King Wan Corporation

[Contrarian]

> Is current price still cheap?

Yes it the IPO completes and they cash out the shares. Better deal than many new IPOs.

Some investors may not be comfortable with them investing into different business. Betting on this company is a bet on their investment acumen.

[lanoitar]

> Is current price still cheap?

Yes if the IPO completes and they cash out the shares.

Assuming so, as of Dec 2012:

Equity w/o Thai assocs = 81.78m - 21.64m = $60.14m
KTIS shares (@ IPO price) = 95% x $50.2m = $47.69m
Total Equity = $107.83m

Num shares = 349.177m
Equity per share after KTIS IPO & cash out = 30.88c

If we are optimistic, and assume King Wan exits KTIS @ 30% above IPO price:

KTIS shares (@ 1.3 IPO price) = 1.3 x 95% x 50.2m = $62m
Total Equity = $60.14 + $62 = $122.14m
Per share = 35c

I can't figure out the "cheapness" of buying @ the current 33.5c. What am I missing? Thx.

[cif5000]

> Is current price still cheap?

Yes if the IPO completes and they cash out the shares.

Assuming so, as of Dec 2012:

Equity w/o Thai assocs = 81.78m - 21.64m = $60.14m
KTIS shares (@ IPO price) = 95% x $50.2m = $47.69m
Total Equity = $107.83m

Num shares = 349.177m
Equity per share after KTIS IPO & cash out = 30.88c

If we are optimistic, and assume King Wan exits KTIS @ 30% above IPO price:

KTIS shares (@ 1.3 IPO price) = 1.3 x 95% x 50.2m = $62m
Total Equity = $60.14 + $62 = $122.14m
Per share = 35c

I can't figure out the "cheapness" of buying @ the current 33.5c. What am I missing? Thx.

Have you looked at the performance of the recent IPO? 30% might be on the pessimistic side.

http://www.set.or.th/set/ipo.do?language=en&country=US

[psolhawk]

Management is for the idea of giving sustained special dividends instead of a one_off special div. As such, the total dividends per yearmay likely amount to around 4 cents a year, given the strength of their core biz and order book. This makes the current price attractive to folks who like high div yield stocks.

[Contrarian]

Management is for the idea of giving sustained special dividends instead of a one_off special div. As such, the total dividends per year may likely amount to around 4 cents a year, given the strength of their core biz and order book. This makes the current price attractive to folks who like high div yield stocks.

If we are optimistic, and assume King Wan exits KTIS @ 30% above IPO price:

Woa, you are so optimistic. What if the IPO is flat? $50M is good enough for me to project.

the total dividends per year may likely amount to around 4 cents a year

Boss, care to share how you get 4 cts? If they sell KTIS, they get $50M cash.

1 year pay $5M, that is around 1.5cts dividend. Core business pay 1ct. The ship charter and property business also need loans...

[lanoitar]

Have you looked at the performance of the recent IPO? 30% might be on the pessimistic side.

Ah thx! I observe the following though:

1. The super IPO performers seem to be the tiny caps. KTIS is aiming for a 40b Baht mkt cap, which is a relatively big elephant on SET. It'll be more difficult to move it by the same magnitude, IMHO.

2. Khon Kaen Sugar & Khonburi Sugar are both listed on SET. Their valuations are not exorbitant, and will provide an anchor for KTIS.


As for the argument that King Wan will be a high dividend counter due to the "installment" payout from the KTIS listing, I think people are confused on a return of capital vs return on capital.

[l0nEr]

earnings are out.
http://info.sgx.com/webcoranncatth.nsf/V...A003A0531/$file/KWCFullYearResultsFY31March2013.pdf?openelement

Anybody disappointed that there isnt a 4cent dividend? But 1cent as 'predicted' by the DMG OSK analyst?

But kinda beat his expectations by quite a bit though... his full-year profit estimate was 6.2m, but it came in at 7.0m. Though margins probably fell a little flat, due to the plunge in profits from associates (start up cost of the vessel leasing associate).

They have a significant amount of Other Receivables, which should be loans to an associate. Any idea what that associate is???
thanks

[ngcheeki]

They have a significant amount of Other Receivables, which should be loans to an associate. Any idea what that associate is???
thanks

Based on the FY2013 statement, section 8 Financial review

"The above increase was partly offset by loans made to its associates for property development activities, and which are not expected to be repaid in the next 12 months."

If I'm not wrong, property development associate is Meadows Bight Development Pte Ltd which is King Wan owns 40% and TA Corp owns 60% after the exit of Far East Distillers. The loan is probably for the property development project in Dairy Farm which is a 50-50 joint venture with Hock Lian Seng. The development project is called skywoods and will be launched soon.

http://property-in-singapore.biz/new-hom...dairy-farm

[l0nEr]

Based on the FY2013 statement, section 8 Financial review

"The above increase was partly offset by loans made to its associates for property development activities, and which are not expected to be repaid in the next 12 months."

If I'm not wrong, property development associate is Meadows Bight Development Pte Ltd which is King Wan owns 40% and TA Corp owns 60% after the exit of Far East Distillers. The loan is probably for the property development project in Dairy Farm which is a 50-50 joint venture with Hock Lian Seng. The development project is called skywoods and will be launched soon.

http://property-in-singapore.biz/new-hom...dairy-farm

Oh thanks. Now the balance sheet looks a lot better if the money is used for property development.

[psolhawk]

Paiseh, I stand corrected. Should be 3cents instead of 4 for the "installment payout". In anycase, this final 1cent div is the usual one given and I bet many are looking forward to the listing of ktis in July and are willing to wait for the good news. Plus, further upside from the possible sale of cargo ship and TOP of property development in 5 years.