Pacific Century Regional Developments

[dydx]

Today (12Oct11), in an EGM held in Hong Kong, the shareholders of associate PCCW Limited (listed on SEHK) gave a resounding vote for the proposed spin-off and separate listing of PCCW's telecommunications business.....
http://info.sgx.com/webcoranncatth.nsf/V...70038286C/$file/PCCW_pollresultsannouncement.pdf?openelement

A relevant question: Would this corporate restructuring benefit PCRD and its shareholders?

[dydx]

This morning's (21Nov11) announcement by PCCW says that PCRD, and 3 other companies (including Eisner Investments Ltd) controlled by Richard Li, have applied to take up their respective Assured Entitlements to Reserved Share Stapled Units in full at the maximum price of HK$5.38 per Reserved Share Stapled Unit, in the Preferential Offering of Share Stapled Units to be jointly issued by HKT Trust and HKT Ltd.....
http://info.sgx.com/webcoranncatth.nsf/V...E00822A8C/$file/PCCW_announcement_20111121.pdf?openelement

It is also mentioned in the announcement that Eisner Investments Ltd has also subscribed for 200,000,000 additional Reserved Share Stapled Units for by way of excess application.

[ngcheeki]

PCCW HKT Trust has successfully listed @ HK$4.53 a piece and its current share price is HK$4.97. Why is PCRD share price dropped from 16 cents around Nov to now 13 cents? Is it a good time to pick up this stock since PCRD shareholders will get a big cash payout with PCRD 21.86% stake in PCCW?

By the way, what would be the estimated cash payout if there is any?

[cyclone]

Pac Cent has run up a lot from recent low of 0.12. Based on latest price of 0.15, is it still undervalue ?

Based on Pac Cent's 3,096,269,100 shares and the price of 0.15, the capitalization is about 464.44 million SGD.
Pac Cent has about 21% of PCCW. Assume that the fair value of PCCW is 2.5 HKD a share. Based on PCCW's outstanding shares, that 21% worths 7 billions * 2.5 HKD * 0.21 = 3.675 billion HKD = 588 million SGD.
This is a 21% discount.

Pac Cent has also vested interest on the HKT Trust, a hotel in Vietnam. Those are all bonus.

Another question: Is PCCW a cigar butt ? I don't think so.

Vested on PCRD.

[dydx]

As something like a surprise move to me, yesterday (3Apr13) PCRD bought back a total of 1,185,000 shares from the open-market and paid between $0.19 and $0.20/share - giving an average purchase price of $0.1975/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
The shares bought comprised approx. 75% of the total volume transacted of 1,582 shares yesterday.

More action today?

[byfaith]

dydx

while we will not know the reasons for shares buyback by the company, are there exceptions that it may not be a good move ?
eg. STI already so high, etc ?

[dydx]

dydx

while we will not know the reasons for shares buyback by the company, are there exceptions that it may not be a good move ?
eg. STI already so high, etc ?

The main reasons/motivations for PCRD's management/BOD to have the company buying back its own shares should include:
(1) to enhance the value of the remaining shares;
(2) to return excess capital/cash to shareholders; and
(3) to give a signal to public shareholders and potential investors that in their opinion, the current share price at the $0.20 level does not reflect the true worth of the share.

Quite obviously, PCRD's stake in PCCW should be worth more than its corresponding book value or even market value. Would anyone in the forum who has done a valuation on PCRD's stake in PCCW be willing to share his findings?

[greengiraffe]

PCRD is a holding company - just cant remember how much of PCCW 0008.HK it holds:

http://www.pccw.com/staticfiles/PCCWCorp...FINAL_.pdf

PCCW results has been underpinned by HKT Trust:

http://www.bloomberg.com/quote/6823:HK

Basically, the structure reminds me of Berjaya Group since every layer is dependent on the ultimate cash cow HKT Trust.

PCRD was a darling during the pre-internet bubble era. They added the HK Cyberport angle on real estate:

http://www.pcpd.com/html/eng/about/corprofile.html

This is also listed but don't think PCRD has a direct interest except through PCCW.

Will try and dig further and see what is the angle.

GG

dydx

while we will not know the reasons for shares buyback by the company, are there exceptions that it may not be a good move ?
eg. STI already so high, etc ?

The main reasons/motivations for PCRD's management/BOD to have the company buying back its own shares should include:
(1) to enhance the value of the remaining shares;
(2) to return excess capital/cash to shareholders; and
(3) to give a signal to public shareholders and potential investors that in their opinion, the current share price at the $0.20 level does not reflect the true worth of the share.

Quite obviously, PCRD's stake in PCCW should be worth more than its corresponding book value or even market value. Would anyone in the forum who has done a valuation on PCRD's stake in PCCW be willing to share his findings?

---

http://info.sgx.com/webcoranncatth.nsf/V...1003EFED3/$file/PCRD_Announcement_2012Q4.pdf?openelement

I really don't think one should read too much into the recent spate of share buybacks -

It is insignificant relative to the huge share cap outstanding in excess of 3.0bn

Moreover, there is little cash and a large chunk of assets are PCCW and HKT Trust.

I think the only reason why they are doing buybacks - shares are trading below NTA of $0.235 so instead of declaring dividends, buying back shares could be the efficient way of signalling. Moreover, there could be tax implications of franking in the declaration of dividends which PCRD has not done for many years.

Odd Lot Investor
GG

[pianist]

strange, i saw over at hk side pccw in feb2013 declared a final dividend of 13.55 HK cents per ordinary share. as a holding company of pccw, why is it these dividend income are not passed on to singapore PCRD shareholders?

some history -
Initially, HKT owner Cable & Wireless entertained a bid from Singapore Telecom, chaired by Lee Hsien Yang, son of Singapore's former premier Lee Kuan Yew. But Central Government of the People's Republic of China was worried about Hong Kong's telecom system would fall into foreigner's hand. With the support of the loan from Hong Kong and Shanghai Banking Corporation and Bank of China (Hong Kong), PCCW, chaired by Richard Li, the younger son of tycoon Li Ka-shing, entered the scene and managed to outbid the Singaporean rival.[5] But this brought PCCW to take high debt and sell assets to return the debt. Finally, PCCW's stock price dropped more than 98% after the Internet bubble burst.[6]

[specuvestor]

IMHO PCRD is Richard's "precious". He is not going to share. Difficult part is to time his move