EastBridge Investment Group Inc. (OTCBB: EBIG), a financial services provider to emerging public companies looking to tap the U.S. equity markets, with clients similar to New Oriental Education & Technology Group Inc. (NYSE: EDU) and Chinacast Education Corporation (Nasdaq: CAST), recently held a conference call that outlined several near-term prospects for investors.
Tsingda’s IPO Ready to Unlock Value
EastBridge Management expects Tsingda to be listed on the OTCQX at around $4-5 per share and then it will apply to up-list on the NASDAQ six months later. Based on reporting requirements, the OTCQX represents the highest level of the OTC markets. There are currently over 270 companies trading on the OTCQX averaging over $11 million in trades per company daily. With Tsingda growing at about 40% – a net income of $16 million in 2011 and a projected income of $25 million for 2012, the company expects meeting all requirements for the up listing on the NASDAQ. Meanwhile, a definitive IPO date is expected within the next 10 days.
With Tsingda Education standing ready to IPO, EastBridge appears to be significantly undervalued. Assuming a $4 share price for Tsingda and a 20x P/E for Eastbridge; Eastbridge’s 1.7 million share stake in Tsingda would be worth approximately $6.8 million. Dividing this figure by the company’s 150 million shares outstanding yields a valuation of 4.53 cents per share. With a 20x P/E, it would mean a 91 cent share price for EBIG. Even if the P/E is only 15, the projected share price for EBIG would be 68 cents per share, still a significant increase versus the current share price of approximately 8 cents per share.
Other Clients Show Marked Progress
EastBridge’s other clients are also making substantial progress towards their goals. Wonder Education will be the next IPO in the company’s pipeline and is expected to go public early next year, according to management. In the meantime, the Chinese education company continues to grow at a 20% annual rate and eyes expansion into the automotive education sector which should help it obtain a favorable P/E when the time comes.
Clients Dwarf Technology and Arem Pacific will be in New York over the next two weeks to meet with potential investors and raise additional capital. Dwarf Technology is expected to IPO early next year, while Arem Pacific expects to file an S-1 with the SEC this month. Combined, this solid progress across all of its clients could unlock tremendous value for shareholders.
A Great Investment Opportunity
EastBridge Investment Group Inc. (OTCBB: EBIG) represents an attractive investment opportunity with near-term catalysts. With the Tsingda IPO expected very soon, the company’s stock appears to be significantly undervalued given its potential. As a result, investors may want to consider adding this stock to their portfolio sooner than later.
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