Net sales proceeds of S$220mln with S$0.28 DPS as special interim dividend.
Been a long wait through an unexpected catalyst!
My question is... have the fundamentals turnaround?
The operation has not leaped, but the balance sheet and return has.
Scratching my head...
Is the value of the sale shares $92.3m or $130.7m?
After divestment the NTA will increase from 27.53ct to 32.72ct per share (5.19ct gain).
But the divestment gain will be $88.9m or 17.2ct per share.
Net proceed of $219.6m is 42.6ct per share.
Strange NTA logic:
CSE-2013 + 42.6ct = 32.72ct
CSE-2013 = 32.72ct - 42.6ct = negative 9.88ct
Quote:The significant assumptions and bases of the proforma financial effects are as follows:
(a) the net proceeds from the Proposed Divestment is S$219.6 million after deducting the
Transaction Expenses;
(b) approximately S$75.1 million will be used to repay the Group’s bank borrowings;
© approximately S$144.5 million will be distributed to Shareholders by way of the
Interim Special Dividend;
10
(d) NTA per Share is derived based on 516,067,852 issued Shares as at 31 December
2012 and 30 June 2013; and
(e) diluted earnings per share (“EPS”) is the same as basic EPS as there are no dilutive
potential of ordinary shares.
so
CSE-2013 + 42.6ct - 28ct = 32.72ct
CSE-2013 = 32.72ct - 42.6ct + 28ct = 18.12ct
Quote:After divestment the NTA will increase from 27.53ct to 32.72ct per share (5.19ct gain).
But the divestment gain will be $88.9m or 17.2ct per share.
There is no linkage between gain on divestment and change in NTA. if change in NAV, then they should be the same. gain on divestment should be less than change in NTA, as certain intangibles turns into cash which is tangible. In this case, 32.72 - 27.53 + 28 = 33.19ct, which is greater than 17.2ct.
Thanks a lot! The NTA is after the dividend payment. Great. And a chunk of intangibles will be disposed.
I am thinking about the simplistic valuation after divestment. 5.5 eps X 8 = 44 cents.
44 + 28 = 72 cents. Currently, now at 96 cents, is it overvalued?
If we back calculate, (96-28)/5.5= 12.4 times
Is it overvalued?
Depends on whether you think the market has priced in the 28c. CSE is still not CD as of yet.
(14-11-2013, 05:57 PM)mrEngineer Wrote: [ -> ]I am thinking about the simplistic valuation after divestment. 5.5 eps X 8 = 44 cents.
44 + 28 = 72 cents. Currently, now at 96 cents, is it overvalued?
If we back calculate, (96-28)/5.5= 12.4 times
Is it overvalued?
Shouldn't the much stronger balance sheet after transaction be of some value in the calculation?
Do note that CSE will be paying down a big portion of their loans post IPO.
Mr. Engineer how did you get the 5.5 EPS? is it based on the 9 months so far? If so, maybe you could annualise it to get a rough gauge of next FY's earnings. For me, I feel next FY earnings are approx. 7.4 cents