KPLC rights issue VERRY STRONG BUY FOR INVESTORS 1 YEAR HORIZON

Now here is the real deal igonre the Yasser crap

2009 PAT=3.7B
No of issued shares after split and rights=1.7B
EPS=2.18
Rights price=19.50
PE=8.94
Assume a 20% increase in 2011 Full Year EPS=2.616
Forward PE=7.45
Price Target=32(32/2.616=12.2 PE)
Capital gain=64% in one year if you buy the rights at a price of 19.50, if you buy at 24 expect capital gains of 40% in 1 year...now folks buy me a cold Windhoek Lager.

@thedeal - Some numbers need revising...
B = Billion

What do you mean By PAT 2009 of 317B???

@the deal thank you for your analysis on KPLC but dont you think your analysis on the price target is a little modest.. I say this because you have used a P/E of 12.2 while:

Industrial Sector P/E = 16.06
Kengen(peer) P/E = 19

@sheep please give G.O.K a chance... they made it pretty clear that the reason for raising their stake was not exercise control but to access cheap development loans which means less interest payments..

Another thing is that K.P.L.C is allowed by law to make a return on Assets of 10-15% meaning with its current asset base of 80 billion it can announce a profit before tax of 8-12 billion and the MPIGS can't do nothing about which is an EPS of 3-4.5...

I wonder what the value of their assets will be in 5 years????

I have an answer for each one of your reasons:
1. INEFFICIENCY: for the last 8 years it has been trying to handle this problem and its starting to pay off... Thats why in 2010 they were able to record increased profit even after lowering electricity prices for the year.

2 FAULTY METERS: @the deal you have got this one wrong.. The complaints were on the old meters and connections which were badly connected.. THERE HAVE BEEN ZERO COMPLAINTS ABOUT THE NEW METERS...

3. RECORD PROFITS AND HIGH POWER BILLS: Well they are justified to increase power bills to maintain adequate profit margins...

And are you aware that k.p.l.c's balance sheet is now way healthier than kengens???

Are you aware that kengen faces increasing competition from wind and coal and sugar suppliers of power in the near future whereas K.P.L.C will still be a monopoly when we've all left earth??

Are you aware G.O.K owns 70% of kengen whereas it owns 50.1% of K.P.L.C

so after all this what justifies kengen trading at P/E of 19 and K.P.L.C a P/E of 12???