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Aug. 1, 2012 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE MKT: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in
the People's Republic of China ("PRC"), today announced MaxSoar Financial and Investments LLC ("MaxSoar") initiated independent coverage of Longwei with a fair stock value assessment of
$5.00 to $5.42 per share.
MaxSoar's independent investment analysis team reviewed the company's business operations, financial results, supply and demand for its products, major developments and transactions, industry, local economy, and national economy in great detail and concluded that for an established gasoline and diesel wholesaler and distributor in an oligopoly competitive status, Longwei's stock is currently undervalued from either an intrinsic valuation standpoint or a relative valuation standpoint.
For the intrinsic valuation using the discounted cash flow ("DCF") model, MaxSoar's analysts made what it believed to be conservative forecasts of future financial results for the Company's existing two facilities and for the new facility assets it is acquiring. In addition, the analysts used conservative values including a high market risk premium for the input parameters of the capital asset pricing model ("CAPM") and DCF models and added three extra risk premiums to the required rate of return derived from standard process to raise the required rate of return to a very high level of almost 20%. The fair value MaxSoar obtained through this rigorous DCF valuation model was
For the relative valuation, MaxSoar's analysts compared Longwei to Kinder Morgan Energy Partners LP (NYSE: KMP) and Enbridge Energy Partners LP (NYSE: EEP), two publicly traded oil and natural gas distributors, and took a discount on these two comparable companies' multiples to account for size and location differences. The analysts further compared Longwei to Fortune Oil PLC (London Stock Exchange: FTO) and
Chiwan Base (Shengzhen Stock Exchange: 200053), two small-cap oil service companies in the PRC, and Dialog Group Bhd (Malaysia Stock Exchange: DLG), a small-cap oil service company in
Malaysia. The analysts used the lowest valuation multiples among these three comparable companies to calculate Longwei's fair value. The fair value range MaxSoar obtained through its relative valuation model was
$5.00 to $5.42 per share.
Longwei recently published photos and videos of its assets and operations and a reconciliation of its U.S. SEC filings and its SAT/SAIC filings in the PRC to its website,
www.longweipetroleum.com. MaxSoar's analysts believe the Company stands out from its Chinese small-cap and mid-cap peers in terms of verifiability of business operations and reliability of reported financial results.
The research report can be accessed using this link:
http://www.maxsoar.com/researchreport201207_1.htmAbout MaxSoar Financial and Investments LLC:
MaxSoar is a professional financial services provider offering investment analysis, asset management, and personal or corporate financial analysis and planning. It has extensive experience in researching, analyzing, and managing a broad spectrum of financial assets including stocks, bonds, mutual funds, real estate properties, and private companies. MaxSoar's knowledge and connections are especially strong in mainland
Taiwan, and western U.S. and
Canada. Additional information on the firm and its analysts can be accessed at
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in
the People's Republic of China. The Company's oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City,
Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao,
Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in
Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in
Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
For further information on Longwei Petroleum Investment Holding Limited, please visit
http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting
Dave Gentry at