Elite KSB Holdings

[CityFarmer]

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