FIRST BERLIN Equity Research February 9, 2004 Providential Holdings, Inc. Berlin Symbol: PRVH Symbol: PR7 /WKN: 935160 Primary Exchanges: OTCBB Initial Report Highlights ? We are commencing our coverage of Providential Holdings, Inc., a California based diversified holding company, with a Strong Buy recommendation and a 3 month price target of ?0.45. Our positive view of the company is based on our ongoing contact with CEO, Mr. Henry Fahman, who has impressed us with both his drive and entrepreneurial spirit. ? The company has made a number of acquisitions since June 2003 including ATC Technology Corporation and Irvine College of Medical Sciences. Both are expected to add substantially to Providential?s revenues in the next quarters. Providential also expects to complete at least two new acquisitions in the current quarter. All acquisitions would be financed through the issuance of Providential stock. ? In July of 2003, Providential started trading on the German stock exchange. The listing has helped increase the volume of shares that are traded which, given the company?s use of shares to acquire other companies, is an important part of the Providential?s strategy. In addition, the listing gives the company access to the German financial markets and also lowers the transaction costs for European investors. ? We are forecasting revenues of $6.7m for the six months ending Dec 31, 2003 and a net income of $2.3m which translates into an estimated EPS of $0.024 cents per share. This is substantial progress given that the company delivered revenues of $0.602m in FY 2003 with net losses of $1.66m. ? However the stock price has risen over the last year from a low of ?0.04 to a high of ?0.30 and we believe there are risks inherent in the stock including the company?s tenuous liquidity situation (working capital of -$0.044m) and the company?s need to dilute shareholding by issuing shares to pay consultants and other debts. Company profile Providential Holdings, Inc. is a diversified holding company, headquartered in Fountain Valley, California, USA. The company focuses on investing in and acquiring companies in the technology, financial services and international trade areas. In addition, the company provides expertise in the financial services and M&A fields 1/7 USA Rating:STRONG BUY 3 Month Price Target: ?0.45 Risk Rating:SPECULATIVE Financial History & Projections *FY ends June 30 2002A 2003E 2004E 0.602 1.448 57.979 Revenue ?m -8,7% 140.6% 3904.1% Yr/Yr Growth Operating Income ?m -1.240 Net Income ?m -1.002 Company projections Stock Data Market Capitalisation Shares Outstanding Cash and Cash Equivalents Working Capital Total Shareholder?s Equity Current Price: (closing 6.2.04) 52-Week Range: Free float -0.464 -0.493 19.938 17.164 ?27.440m 101.629m $0.062m -$0.044m -$0.444m ?0.27 ?0.04/0.30 68,3% Stock Overview Maria Hellmann mariahellmann@firstberlin.com First Berlin Equity Research Group Schumannstr. 17 10117 Berlin +49 (0)30 - 80 93 96 86 Fax +49 (0)30 - 80 93 96 87 February 9, 2004 FIRST BERLIN
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