China Merchants Holdings Pacific

[pianist]

Dun think so...I was forced to jog from guilin towards south direction then. Dunno what river is that

[CityFarmer]

Dual-listing in SEHK, is always on the management road-map. One of the key consideration, is the size. The smallest peer in SEHK, Shenzhen Exp, has total asset above 30 billion HK$.

The current total asset of the company, is approx 15 billion HK$. Even with the acquiring asset of 3-4 billion HK$ more, the total asset is still less than 20 billion HK$. Is this a good size to start the dual-listing? Hmm...

(vested, and will be happy to see the dual-list materialized)

[greengiraffe]

One has to work hard to infer the intentions of CMP's mgt which comprises largely of principally "civil servants" higher up at the HJ level.

"Face" issues are very important in Chinese culture. For parent co to take pains to articulate their intentions on their own website for a substantially owned subsidiary means a lot in the light of a portfolio of holdings spreading across many A and H toll road companies.

The rate of acquisitions has also "accelerated" somewhat. In the latest acquisitions, mgt took pains to scout and enlarge ownership of toll road within a particular locality - Guilin and HJ has also highlighted synergistic benefits to be reaped via the cluster of toll roads around Guilin based on its Chinese announcement.

My fund manager buddy has the following comments after reviewing my work:

" I do think CMP will want to list in HK. It is their natural home. I think they listed in Singapore at a time when HK was weak and the yield story sells better to Singapore investors. They would want to raise capital next tranche in HK.
The sector's pricing in HK is mixed. Jiangsu Expressway is at 2.0X book but Shenzhen Expressway is at 0.9X. China Merchants is at 1.2X. So the lift to CMP may not be that great unless there's a parent injection story which HK investors love as they assume SOE parents always inject to the benefit of minority shareholders.
Timing wise you could also look at Fortune REIT which was similarly less than a year."

In terms of capital raising CMP has been less specific. They could have easily removed all uncertainties by announcing a straight rights but obviously they could have alternatives up their sleeves.

Overall there are many ways to skin a cow. A dual listing for CMP's case is unlikely to be the end of the road. In fact if it is well executed, it can only enhance CMP's future acquisition ability.

GG

Dual-listing in SEHK, is always on the management road-map. One of the key consideration, is the size. The smallest peer in SEHK, Shenzhen Exp, has total asset above 30 billion HK$.

The current total asset of the company, is approx 15 billion HK$. Even with the acquiring asset of 3-4 billion HK$ more, the total asset is still less than 20 billion HK$. Is this a good size to start the dual-listing? Hmm...

(vested, and will be happy to see the dual-list materialized)

[CityFarmer]

I have no doubt on the feasibility of dual-list in SEHK to rise capital, as highlighted both by you and your fund manager friend. The question, is the timing right, based on asset size?

One has to work hard to infer the intentions of CMP's mgt which comprises largely of principally "civil servants" higher up at the HJ level.

"Face" issues are very important in Chinese culture. For parent co to take pains to articulate their intentions on their own website for a substantially owned subsidiary means a lot in the light of a portfolio of holdings spreading across many A and H toll road companies.

The rate of acquisitions has also "accelerated" somewhat. In the latest acquisitions, mgt took pains to scout and enlarge ownership of toll road within a particular locality - Guilin and HJ has also highlighted synergistic benefits to be reaped via the cluster of toll roads around Guilin based on its Chinese announcement.

My fund manager buddy has the following comments after reviewing my work:

" I do think CMP will want to list in HK. It is their natural home. I think they listed in Singapore at a time when HK was weak and the yield story sells better to Singapore investors. They would want to raise capital next tranche in HK.
The sector's pricing in HK is mixed. Jiangsu Expressway is at 2.0X book but Shenzhen Expressway is at 0.9X. China Merchants is at 1.2X. So the lift to CMP may not be that great unless there's a parent injection story which HK investors love as they assume SOE parents always inject to the benefit of minority shareholders.
Timing wise you could also look at Fortune REIT which was similarly less than a year."

In terms of capital raising CMP has been less specific. They could have easily removed all uncertainties by announcing a straight rights but obviously they could have alternatives up their sleeves.

Overall there are many ways to skin a cow. A dual listing for CMP's case is unlikely to be the end of the road. In fact if it is well executed, it can only enhance CMP's future acquisition ability.

GG

Dual-listing in SEHK, is always on the management road-map. One of the key consideration, is the size. The smallest peer in SEHK, Shenzhen Exp, has total asset above 30 billion HK$.

The current total asset of the company, is approx 15 billion HK$. Even with the acquiring asset of 3-4 billion HK$ more, the total asset is still less than 20 billion HK$. Is this a good size to start the dual-listing? Hmm...

(vested, and will be happy to see the dual-list materialized)

[greengiraffe]

They have more interests than us. They are the driver and we are the passenger. As long as they are good drivers, then we have no issue in getting to where we all wanted to go.

Cheers

I have no doubt on the feasibility of dual-list in SEHK to rise capital, as highlighted both by you and your fund manager friend. The question, is the timing right, based on asset size?

One has to work hard to infer the intentions of CMP's mgt which comprises largely of principally "civil servants" higher up at the HJ level.

"Face" issues are very important in Chinese culture. For parent co to take pains to articulate their intentions on their own website for a substantially owned subsidiary means a lot in the light of a portfolio of holdings spreading across many A and H toll road companies.

The rate of acquisitions has also "accelerated" somewhat. In the latest acquisitions, mgt took pains to scout and enlarge ownership of toll road within a particular locality - Guilin and HJ has also highlighted synergistic benefits to be reaped via the cluster of toll roads around Guilin based on its Chinese announcement.

My fund manager buddy has the following comments after reviewing my work:

" I do think CMP will want to list in HK. It is their natural home. I think they listed in Singapore at a time when HK was weak and the yield story sells better to Singapore investors. They would want to raise capital next tranche in HK.
The sector's pricing in HK is mixed. Jiangsu Expressway is at 2.0X book but Shenzhen Expressway is at 0.9X. China Merchants is at 1.2X. So the lift to CMP may not be that great unless there's a parent injection story which HK investors love as they assume SOE parents always inject to the benefit of minority shareholders.
Timing wise you could also look at Fortune REIT which was similarly less than a year."

In terms of capital raising CMP has been less specific. They could have easily removed all uncertainties by announcing a straight rights but obviously they could have alternatives up their sleeves.

Overall there are many ways to skin a cow. A dual listing for CMP's case is unlikely to be the end of the road. In fact if it is well executed, it can only enhance CMP's future acquisition ability.

GG

Dual-listing in SEHK, is always on the management road-map. One of the key consideration, is the size. The smallest peer in SEHK, Shenzhen Exp, has total asset above 30 billion HK$.

The current total asset of the company, is approx 15 billion HK$. Even with the acquiring asset of 3-4 billion HK$ more, the total asset is still less than 20 billion HK$. Is this a good size to start the dual-listing? Hmm...

(vested, and will be happy to see the dual-list materialized)

[mkmk]

Question: Wouldn't a dual listing kill the volumes here in SG?
HK Markets are higher volume/liquidity, hence if investors have a choice, wouldn't they choose to invest in the company's "home" market?

[greengiraffe]

This is a globalised mkt... in fact I will be more than happy that mgt delist from SGX and relist in HKSE. They are seasoned corporates - they should have no issue to arrange for a transfer to HKSE.

If going through some paperwork means that my investments add on extra 10 - 20%, I wouldn't mind going thru the trouble.

GG

Question: Wouldn't a dual listing kill the volumes here in SG?
HK Markets are higher volume/liquidity, hence if investors have a choice, wouldn't they choose to invest in the company's "home" market?

[sillyivan]

if the dual listing goes through, how would it benefit current shareholders ?

[LionFlyer]

if the dual listing goes through, how would it benefit current shareholders ?

In terms of market cap, they are ranked 7th in the world (http://www.sfc.hk/web/EN/files/SOM/Marke...cs/a01.pdf) and in terms of geography, they are closer to China. A listing there may mean better appreciation of the true value of CMPacific compared to SGX and consequently see a gap up in price.

vested.

[weijian]

if the dual listing goes through, how would it benefit current shareholders ?

In terms of market cap, they are ranked 7th in the world (http://www.sfc.hk/web/EN/files/SOM/Marke...cs/a01.pdf) and in terms of geography, they are closer to China. A listing there may mean better appreciation of the true value of CMPacific compared to SGX and consequently see a gap up in price.

vested.

A close in gap can easily trigger the start of a positive feedback cycle: Reduced yields make yield accretive acqusitions easier. Yield accretive acquisitions further increases the critical mass, which attracts more acquisitions and easier funding options to reinforce the feedback loop.