Sino Grandness

[alex]

Hi CY09,

Market dumbness (i like to call this)/inefficiencies exist in SGX. HKSE gives much higher valuation.

[portuser]

An assumption is that Garden Fresh will be valued at 4.9 Billion RMB or 1.04 Billion SGD in market cap.

This means Garden Fresh is bigger than our own Super Group/yeo hiap seng and revenue is similar to them. Remains to be seen if Mr. Market will ascribe such valuation to Garden Fresh as thought by netinsight.

Loquat juice is a new drink in early stage of product life cycle. 

Three-in-one coffee has been around for many years, and may have reached the stage of maturity, or even decline. 

Competition is another factor. Super have to fight for market share with international brands such as Nescafe, and numerous major regional brands such as Goldroast, Aik Cheong, Old Town White Coffee.

Garden Fresh has a dominant market share (86% based on Euromonitor's survey) in the loquat juice sector, and faces less pricing pressure.

[CityFarmer]

An assumption is that Garden Fresh will be valued at 4.9 Billion RMB or 1.04 Billion SGD in market cap.

This means Garden Fresh is bigger than our own Super Group/yeo hiap seng and revenue is similar to them. Remains to be seen if Mr. Market will ascribe such valuation to Garden Fresh as thought by netinsight.

Loquat juice is a new drink in early stage of product life cycle. 

Three-in-one coffee has been around for many years, and may have reached the stage of maturity, or even decline. 

Competition is another factor. Super have to fight for market share with international brands such as Nescafe, and numerous major regional brands such as Goldroast, Aik Cheong, Old Town White Coffee.

Garden Fresh has a dominant market share (86% based on Euromonitor's survey) in the loquat juice sector, and faces less pricing pressure.

Has portuser vested in the company?

Regards
CF

[portuser]

An assumption is that Garden Fresh will be valued at 4.9 Billion RMB or 1.04 Billion SGD in market cap.

This means Garden Fresh is bigger than our own Super Group/yeo hiap seng and revenue is similar to them. Remains to be seen if Mr. Market will ascribe such valuation to Garden Fresh as thought by netinsight.

Loquat juice is a new drink in early stage of product life cycle. 

Three-in-one coffee has been around for many years, and may have reached the stage of maturity, or even decline. 

Competition is another factor. Super have to fight for market share with international brands such as Nescafe, and numerous major regional brands such as Goldroast, Aik Cheong, Old Town White Coffee.

Garden Fresh has a dominant market share (86% based on Euromonitor's survey) in the loquat juice sector, and faces less pricing pressure.

Has portuser vested in the company?

Regards
CF

Yes. Just wonder why you are asking. Thank you.

[CityFarmer]

Has portuser vested in the company?

Regards
CF

Yes. Just wonder why you are asking. Thank you.

Thank you. I put different weight on view, based on various factors, including the vested interest. I assume Boon is not vested.

(not vested, and listening)

Regards
CF

[weijian]

Hi Mr Boon

Research, research and research before asking aloud:

"In 2009: IPO share price = SGD 29 cents
Today 2016: share price = SGD 34 cents  

Low or no dividend should be compensated by high appreciation in share price, but this doesn’t seem to be the case.

WHY?"

It is common practice to check whether there were changes in share capital before comparing share prices.

Crubs seems to know his stuff and we should study his comments more thoroughly before shooting off.

I don't see anything wrong with this. The last thing on the mind of a fundamental investor is the share price, or its history or the changes in share capital. The knowledge of these and their changes only serve to add in biases (eg. halo effect, confirmation bias) in the analysis. IMHO, Portuser and Boon's analysis in this thread, has been the standout thus far.

P.S. This shall be my first and last post on this matter.

[Boon]

Sino Grandness announced on 1 July 2013 that it had obtained a no-objection letter from SGX for the Proposed Spin-off of Garden Fresh subject to, inter alia, the following conditions:-
(a) Sino shareholders’ approval being obtained for the Proposed Spin-Off; and
(b) the remaining business of the Company and its group companies outside the Proposed Spin-off group must satisfy the admission criteria for listing on the SGX Mainboard.

It can be inferred that the IPO professionals have already finalised their work, and the EGM on 23 Feb 16 is to seek shareholders' approval for filing the listing application.

The circular on this matter is impending. 

Hi portuser,

The EGM notice dated 05 Feb 2016 (released 04 Feb 2016) referred to the Circular dated 05 Feb 2016 issued.
 
By the sounds of it, I am expecting the Circular to be issued today.
 
That’s my interpretation.

[CityFarmer]

Sino Grandness announced on 1 July 2013 that it had obtained a no-objection letter from SGX for the Proposed Spin-off of Garden Fresh subject to, inter alia, the following conditions:-
(a) Sino shareholders’ approval being obtained for the Proposed Spin-Off; and
(b) the remaining business of the Company and its group companies outside the Proposed Spin-off group must satisfy the admission criteria for listing on the SGX Mainboard.

It can be inferred that the IPO professionals have already finalised their work, and the EGM on 23 Feb 16 is to seek shareholders' approval for filing the listing application.

The circular on this matter is impending. 

Hi portuser,

The EGM notice dated 05 Feb 2016 (released 04 Feb 2016) referred to the Circular dated 05 Feb 2016 issued.
 
By the sounds of it, I am expecting the Circular to be issued today.
 
That’s my interpretation.

Assuming it is not typo, it should be the case. Boon, you are sharp, I missed it.

Probably the real "news" is pending. I am looking forward for it.

Regards
CF

(not vested)

[leeeta]

Sino Grandness announced on 1 July 2013 that it had obtained a no-objection letter from SGX for the Proposed Spin-off of Garden Fresh subject to, inter alia, the following conditions:-
(a) Sino shareholders’ approval being obtained for the Proposed Spin-Off; and
(b) the remaining business of the Company and its group companies outside the Proposed Spin-off group must satisfy the admission criteria for listing on the SGX Mainboard.

It can be inferred that the IPO professionals have already finalised their work, and the EGM on 23 Feb 16 is to seek shareholders' approval for filing the listing application.

The circular on this matter is impending. 

Hi portuser,

The EGM notice dated 05 Feb 2016 (released 04 Feb 2016) referred to the Circular dated 05 Feb 2016 issued.
 
By the sounds of it, I am expecting the Circular to be issued today.
 
That’s my interpretation.

Assuming it is not typo, it should be the case. Boon, you are sharp, I missed it.

Probably the real "news" is pending. I am looking forward for it.

Regards
CF

(not vested)

here it is.
http://infopub.sgx.com/Apps?A=COW_Prospe...te&F=26310

[Boon]

Page 13 of the Circular:

2.7 SHAREHOLDINGS OF THE LISTCO GROUP PRIOR TO PROPOSED LISTING

On 22 July 2015, the Company announced that it is in discussion with CB1 Holders holding RMB80,500,000 in principal amount, and the CB2 Holders holding RMB270,000,000 in principal amount, in relation to a potential extension of the maturity date of the 2011 Bonds and the 2012 Bonds on 25 July 2015. The extension is subject to certain conditions, details of which are being discussed between the Company and the bondholders.
As at the Latest Practicable Date, the Company is working with the CB1 Holders and the CB2 Holders to discuss and finalise the details of the conditions and the preparation of the requisite legal documents in relation to the extension of the maturity date of the 2011 Bonds and the 2012 Bonds as well as a possible restructuring of the 2011 Bonds and the 2012 Bonds in relation to the Proposed Listing, whereby the 2011 Bonds and 2012 Bonds is envisaged to be restructured into exchangeable bonds or other similar instruments, such that when converted or exchanged, the shares so converted or exchanged will be issued by the ListCo instead of Garden Fresh (HK), the issuer of the 2011 Bonds and the 2012 Bonds. There are also ongoing discussions with third parties for the issue of similar exchange bonds or other instrument to complement or replace CB1 and CB2.
The Company does not expect the conversion ratio of the 2011 Bonds and the 2012 Bonds to be materially different as a result of the Reorganisation or the restructuring of the 2011 Bonds and the 2012 Bonds in relation to the Proposed Listing. Details of the conversion formula for the 2011 Bonds are set out in the Company’s announcement dated 28 September 2011; and details of the conversion formula for the 2012 Bonds are set out in the Company’s Circular to Shareholders dated 4 July 2012.
The Company will keep shareholders updated on material developments relating to the 2011 Bonds and the 2012 Bonds as and when appropriate, and if other exchangeable bonds are issued.
As of the Latest Practicable Date, the outstanding principal amount to be repaid under the 2011 Bonds and the 2012 Bonds is RMB80,500,000 and RMB270,000,000 respectively.
It is envisaged that the CB1 Holders and the CB2 Holders will likely convert part or all of their respective 2011 Bonds and 2012 Bonds to new ListCo shares prior to the Proposed Listing of the ListCo Group. Any that are not converted will be redeemed. Assuming full conversion prior to the Proposed Listing and on the basis of an agreed valuation of RMB1,500,000,000, the Company will hold 76.6% in the Listco and CB1 Holders and CB2 Holders will collectively hold approximately 23.4% in the Listco. Prior to the Proposed Listing, the shareholding of the Company in the ListCo will be higher if only part of the 2011 Bonds and 2012 Bonds is converted, or if the agreed valuation is higher; and conversely, the shareholding of the Company in the Listco will be lower if in addition to the 2011 Bonds and 2012 Bonds the Company issues other exchangeable bonds that are converted, or if the agreed valuation for the 2011 Bonds and 2012 Bonds are lower.
 
Page 8:
Shareholders should note that the Proposed Listing are subject to, inter alia, the approval of an internationally recognized stock exchange (including but not limited to the HKSE) for the ListCo’s listing application, the final decision of the Board as well as the market conditions prevailing at the time immediately before the Proposed Listing. Depending on market conditions then prevailing, the Directors and the directors of the ListCo may decide not to proceed with the Proposed Listing. As the Proposed Listing, the Proposed Material Dilution and, where applicable, the Proposed Disposal may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.
 
Page 8:
Nevertheless, it is the Company’s intention for the ListCo to remain as its subsidiary, and accordingly, the Company intends for its shareholding interest in the ListCo to be maintained at not less than 51% immediately after the Proposed Listing. In this regard, it is currently expected that the aggregate percentage of reduction in the Company’s shareholding interest in the ListCo as a result of the full conversion of the 2011 Bonds and the 2012 Bonds, the Proposed Material Dilution and where applicable, the Proposed Disposal, will not exceed 49%.
 
page 16:
It should be noted that the extent of percentage reduction of the Company’s shareholding interest in the ListCo has not been determined as at the Latest Practicable Date. It is possible that the actual percentage reduction of the Company’s shareholding interest in the ListCo immediately following the completion of the Proposed Listing may not constitute a material dilution within the meaning of Rule 805(2)(b) and/or a major transaction within the meaning of Part VII of Chapter 10 of the Listing Manual. However, to remove any uncertainty and to give the Company and the ListCo maximum flexibility to decide on the Offer Price and offer size, the Company is seeking Shareholders’ approval to the Proposed Material Dilution and the Proposed Disposal.
The Company does not intend to, and will not to sell any existing ListCo Shares at the Proposed Listing if the Offer Price is less than the NAV per ListCo Share as at the date of the Proposed Listing.
 
Page 19:
The Company wishes to highlight that there can be no assurance that the approval for the Proposed Listing will be granted by an internationally recognized stock exchange (including but not limited to the HKSE). In the event that the approval for the Proposed Listing is not granted by an internationally recognized stock exchange (including but not limited to the HKSE), the Company will not be able to proceed with the Proposed Listing.
 
Page 20:
At the Latest Practicable Date, the final offer structure of the Proposed Listing and the final Offer Price has not been finalised. In this regard, the final Offer Price may be higher than or the same as the NAV per ListCo Share and accordingly, the proforma financial effects of the Proposed Listing as set out herein may vary. The Offer Price will be determined by the Directors and/or the directors of the ListCo, in due course, in consultation with the Company’s advisers for the Proposed Listing, closer to the date of the Proposed Listing through a book-building process, after taking into consideration, inter alia, the then prevailing market conditions and the estimated market demand for the Offer Shares. The Company does not intend to, and will not to sell any existing ListCo Shares at the Proposed Listing if the Offer Price is less than the NAV per ListCo Share as at the date of the Proposed Listing.
 
Page 21:
In the event that the Offer Price is higher than the NAV of the ListCo Group as at the date of the Proposed Listing, the Company will record a gain equivalent to the difference between the Offer Price and the NAV per ListCo Share as at the date of the Proposed Listing respectively, and the NAV of the Group will respectively increase by the amount equivalent to such gain. The actual gain from the Proposed Listing for the Group will be determined based on the final Offer Price and the book value of the ListCo Group as at the date of the Proposed Listing.
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A 76.6% stake in ListCo valued at  RMB 1,500,000,000 translates into SGD 0.37 per SG share (using 673,344,828 shares ; SGD = 4.65 RMB).

The management would not sell ListCo shares for less than NAV per share.

How high could the valuation of ListCo be? It depends on Mr. Market.

In the renegotiation of CB1/CB2, who is in a better bargaining position – bond issuer or bondholders?

Without the CB issues being fully finalized and settled – would  shareholders be in a position to make the correct voting decisions ?
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