Elite KSB Holdings

EliteKSB is one of my "asset-play" investment.

It starting to contribute significantly with Mr Market value it to S$0.495 now

With SOTP valuation with the following three (3) parts. With margin of safety, the intrinsic value of EliteKSB is estimated as approx. S$0.60. More up-side is expected in due course.

- Cash Proceed after expense from disposal of assets
- The property at 2 Senoko Way
- The investment in China feed-mill biz

how did u derive that instrinc value?

(14-07-2012, 12:59 AM)pianist Wrote: how did u derive that instrinc value?

The valuation is simple and straight-forward, the only "tricky" part is the valuation of the China investment

- Cash ex-expense is 61 Mils for the diposal
- 2 Senoko Way property. If the property is sold together with disposal, the CMV is S$9.3 Mils. Although the property has higher valuation before disposal, but let's take the lowest i.e. S$9.3 Mils
- China investment. It bring in S$2.5 Mils in FY2011, Feed-mill market is a high-growth biz with double-digit growth in the past few years. It can easily value at PE of 15-20, but let's do it as PE 5 (since it is S-Chip ), the valuation is S$12.5 Mils

Total approx S$83 Mils. Mr Market valuation now is approx S$67 Mils @ S$0.495

The deterrence factor is on the risks involved, both real and perceived risks. I had done my assessment, and managed to convince myself to invest

I assume Mr market will price it to (or higher than ) intrinsic value when the deal is closing in due course

YMMV

The next milestone is the announcement of FY2012 report

Last year, it fall on 26 August. It is logical to assume this year will be around the same.

Expectations?

Both final and special dividends expected, and further capital distribution may also possible.

New update of the EliteKSB disposal.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

The property at 2 Senoko Way is confirmed as part of the disposal, with revised price from $9.3 Mils to $10.8 Mil

The revised net sale proceeds is approx $71.8 Mils. Approx $1.5 Mils more than original expected.

The management intends to distribute to Shareholders by way of a one-off special dividend at least 55% of the net proceeds of the Disposal excluding the Balance Purchase Price

It work out to be at least $34 Mils, or least 25 cts per share. IMO, the final dividend should be higher than that.

I was interested in this stock but the stock has low liquidity and I was unwilling to pay the selling price.

Penny wise pound foolish ...haha.

how much is the sales proceeds worth in per share basis?

(10-08-2012, 09:56 PM)yeokiwi Wrote: I was interested in this stock but the stock has low liquidity and I was unwilling to pay the selling price.

Penny wise pound foolish ...haha.

The stock remain in my watch list before the disposal announcement. After the announcement, i re-looked into it as an asset-play stock, and done a detail risk/reward analysis.

After the due diligence, the stock turned out to be a fantastic opportunity.

Even with the most conservative valuation, i have a close to 50% upside with the market price then. The down-side is less than -12%. Moreover the upside probability is much higher than down-side, which make it a good candidate for arbitration.

The risks involved are mostly perceived, and greatly reduced if you had done a detail analysis. I had taken an advantage on the "fear" of Mr Market.

I started to buy around @ $0.42, and further convinced by insider buying @ $0.44. I had accumulated a significant holding below the insider valuation.

(11-08-2012, 10:40 AM)CityFarmer Wrote: The stock remain in my watch list before the disposal announcement. After the announcement, i re-looked into it as an asset-play stock, and done a detail risk/reward analysis.

After the due diligence, the stock turned out to be a fantastic opportunity.

Even with the most conservative valuation, i have a close to 50% upside with the market price then. The down-side is less than -12%. Moreover the upside probability is much higher than down-side, which make it a good candidate for arbitration.

The risks involved are mostly perceived, and greatly reduced if you had done a detail analysis. I had taken an advantage on the "fear" of Mr Market.

I started to buy around @ $0.42, and further convinced by insider buying @ $0.44. I had accumulated a significant holding below the insider valuation.

how did u know insider buy at 0.44?
still fully vested at 0.32

(11-08-2012, 02:05 PM)pianist Wrote: how did u know insider buy at 0.44?
still fully vested at 0.32

Refer to post#19 of this thread for detail