CEU RedChip Target Price: $17.00
RedChip Visibility maintains its “Strong Buy” rating and price target of $17 on China Education Alliance. Based on our preliminary pro-forma adjustments, we think any new shares coming to market will be approximately 3.4 million shares, assuming the underwriter exercises its over-allotment. Only adjusting for the new shares and not factoring in any new uses for the $16 million and $18 million in new funds, we think dilution could be in the vicinity of 10% to 13% for 2010, with little impact to 2009.
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