QTM 6.98% 4.0¢ quantum health group limited

qtm in the australian again

  1. 400 Posts.
    For the full article go to http://www.theaustralian.news.com.au/common/story_page/0,5744,6805327%255E16942,00.html

    Below is the part of the article which relates to qtm.

    MICHAEL WEST
    --------------------------------------------------------------------------------
    back PRINT-FRIENDLY VERSION EMAIL THIS STORY


    A Quantum leap

    July 25, 2003
    APOLOGY: Margin Call apologises unreservedly to "investors" in Quantum Energy for endeavouring to employ a sense of humour in the constructing of equity valuations on this ludicrously overpriced and over-hyped stock.

    Email and assorted postings in ramp-rooms – sorry, make that internet chatrooms – suggest that Marge has been very bullish on Quantum. Not so.

    Let's put this quite simply. We will compare Quantum with two other companies priced by the market at about the same value.

    The market value of the mighty Quantum is now $690 million.

    Quantum's pool heating and solar heaters business was in the hands of administrators two years ago. Broke. It floated three months ago.

    On historical numbers it has sales of $1.8 million, net profit of zero (loss $1.5 million), a yield of zero and gross fixed assets of $1.1 million.

    The Bank of Queensland is ... a bank. It has been on the market since 1971. It has a market cap of $616 million (lower than Quantum). Sales are $300 million, net profit $29 million, yield 4 per cent, and there are somewhere between $100 million and $4 billion in assets (depending on how you calculate them).

    Then there is Downer EDI. It's been listed since 1990. Market cap also $690 million, sales $2.4 billion, net profit $56 million and gross assets $1 billion. You get the picture.

    Blue sky's in China

    IT must be said, though, that although track record counts for much, shares are valued on what is going to happen. On outlook. Blue sky.

    And it is here that all the excitement is being generated in the ramp-rooms where anonymous pundits post their giddy speculations.

    Quantum says its blue sky is in China (not to mention Africa – which might or might not include the lucrative Chad market), where there is huge demand for renewable energy, and heaters.

    The one report of substance to the ASX so far from the Quantmeisters is that contracts in China, "expected" to commence prior to the end of this calendar year, total $14 million.

    So we have a solid expectation. It must be remembered, though, that Quantum's young Chinese operations are joint ventures, so the $14 million will have to be split down the middle – assuming their partners – and the Chinese aren't renowned for this – act honourably in forking out to their foreign colleagues.

    Moreover, that half of $14 million is a revenue number, not income. After costs, then, a profit margin of 10 per cent (to pick a number) on $7 million would come to the gross sum of $700,000.

    So it's the end of the week again. What can we say? How about a call from Crove? Crove, we know you are out there, out there with very strong views about Quantum. How about a little call to Marge and we'll have a bet on that Quantum stock price?

 
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