China Digital Revieled

China Digital TV Holding Co., Ltd. (STV) is my spec play for 2008. Here is why:

• This is a recent IPO in the China market which has played out the initial hype (rise and fall)
• The company makes digital access cards (required to watch digital TV) and controls roughly 45% of the market in China.
• China is mandating that the entire country convert to digital TV by 2015...meaning lots of these will be sold in the next few years....especially with the Olympics coming next year.
  
• A great article was written back in October trying to forecast the forward growth of the company. It concludes that if the assumed growth rates hold as forecasted by the company then the stock price should be between $65 (conservative model) and $105 (agressive).
  
• The company then reported Q3 earnings in November...here is how they compared against the projections from the company in Oct...clearly great numbers:
• They also provided Q4 guidance of around $16M (again above the companies original projections).
  

Even if the stock only climbs to the conservative $65...from $28 that is nice 132% gain. It looks like the company is well positioned in a guaranteed growth market. As long as it can stay ahead of the competition...it should enjoy a nice ride for at least the next year or two. I am not betting the farm on this one since it is still a spec play at heart....but a little here could go a long way in this case.