps costs under control....very interesting.

XLE vs. Crude Update

Spread has come in a few points, should be some more to go: