Sino Grandness

[Young Investor]

Spectcuvestor

Thank you. I was at the AGM too.
Sino CEO said he planned to redeem all convertible bonds because Sino now has the money to do so; but bondholders want to extend their bonds because they want to have stakes in listed Garden Fresh.

You have said that without the pressure from the CB, the IPO will happen "not so soon". 
There was mention by CEO on partial redemption. Is partial redemption being discussed between Sino and bondholders as a compromise, and the discussion is delaying IPO?

[specuvestor]

Can you elaborate why do you think the CB discussion is linked to the IPO? You thinking they purposely delay the IPO so that the CB will not be convertible? If that's the case shouldn't they at least file A1 to reduce the interest cost?

Actually "not so soon" is not my word... it is from the chairman and translated by the PR

[tiongkokgor]

Are business fundamentals of SG going to change without/with IPO, with/without CB redemption?

What are the chances of Garden Fresh defaulting on its CBs?

Nestle bought 60% of Hsu Fu Chi in 2011 at 25 times PE (S$4.35 per share) . HFC share price after the Lehman Bros crisis in 2008 was below S$0.40.

All 3 crises presented buying opportunities for SG shares, Newman9 report, CBs defaulting and IPO not happening. Those who buy now gets a better deal than those who bought after the Newman9 report was out and before 4QFY2014 results and FY2014 Annual Report are out.

The Thai investor in SG co-owns Quality Coffee with Nestle to produce Nescafe coffee powder in Thailand.

Maybe I am fantasizing......it may not be too difficult to ask distributors of Nescafe to distribute Garden Fresh products in Thailand, South East Asia and perhaps the rest of the world. If the sales are good, Nestle may take up a stake in SG eventually.

希望这不是个春秋大梦。

[Oldman9]

Hi All

Thank you all for your posts...and to specuvestor for the PMs.

Oldman thinks there won't be any IPO by July, too late obviously. Reckons that the application will be submitted by July instead, based on what CEO Huang said in the edge magazine and business times. I read somewhere he said the same thing during the video conference briefing. That has not changed.

The delay could be due to ongoing CB discussions on full/partial redemption or it could be because they are waiting for Euromonitor's data which should be officially out in weeks, then perhaps the professionals will have the final numbers for the filing. If the CBs are fully redeemed before the IPO, then the shareholders will certainly huat ah. Oldman does not mind waiting for additional 2 or more months.

Question: If the forms are filed and submitted in July, will they still incur any penalties since the 1st CB expires end June?

Oldman9

[leeeta]

Spectcuvestor

Thank you. I was at the AGM too.
Sino CEO said he planned to redeem all convertible bonds because Sino now has the money to do so; but bondholders want to extend their bonds because they want to have stakes in listed Garden Fresh.

You have said that without the pressure from the CB, the IPO will happen "not so soon". 
There was mention by CEO on partial redemption. Is partial redemption being discussed between Sino and bondholders as a compromise, and the discussion is delaying IPO?

For sure the bondholders will want to extend. They can see the value. In my opinion, I think its only right that they have some stake in GF. Without them Garden Fresh would not have grown 10x in 4 yrs. How much stake, depends on the negotiation.

[Oldman9]

Are business fundamentals of SG going to change without/with IPO, with/without CB redemption?

What are the chances of Garden Fresh defaulting on its CBs?

Nestle bought 60% of Hsu Fu Chi in 2011 at 25 times PE (S$4.35 per share) . HFC share price after the Lehman Bros crisis in 2008 was below S$0.40.

All 3 crises presented buying opportunities for SG shares, Newman9 report, CBs defaulting and IPO not happening. Those who buy now gets a better deal than those who bought after the Newman9 report was out and before 4QFY2014 results and FY2014 Annual Report are out.

The Thai investor in SG co-owns Quality Coffee with Nestle to produce Nescafe coffee powder in Thailand.

Maybe I am fantasizing......it may not be too difficult to ask distributors of Nescafe to distribute Garden Fresh products in Thailand, South East Asia and perhaps the rest of the world. If the sales are good, Nestle may take up a stake in SG eventually.

希望这不是个春秋大梦。

Hi TiongKokGor,

You making me salivate. If Nestle comes in and takes a stake at 25PE, I will change my nick to newman hahaha. Jokes aside, I really wish they come in though. By that time, will we see $3 dollars?

cheers
Oldman9

[Young Investor]

Can you elaborate why do you think the CB discussion is linked to the IPO? You thinking they purposely delay the IPO so that the CB will not be convertible? If that's the case shouldn't they at least file A1 to reduce the interest cost?

Actually "not so soon" is not my word... it is from the chairman and translated by the PR

Sino's intention to fully redeem the bonds is proof that Garden Fresh is a valuable brand. 
Garden Fresh last year profit was around RMB 340m. 12 times PE will be RMB 4,080m. Bondholders will rather have Garden Fresh shares to enjoy the upside than the RMB 650m redemption.  
In Business Times (23 Mar 15) article "Sino Grandness eyes Thailand juice market",  CEO was quoted as saying that the plan is to submit A1 form before July: 
"Meanwhile, in an update on its efforts to spin-off its beverage business segment under a subsidiary for an initial public offering, Mr Huang said that plans are progressing smoothly. In the past, it has pointed to the Hong Kong and Taiwanese Stock Exchanges as options, although some analysts have suggested that Hong Kong could be the likelier candidate. The group is aiming to complete and submit the necessary paperwork for the application to the stock exchange before July - ahead of the due date for a tranche of convertible bonds - it said, without revealing the stock exchange in question." 

[roxhockey]

Guys, in investing we always need to remember that management will always highlight the positives and downplay the negatives. Its important to 'trust, but verify' everything that the company tells you that's important to your investment thesis, looking for third party verification, especially for a counter that generates as much debate as SG...

[Happymeowmeow]

what happens if there's no IPO at all?

[leeeta]

what happens if there's no IPO at all?

Business still goes on albeit at a slower pace. Sino grandness can sell a stake of garden fresh to a strategic partner to grow the business or ipo later in another exchange.