Market research - HOT:WSE

Kush Islands (HOT:WSE)
https://www.wselive.com/trade/order_entry/140

Net Tangible Asset: L$0.000
EPS: L$0.100
P/E Ratio: 30.82
Monthly Revenue: L$513902.90
Monthly Expenses: L$314032.26
Outstanding shares: 2000000
Freefloat: 40%

HOT:WSE is focused on managing estate sim’s that use the so called ownership system not to be confused with rental systems. In other words, HOT is managing the SIM and the resident owns their own land and can also resell it. Coupled to this is the Kush Bank which offers a wide range of financial services.

This business model proofed to be extremely successful. Since April 07 when HOT joined the WSE board it continued to develop and could maintain a high dividend history. Actually HOT is adding a fifth SIM to its portfolio and the others have an occupancy rate which is close to 100%.

The business model is well adapted to the volatile environment of SL and wasn’t really harmed by any of these side effects the SL economy was suffering during this summer (gambling ban, bank crisis, VAT).

Rockwell sees clearly further growth potential. Expansion is financed through the use of short term foreign capital. Credit lines were increased to finance the 5th SIM and dividend will be reduced in the coming months till this loan is reimbursed but will still be attractive. In fact this period is a challenge to accumulate shares in HOT for an interesting price.

If the 5th SIM is fulfilling as planned we estimate a dividend of > 0.2 $L /share and a share price of 4.0 $L.

A message from the CEO “Kush Islands is a great choice for your portfolio if you are looking to gain exposure to the consistent revenue streams available in the estate land market. I invite you to visit our sims (Kush, Kush II, Kush III, Kush City, and soon Kush Keys) anytime!”

Positive aspects:
• Excellent management
• “Simple” but clear and well adapted business model
• Consistency of business and dividend history
• Excellent communication towards share holders
• Freefloat of 40%
• Future outlook looks promising

Negative aspects:
• HOT has no assets
• Who can replace CEO?

LEM, CEO
House of derivatives (LFB, LWI, LHH, LPI as IPO)
Analyst, WSE