Take a look at these... issued at 50p already up 80%... I am stilll shaking, bought at 62.5p now 96p... stick these on your watch list

FWIW, some arithmetic.

Allowing for current number of shares in issue (post AIM float), 38 million, EPS was 1.189p. Assume this doubles at full year: 2.378p. At current SP offer of 130p, you have PE 54.7. Quite high.

The share is trading at a multiple of 10 times balance sheet net asset value of 13p. That's very high indeed! Include the 5 million raised at the float and you have 26p per share, only 20% of market cap.

GMO is apparently set to double its share capital in order to take over Wisdom Choice Investments Ltd, subject to Wisdom achieving certain earnings targets. Wisdom is at least cash generative and GMO is going to pay around 13 times projected earnings if it takes over the entire company.

This is a high-risk strategy for GMO, as its share price will need to remain buoyant if it is to have the firepower to be able to take over Wisdom without unnecessary dilution. Might not be easy.

I think I'm with Cynic on this one - better to be shy than get bitten.

GMO aims big in China

KUALA LUMPUR: GMO Ltd, jointly owned by Mesdaq-listed Green Packet Bhd, mTouche Technology Bhd and OSK Ventures International Bhd, plans to take on and beat Nasdaq-listed Internet portals like Sina.com and Tom.com to become the top wireless value-added services (WVAS) provider in China by end-2007.

GMO chief executive officer Eugene Goh said the company’s 20% acquisition of Wisdom Choice Investment Ltd for US$16.4mil with the option of acquiring the remaining shares for up to US$94.79mil was “a big step in the direction.”

“Wisdom Choice will strengthen GMO’s presence in the WVAS market in China substantially ... enabling us to take advantage of a potential customer base of more than 400 million mobile subscribers and more than one billion television viewers in China.

Eugene Goh flanked by GMO Ltd directors Puan Chan Cheong (left) and Eddie Yap at the press briefing
“With the acquisition, GMO will have a share of about 15% of the WVAS market in China,” Goh told a press briefing on the acquisition of Wisdom Choice yesterday.

China’s WVAS sales reached US$770mil in 2004 and it was estimated to grow at a compounded annual growth rate of 28%, reaching US$1.6bil in 2007.

Jersey-incorporated GMO is listed on the London Stock Exchange Alternatives Investment Market. Green Packet and mTouche have a 30% stake each in the Beijing-based company while OSK Ventures International holds 15%.

Goh said Wisdom Choice was not only the exclusive service and technology provider of ColorComm Software Technology Group, a market leader in WVAS and an interactive media company in China, but also enjoyed full economics benefits of the company.

He said ColorComm was a pioneer in the development and launch of interactive media entertainment services in the world’s most populous country.

“ColorComm has successfully penetrated more than 250 television and radio stations in China and revenue from interactive media increased seven-fold since January.

“The growth is strengthened by ColorComm’s policy of increasing two products every month,” he said.

Goh said the price for Wisdom Choice’s shares was attractive because of the synergies it provided GMO.

“It will help us jumpstart our growth to be the leading WVAS and media conglomerate in China,” he said.

GMO was expected to recoup its investment in Wisdom Choice within three years, Goh said, adding that the purchase of Wisdom Choice would be financed by a mixture of cash and debt.

He said GMO’s market capitalisation at AIM had increased to US$110mil from US$40mil since it was listed earlier this month.