Additional Information
Market: AIM
Sector: Real Estate
EPIC: PMHL
Latest Price: 86.50p  (0,00%)
52-week High: 131.00p
52-week Low: 67.00p
Market Cap: 124.03M
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Prosperity Minerals
www.pmhl.co.uk

Prosperity is an  iron ore trader serving customers in the People's Republic of China (the 'PRC') and holds investments in entities involved in the manufacture and sale of cement and clinker in the same market.

Prosperity also has a real estate division and has recently entered into a number of conditional agreements designed to build up a portfolio of PRC property and development assets.

Pdf

Prosperity Minerals is "significantly undervalued", says Daniel Stewart

2nd Dec 2011, 1:24 pm by Giles Gwinnett Prosperity Minerals is 'significantly undervalued', says broker Daniel Stewart, which rates the stock a 'buy' and targets a price of 211 pence

Prosperity Minerals (LON:PMHL) is 'significantly undervalued', says broker Daniel Stewart, which rates the stock a 'buy' and targets a price of 211 pence (current price: 87 pence).

The firm, an iron ore trading business serving the People's Republic of China (PRC), is also a real estate owner and developer, and is invested in two cement manufacturers in the PRC.

In September this year, the group unveiled plans to sell its iron trading business for US$38.6 million to its controlling shareholder, Prosperity International Holdings so that it can focus on Chinese real estate.

Daniel Stewart analyst Simon Wills, in a wide- ranging note, said that the firm's share price had fallen sharply since the middle of the year.

This had been caused, he said, partly on fears of slowdown in China and a property bubble and more recently due to uncertainty created by the proposal to sell the firm's iron ore business.

"This has resulted in a situation where the stake in Anhui Chaodong Cement (ACC) now accounts for almost the whole of the group's market cap," said the analyst.

Wills said the Firm's ACC stake was now worth 70 pence, or 80 per cent of Prosperity's share price and the iron ore operations were valued by the broker at 7 pence per share.

Thus, he said: "The Real Estate business is in the price almost for free."

He added: "Our target price of 211p suggests the stock offers upside of 140 per cent. Even if Real Estate is valued on a 50 per cent discount to our estimate, the upside is 56 per cent."

The firm's current valuation looked "churlish to say the least" said the analyst, who added that he looked towards news of pre sales at commercial and residential development Orient Landmark to pull the positive trigger.

Last year, the firm bought  Bliss Hero for HK$836 million, which holds interests in an existing commercial building - SilverBay Plaza and a new commercial and residential development - Oriental Landmark - in Guangzhou City in Guangdong Province.

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