stockreads.com without $1.2 million non-recurring charge in 2008

http://stockreads.com/Stock-Newsletter.aspx?id=16104


If you are having trouble viewing this message, please go to
Company: Sino Gas Intl Holdings (OTC BB: SGAS)

Alert PPS: $0.42

Profile:

Our 4 Star Stock SGAS which we announced to the club back in August at
only $0.42 is taking off! SGAS just hit a high for us of $0.99 this
morning! We are now up 136%! 4 Stars is our second highest level of
confidence! Congratulations to those members that have been with us since
then! Here`s a quote from our initial alert -

READ Alert 8/04/09:

"After a long time researching we have finally found what could become one
of the biggest natural gas plays in the entire market over the long-term
with the most upside potential. The company I am referring to is Sino Gas
International Holdings trading on the Bulletin Board Exchange under ticker
symbol SGAS. SGAS right now is extremely cheap at only $0.42.

SGAS`s 2008 revenues were $21.45 million up 6% from 2007 revenues of
$20.27 million. SGAS`s net income was actually down though 79% from 2007
into 2008 because in 2008 57% of their revenues came from natural gas sales
and 43% from connection fees while in 2007 only 36% of their revenues came
from sales with 64% from connection fees.

As you know natural gas prices have declined significantly in the past 2
years. Also, gross margins on connection fees are much larger than natural
gas sales. One thing we noticed in the income statement is the fact that
there was a $1.2 million non-recurring charge in 2008 unrelated to business
which without this would have given SGAS net income for the year of about
$2.8 million.

Now if we take SGAS`s total outstanding shares of 25 million shares and
multiply it by the current price of $0.42 we get a market cap of only $10.5
million while they would have had $2.8 mm in net income without this one
time non-recurring charge.

Based on our calculations, if we use SGAS`s potential $2.8 million in net
income (which we think will grow in the upcoming years) divided by 25
million shares ,we get an EPS of $0.11. At the current PPS of $0.42 this
would give SGAS a P/E of only about 4!!! This is insane! Most natural gas
companies we follow have a P/E of 10-15! If SGAS had a P/E of just 10 it
would be valued 162% higher than the current price! "

Note we are now up 136%! Are we good or what!

We went on to say-

"On top of it, SGAS is already PROFITABLE, has shareholder equity of
$58.25 million, and is trading under book value! Right now, SGAS`s book
value is approximately $1.94 per share while it closed yesterday at only
$0.42! The only reason why SGAS is so low right now is because it is
completely undiscovered by the investment community! Now that our club is
giving it the awareness it deserves who knows how fast it could explode!

Now imagine if with a combination of China stocks booming, natural gas
rallying, SGAS gets their net income back up to $7.7 million as in 2007,
and it trades at a realistic P/E like 10-15! If this happens we could
potentially see our new 4 Star Stock become a TEN BAGGER!"

Congratulations everyone!