This share has started to rise rapidly after the trading update which was very encouraging. The company provides batteries for mobiles etc and alternative power supplies. floated at 135p-should be a good investment with results due on April 18th.

CHNS' share price is now at an all-time high of 265p. Yet it continues to trade on a ridiculously low P/E.

Even now at 265p the P/E is just 5.6, and the m/cap is not far above tangible NAV. A 50% share price rise from here to around 400p would still mean a P/E of only 8.5. The P/E at the current price would drop to only 4.8 assuming a conservative 55p EPS next year.

And this low rating is predicated purely on CHNS' core and fast-growing telecoms business. Its excellent prospects in wind and solar power, for which it's already selling products, and electric power are in the price for free...

It's worth reiterating that:

- CHNS is the Chinese market leader in its field
- CHNS is on course for 200m of sales this year. Not bad compared to the 60m m/cap. The PSR is therefore extremely impressive
- CHNS' CEO is (from memory) Chairman of China's National Battery Association, so CHNS is likely to continue to have a large say in that country's strategy and production of batteries and energy storage systems. Not to mention the developments in wind and solar power etc...

Online on Friday you could not buy any shares at all!

And you could sell loads of shares at ABOVE the mid-price.

Which indicates that there is continuing demand for the shares, whilst there is little stock out there to satisfy demand at the current P/E of just over 5.

The signs are good based on the above.

Terrific news today - CHNS announced that 2009 PBT would be "materially ahead of market expectations":

http://www.investegate.co.uk/Article.aspx?id=201001280700062377G

Historic 2009 EPS should now be at least 52p EPS given previous forecasts of 47p EPS.

At the current 316p that's a minimum historic P/E of 6.1. And that's after an unusually large impairment charge in H1.

The "true" adjusted historic EPS for 2009 could be around 60p or more, which would leave 2010 looking at perhaps 70p+ EPS given normal impairment charges.

That's a current year P/E of 4.5.

The planned lead recycling facility might come on stream this year and would materially and quickly improve profitability.

A poster elsewhere noted a comment from the house broker - "Seymour Pierce say price target of 500p is both realistic and conservative", targeting EPS of 50.4p in 2009 and 53.8p in 2010".

Those EPS targets are VERY conservative. 50.4p EPS for 2009 is likely to be the house broker playing safe as in the past, allowing them to raise their forecasts and target prices again after the 2009 results are published soon.

The m/cap is now almost 80m. An inkling of a dual Hong Kong listing in the upcoming results would likely see a further share price rise which in itself would see the m/cap at 100m, i.e an acceptable level for such a listing.

An excellent post on ADVFN listed comparators for CHNS in terms of having lead re-cycling and battery manufacturing facilities:

"Hoppecke Batteries, Germany .. privately held
Exide .. public. On a p/e of 9 ish but laden with debt & losing money
Johnson Controls .. their energy division.
Coslight .. Asian peer listed on hk @ p/e of 19"

Battery demand from Telco's in India, China and the EU are all set to grow as 3G networks roll out, and in the EU there's a need for basestation batteries to be replaced through life-cycle redundancy.

Given that CHNS had 20m+ net cash at the end of H1 - before the seasonally much stronger in cash flow terms H2 - CHNS' cash pile could be a lot higher now.

The proposed lead recycling facility could therefore be funded by either one of or a mixture of:

- existing net cash
- use of extensive but currently unused bank loan facilities
- a small fundraising via a fundraising at a much higher share price in Hong Kong via a dual listing

Whichever way it is funded, the new facility should have a very positive impact on earnings.

As it is, the core CHNS business is evidently performing extremely well.

As I've noted before, CHNS has yet to be re-rated for its entry into renewables via:

- wind power storage products
- solar power storage
- electric bike and car batteries

On a P/E of 4 or 5 for 2010 even a 50% re-rating would leave CHNS only on a P/E of 6 to 8.

Strange company CHNS. Why talk about just PBT ?

I mean if your results are ahead they are ahead. Why say just Profit Before Tax is materially ahead, and this be followed up by a revised broker comment which puts EPS up just a little.

If your PBT is materially ahead then all your results should be, so is there something going on with tax ?

Looks murky to me, nobody just highlights PBT materially ahead.........you say your results are ahead.

Never mind, the issue here is not revenue growth or EPS, its all about cash.

The prelims should show strong cash, but the problem is always H1 results, the interims.

Cash outflow is tough in the 1st half, and they cut the interim dividend last results and now are spending lots of cash on a new recycling plant.

So while prelims for last year might be strong, whats the cash situation going to be like at the next interims (this 1st half).

I mean, if they have so much cash, why the hell did they cut the interim dividend last time ????????

Murky ?

Guess there's no pleasing some people