EastBridge Investment Group (OTCBB: EBIG), a provider of financial services to emerging public companies seeking to list on U.S. stock exchanges, with clients similar to companies like China Education Alliance, Inc. (NYSE: CEU) and ChinaEdu Corporation (Nasdaq: CEDU), recently competed Tsingda’s registration statement with the SEC, providing shareholders with several key insights.
In a quiet regulatory filing made with the SEC, EastBridge took a big step closer to unlocking significant value for its shareholders. Tsingda Education completed its S-1 registration statement on Friday, March 4th, which provides some key insights into just how much value EBIG shareholders can expect to see. So, how much will this stake be worth and what’s the potential moving forward?
Tsingda Education indicated that it would be registering 6,600,000 ordinary shares that are being sold by a number of entities, including 375,625 shares held by EastBridge. Meanwhile, EastBridge will retain the remainder of its 2,079,740 shares until a later date when it will have the option of selling them on the open market. Finally, the company indicated that it would be issuing a dividend of up to 300,000 shares to its own shareholders after the distribution takes place for Eastbridge shareholders on record on March 15, 2010. EastBridge will assist Tsingda in creating a market price for its stock by helping them list on a U.S. stock exchange.
Tsingda Education is a Strong Performer
In fiscal 2009, the education provider reported $14.65 million in revenues, up 101% year over year, and net income of $7.1 million, up 77.9% year over year. Meanwhile, the company’s balance sheet showed shareholders’ equity of more than $13.5 million, as of December 31, 2009. With 33,729,862 shares outstanding, these figures could translate into a favorable share price.
With net income of $7.1 million, Tsingda Education generated approximately $0.21 per share in earnings in 2009, which equates to a price-earnings multiple of around 7.6x its trailing numbers. Meanwhile, earnings seem to be only growing with EastBridge noting on its most recent conference call that the company’s management forecast 2010 revenues of $26 million and net income of $11 million for Tsingda.
A quick look at peer multiples suggests that the stock could trade at a very favorable valuation for EastBridge and its shareholders. Chinacast Education trades at a multiple of 16.12x, while ChinaEdu Corporation trades at a multiple of nearly 21x its trailing earnings. These multiples could equate to a share price of $3.36 to $4.20 per share, based on 2009 net income alone.
As a result, EastBrige shareholders may want to pay close attention to these developments as they unfold, as it could mean significant value over the near-term.
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