Elite KSB Holdings

After disposal update last Friday, Mr Market increase the valuation of the company by approx 5% to $0.515

The updated NAV after disposal is 59.99 cents. Since almost entire NAV is cash, rationally Mr Market should value it close to the NAV. The only feasible reason is the "fear" that the deal might not be completed.

With the deal progressing to its completion, Mr Market should price it close or even higher than its NAV.

(13-08-2012, 03:59 PM)CityFarmer Wrote: With the deal progressing to its completion, Mr Market should price it close or even higher than its NAV.

How much discount or premium do you think Mr Market should fairly give?

(27-08-2012, 11:07 AM)cif5000 Wrote:

(13-08-2012, 03:59 PM)CityFarmer Wrote: With the deal progressing to its completion, Mr Market should price it close or even higher than its NAV.

How much discount or premium do you think Mr Market should fairly give?

It depend on Mr Market valuation on the remaining China feedmill biz.

The feed-mill biz has book value of 6.8 mils, with earning of 2.5 mils (FY2011). The feed-mill is a good biz to venture, with ROA of 19% and ROE of 36% as in FY2011.

IMO, If total sale proceeds are distributed, Mr Market should value feed-mill biz at least PE 5x, which is 12.5 mils and PB of 1.8, i.e. at least 4 cts premium over the group NAV

If part of the proceeds are distributed, and the rest invested into the feed-mill biz, then Mr Market should value it with a higher premium over the NAV, but in longer term.

I prefer the latter and it is likely so

YMMV

is it a gd idea to invest in feed-mill in prc in the first place?

(27-08-2012, 09:28 PM)pianist Wrote: is it a gd idea to invest in feed-mill in prc in the first place?

why not?

If you look into the company FY2011 report, the feed mill revenue is growing at rate of 30%-40% for the last 3 years (2009-2011) which include the year 2009

Elite KSB announced their full year report, pending for the final settlement of the disposal.

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

Few points to note are

- The book value of the China investment increases from $6.8 Mils to $10.5 Mils
- The earning of the China investment increase from $2.5 Mils to $2.9 Mils, an increase of 16%

Pending with the special dividend after the disposal, the company had declared 1.5 cts final dividend

I am expecting at least 25 cts special dividend from the disposal, so total 26.5 cts including the final dividend.

(28-08-2012, 06:40 PM)CityFarmer Wrote: - The book value of the China investment increases from $6.8 Mils to $10.5 Mils

...as no dividend was declared from these associates.

(28-08-2012, 06:40 PM)CityFarmer Wrote: - The earning of the China investment increase from $2.5 Mils to $2.9 Mils, an increase of 16%

The management has already presented the increase as 13% in the third column. Wonder why you want to view it as 16%?

(29-08-2012, 09:24 AM)cif5000 Wrote:

(28-08-2012, 06:40 PM)CityFarmer Wrote: - The book value of the China investment increases from $6.8 Mils to $10.5 Mils

...as no dividend was declared from these associates.

If the more 50% increase in book value is due to their organic growth in 1 year (with no distribution as dividend), then i am more than happy to hear that. But i really doubt so, let wait till the full AR, then we may able to know more detail.

(29-08-2012, 09:24 AM)cif5000 Wrote:

(28-08-2012, 06:40 PM)CityFarmer Wrote: - The earning of the China investment increase from $2.5 Mils to $2.9 Mils, an increase of 16%

The management has already presented the increase as 13% in the third column. Wonder why you want to view it as 16%?

It is due to rounding up, and i did my own calculation base on rounded number. Yes, i make a mistake, i should just refer to the numbers from FR
It is 13% (2.873/2.542) instead of 16% (2.9/2.5)

now that all its subsi / associates are to be divested..what remains in the company seems like an empty shell..except for the small prc outlet...this doesn't sound gd to me

this guy seems to play the same 'show-hand' gambling game as san teh's boss.

(01-09-2012, 04:05 PM)pianist Wrote: now that all its subsi / associates are to be divested..what remains in the company seems like an empty shell..except for the small prc outlet...this doesn't sound gd to me

this guy seems to play the same 'show-hand' gambling game as san teh's boss.

It is nothing wrong even if the whole company is sold, the same as privatization. The real catch is a good price. I am pretty sure the disposal is with a good price by any measures.

I am sure you have not look into the detail of the "small prc outlet". The "small prc outlet" is growing with double digit growth rate. It might soon become a main biz segment of the company.