Latest IHI EPS Projections

THE IHI EPS STORY

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AFUND Revised EPS Projections for IHI: 9/16/05/2004

We have included the following in our latest EPS projections:
(1) Potential share dilution from past private placement financing: 105 million to a potential 133.5 million IHI shares outstanding.
(2) All IHI JV factories will be larger "double factories" increasing from 62K to 100K sq feet.
(3) The price of IHI JV factories increased to $18 Million (16.5M plus 1.5M license fee) in 2004.
(4) Some initial product orders may be bid at 10%-15% discount to market.
(5) US Dollar weakness and Canadian Dollar strength in H2 2004 and 2005.

There is an open question on how profitable IHI factories will be. In the past, most potential Joint-Venture (JV) partners believed they would earn back their factory investment within 3 years! Company figures are conservative and suggest a 20% gross profit operating margin. However, I believe $6 square foot or more gross profit is obtainable, especially in Europe and the Middle East. A full capacity production factory may produce 40,000 square feet of panels per day. Finally, I don't believe IHI factories will be operating only 250 days in most countries, etc.

My following numbers are aggressive, but if you prefer to be conservative, discount them 25%-50%.
What will be the market's P/E reward? 15? 20? 30 or more?
To believe less than 20, given its potential McDonalds-like franchise growth, seems unlikely.

While company business plans conservatively project $25 million US$ profit per factory at full capacity (before taxes), I believe that it will be closer to 30 million US$ profit per factory at full capacity (before taxes). Given IHI receives 51% of these profits, and assuming the Delta factory reaches its FULL commercial capacity production in Q4 2004, and 1 JV factory is finished in 2005, 2 in 2006, 4 in 2007, 2008 and 2009, I estimate their EPS as follows:

2005 $ 0.05
2006 $ 0.25
2007 $ 0.50+
2008 $ 1.00+
2009 $ 2.00+
2010 $ 3.00+

Potential earning upgrades due to:

Winning the Fanuc robot lawsuit.
Many factories may operate more than 20 days a month on two shifts.
Factories could be built and put into production at a faster rate.
IHI product not being discounted except for non-profit social, education and religious building (20% of production) given strong demand due to vastly superior product quality and speed of construction.
Earnings are in US dollars which could be higher due to foreign exchange profits as overseas earnings are converted into a weaker dollar.
IHI co-participation in some development projects.

IHI's 5 year business plan is to build a total of 10 factories by 2010. My estimate is 15, 50% higher than the Company's. Our internal price projections for IHI are for a three year possible target of $30+. To compare, stocks like AOL or Microsoft in a comparable time period sold for over $3500; while stocks like Dell or Yahoo reached much greater heights in less time. We find IHI's story equally compelling.

Assumptions include IHI continuing to progress forward without undue delay as outlined in its latest business plan. Astrologically this is possible. Time will tell if this remains just an astrological probability, or whether the Bermuda chart potential materially manifests as I have plenty of reasons to both hope and expect.

Nonetheless, I continue to keep my wine cellar ready to be stocked with champagne presents from clients and friends when IHI stock reaches $30. Several long time shareholders unilaterally reduced their offer to $10, while some friends, family members and clients have already sent me Dom Perignon in anticipation of this IHI milestone. Furthermore, should I run out of space, Roger Rached, president of IHI, has kindly offered to expand it for me, using IHI construction!

Return to PART XIX: 2004 IS FINALLY TIME FOR IHI (Coming Soon)

IHI STOCK QUOTE AND CHART

PART I: IHI 98
PART II: IHI FAQ
PART III: IHI HOROSCOPES
PART IV: IHI BC HG SHOW 99
PART V: IHI 99
PART VI: IHI CORRESPONDENCE
PART VII: IHI LUXEMBOURG
PART VIII: IHI SUMMER PROGRESS
PART IX: MORE IHI Q & A
PART X: IHI Story, Part X
PART XI: IHI'S 3 VIRTUES
PART XII: LAST IHI POST
PART XIII: IHI COUNTDOWN
PART XIV: IHI COUNTDOWN PART II
PART XV: IHI COUNTDOWN PART III
PART XVI: IHI BELIEVE IT OR NOT
PART XVII: IT'S TIME FOR IHI
PART XVIII: 2004 IS FINALLY TIME FOR IHI
PART XIX: 2004 IS REALLY TIME FOR IHI

© The Astrologers Fund, Inc. Last Updated:
Disclaimer: IHI has been an AFUND client since 1994 and is currently paying monthly $2,500 consulting fees and $500 for banner ads on . our website. May 15, 2002, an affiliated company, Susan Hahn & Associates became IHI’s media representative with a monthly fee of $1500. In addition to acting as a paid consultant for IHI, The Astrologers Fund Inc., its director, employees and its clients maintain large positions in this stock. In addition, International Hi-Tech Industries is a major sponsor of our web site and we may be involved with future financings of this company. While we usually do not actively trade IHI stock as it is a long term hold for us, it is of obvious benefit to us when others buy IHI stock. Always do your own research and check with your licensed financial advisor or broker before buying or selling on the recommendations of the Astrologers Fund, Inc.

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