New Toyo

[Underdogger]

Basis should be 5 to 6 times EBITDA, which works out to be 44 to 53 cents.

this is excluding the following considerations:-
A. 13 cents from SAH
B. 2 cents regular dividends
C. Rationalization of land holdings/investment properties

(A) to (C ) can probably add up to approx 20 cents.

So all in will probably give 60 to 70 cents.

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Current Net Profit of New Toyo's Core Ops = 19.8mil + 2.25mil - 8mil = $14mil or 3.2 cents EPS.
If assume P/E of 10 (since contractual agreement with BAT is 7 + 3 yrs will last until 2018, stable revenue) = 32 cents (not forward looking)

On top of this
a. investment arm - 10 cents (BV for Tien Wah + MV for New Toyo investment properties)
b. SAH sales proceeds - 13 cents

Approx = 55 cents

It would appear that the external auditors have no problem with New Toyo recognising its share of Shanghai Asia's profit, notwithstanding the impending asset sale.
By the way, Shanghai Asia contributed around $8m to the "Share of profit of associates"; the remaining $0.9 m came from the other two (or three) associated companies.
I have disregarded this $8 m in assessing the investment merits of New Toyo.

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