China Merchants Holdings Pacific

[greengiraffe]

Er... where got cash? All paper leh... cash will only be generated from underlying assets that is exchanged in part with shares...

No worries lah... comrades will look after us... have to get through the overhang though...

(vested)

Actually, given the cash upfront for jiurui is not high due to issue of new shares, and the conversion when fully done, is another cash infusion.

Wouldn't it make some sense to pay down some
Of the debts??

(Vested)

Oops LOL pardon me.

I thought I saw some cash consideration when I read the announcement of acquisition. But like u say, it doesn't matter.

I was in the game late too.

me too only being convinced after the revival of Jiurui deal... but no worries lah... they are still fearlessly paying you an upwardly revised interim dividends of 3.5 cents not withstanding the continued conversion of CBs...

Since they are fearless... we must also be fearless...

GG

[Nick]

Actually, given the cash upfront for jiurui is not high due to issue of new shares, and the conversion when fully done, is another cash infusion.

Wouldn't it make some sense to pay down some
Of the debts??

(Vested)

I believe there is a fixed repayment schedule for most of the debt. I expect debt held by YTW and debt held in the Company level to finance the acquisition of YTW stake to be repaid by the end of 2015. The business model is quite sustainable.

As GG pointed out, there will be no cash infusion. IIRC, they have never raised any cash from OPMI since listing in 2004.

Been a long time shareholder. I actually attended the FY 2009 AGM - concerns then were very different from the ones now. Though most of my current stake came after YTW was acquired.

Remain vested.

[shuoyanz]

Quick glance on the following announcements by CM Pac will reveal the shrewed and patient deal making ability by the management team within a year:

Old deal: http://infopub.sgx.com/FileOpen/Acquisit...leID=57001

New deal: http://infopub.sgx.com/FileOpen/Acquisit...eID=306007

Old deal: consideration RMB 891m (adjusted for comparable concession life), net debt HK$1.94bn

New deal: RMB 697m, net debt HK$1.59bn

Difference - 21.8% cheaper in consideration, 18% less net debt absolute certainty in concession life. New shares issued as consideration @ $0.98 is 16.7% dearer than previously indicated price of $0.84 (ie less dilution should same amount of shares are issued)

DBS Vickers in the old analysis when the old deal was announced estimated a borrowing costs of 6.55% back then. Given that overall credit situation in China has deteriorated over the last 18 months, it is highly likely that borrowers with inferior credit ratings are likely to have paid higher interest rates in order to roll over their loans.

Simply assuming a tax rate of 20%, every 1% savings on the latest net debt of HK$1.59bn will lift Jiurui net earnings by HK$12.7m. Assuming a conservative 5% savings on interest simply due to CM Pac credit standing, Jiurui would easily enjoy a HK$63.6m uplift in net earnings.

In the short term at least until further details on the targeted company are revealed in the EGM circular, the market and analysts can only guess. In the meantime, the ongoing conversion of the in-the-money CB is likely to provide explanation of the seemingly "never-ending" supply of CMP shares (assuming there are actively traders arbitraging between the CB and the mother shares).

Vested
GG

Hello buddies

Based on the EGM circular page 49, Weighted Average Cost of Capital for the existing owners of Jiurui seems to be 11.5%, giving it a Fair Value of RMB 702 million.

Based on greengiraffe's information, Cost of Capital for CMPH is estimated at 6.5%, so I estimated the Fair Value to CMPH to be RMB 2750 million.

Given that CMPH paid RMB 698 million for Jiurui, it seems like a really good deal, or I failed my maths

This gives us a 5% savings on interest as greengiraffe has rightfully predicted, giving us "HK$63.6m uplift in net earnings".

Profit!

(vested)

[Nick]

http://research.uobkayhian.com/content_d...dc326bf31a - Report from UOB on Zhejiang Expressway.

Often a good source of information as both Beilun and YTW are located close or connected to the roads owned by ZE. Like us, they were affected by the opening of the Bridge.

(Vested)

[greengiraffe]

China extends green car support
JOHN conROY SEPTEMBER 02, 2014 11:15AM

China has announced a list of 17 electric vehicles from 11 automakers – including one model each from the China joint ventures of Nissan, GM and Daimler – that will be eligible for tax breaks for purchasers, Reuters reports.

According to the news service, the list was posted on the Ministry of Industry and Information Technology website, and follows an announcement last month last month that the government would stop levying sales tax on approved models of green cars from September.

"The tax breaks aim to spur purchases of those electric cars in China, whose sales have already been subsidised by official purchase rebates," Reuters said.

China last year renewed for three years subsidies that provide up to 60,000 yuan ($US9767) for the purchase of an all-electric battery car and up to 35,000 yuan for a "near all-electric" plug-in vehicle, the news service said, adding that the Beijing has a target of 5 million such vehicles by 2020.

[greengiraffe]

This time round worded differently... been reading VB?

Since 2nd April a total of 34.306m new shares has been issued representing an increase of 4.77% in paid up capital from 31 Dec 13.

Based on oustanding HK$983m CBs, the potential number of shares to be converted at the present conversion price $0.826 will be 187.854m

http://infopub.sgx.com/FileOpen/Cancella...eID=313561


The board of directors (the “Board”) of China Merchants Holdings (Pacific) Limited (the “Company”) wishes to announce that HK$12,000,000 in aggregate principal amount of HK$1,163,000,000 1.25 per cent. convertible bonds due 2017 (credit enhanced until 2015) (the “Convertible Bonds”) have been converted and cancelled pursuant to the exercise of conversion rights by the holder thereof (the “Conversion”). Accordingly, following such conversion and cancellation, the aggregate principal amount of the Convertible Bonds remaining outstanding as of 3 September 2014 is HK$983,000,000.
Arising from such conversion, 2,293,230 new ordinary shares in the capital of the Company (“Shares”) have been issued at the conversion price of S$0.826 and the total number of issued and paid-up Shares of the Company has increased to 755,810,367.

[greengiraffe]

As of 31 Dec 13, only Jiang Yan Fei has 1.2m options left for exercising...

http://infopub.sgx.com/FileOpen/Exercise...eID=313713

The Board of Directors of China Merchants Holdings (Pacific) Limited (the “Company”) wishes to announce the issue and allotment of an aggregate of 280,000 ordinary shares in the capital of the Company, at the exercise price of S$0.789 each, pursuant to the exercise of options granted under the Scheme.
The abovementioned new shares have been listed and quoted on the Singapore Exchange Securities Trading Limited on 4 September 2014.

[greengiraffe]

Since 2nd April a total of 35.644m new shares has been issued representing an increase of 4.96% in paid up capital from 31 Dec 13.

Based on oustanding HK$976m CBs, the potential number of shares to be converted at the present conversion price $0.826 will be 186.516m

http://infopub.sgx.com/FileOpen/Cancella...eID=314089


CONVERTIBLE BONDS DUE 2017 -
CANCELLATION OF BONDS DUE TO CONVERSION
The board of directors (the “Board”) of China Merchants Holdings (Pacific) Limited (the “Company”) wishes to announce that HK$7,000,000 in aggregate principal amount of HK$1,163,000,000 1.25 per cent. convertible bonds due 2017 (credit enhanced until 2015) (the “Convertible Bonds”) have been converted and cancelled pursuant to the exercise of conversion rights by the holder thereof (the “Conversion”). Accordingly, following such conversion and cancellation, the aggregate principal amount of the Convertible Bonds remaining outstanding as of 8 September 2014 is HK$976,000,000.
Arising from such conversion, 1,337,717 new ordinary shares in the capital of the Company (“Shares”) have been issued at the conversion price of S$0.826 and the total number of issued and paid-up Shares of the Company has increased to 757,428,084.

[greengiraffe]

CMP - Firmly On Track For Growth

CMP held its EGM to acquire Jiurui Expressway this morning.

The main message that emerged from the meeting is as follows:

i) CMP can always retain earnings for acquisition of toll road - will take 3 years to accumulate earnings to buy a new toll road.

ii) CMP prefers to grow and share dividends with shareholders so that it can issue new shares at higher prices (on assumption that mkt rewards CMP for its generous and growing dividend policies) alongside with debt to acquire toll roads.

I think based on ii) CMP felt that they can achieve their objectives quicker especially since it is no longer restricted by the constraints of share price trading below NAV.

Hence, CMP's rich dividend yield is expected to be sustained and grow forward.

Buy for the 7.5% current yield with 5% capital gains in hope for 5% dividend yield with 7.5% capital gains.

HU8TPPY

[CityFarmer]

The resolution to approve the acquisition of Hong Kong Honest Queen International Investment Limited i.e. Jiurui Expressway, is passed as expected, with 99.999% FOR votes.

http://infopub.sgx.com/FileOpen/Result_o...eID=314174