World Precision Machinery

Dongdaemun
Topic Author
Offline
Platinum Member

15 years 8 months ago #149 by Dongdaemun

Replied by Dongdaemun on topic Re:Bright World (43 cts) at below 70-ct takeover price

ok, net profit for first half shot up 50%, which means Bright World shld be able to meet profit condition for takeover. Does that mean that the stock should soar on Monday to the 70-cent takeover price, instead of being at 45 cent level?

Please Log in or Create an account to join the conversation.

MacGyver
Offline
Banned

15 years 8 months ago #188 by MacGyver

Replied by MacGyver on topic Re:Bright World (43 cts) at below 70-ct takeover price

I actually feel that the current market price is fair reflecting the long wait that a shareholder has to endure before getting the GO money back. Personally, I feel that the profitability is not the issue. If the management really wants the deal to go through, there are many ways to achieve the profit guarantee, ie forgoing their profit-sharing bonus etc.... What I feel, the market is discounting, is the uncertainty between now till Feb when the Company announced its full year results. As we get closer to Feb, I believe the gap will narrow, provided that there\'s no drastic announcement from the Company. :unsure:

Please Log in or Create an account to join the conversation.

Dongdaemun
Topic Author
Offline
Platinum Member

15 years 8 months ago #201 by Dongdaemun

Replied by Dongdaemun on topic Re:Bright World (43 cts) at below 70-ct takeover price

interesting point from MacGyver abt profitability not being the issue. most of the other postings in this thread had been premised on profitability being the issue. but MacGyver\'s point about the long wait for the takeover - this seems hard to reconcile cos the gap between 45 cent and 70 cent is massive. it\'s 78% upside potential. Put another way, a 78% gain is very attractive for waiting for about 6 months. Annualised, that\'s 156%! Assuming that is the reason for the heavy market discount, then Bright World looks like a great bargain now, doesnt it?

Please Log in or Create an account to join the conversation.

MacGyver
Offline
Banned

15 years 8 months ago #206 by MacGyver

Replied by MacGyver on topic Re:Bright World (43 cts) at below 70-ct takeover price

Like I said, on paper it really does. But anything can happen in the corporate world. As in the Jade saga, the buyer can pull out all of a sudden. OR the Company could experience drastic slowdown in sales which reduce the profitability. The returns should not be annualised. The discount will narrow drastically towards the announcement of their FY2008 results in February 2009. Wow.... that sounds like a long time already.

Please Log in or Create an account to join the conversation.

Dongdaemun
Topic Author
Offline
Platinum Member

15 years 8 months ago #215 by Dongdaemun

Replied by Dongdaemun on topic Re:Bright World (43 cts) at below 70-ct takeover price

11 aug dbs vickers report: 2Q08 results exceeded expectation. Net profit grew 53% y-o-y to RMB46.6m on 41% higher sales and lower distribution cost. The cost savings mitigated higher iron and steel prices. As a result, net margin improved 1.7ppt y-o-y despite a 2.2ppt dip in gross margin. Point: 1H08 makes up almost 68% of our full year forecast, which is way above normal 1H: 2H earnings split of 40: 60. Hence, we raised our full year FY08 net earnings estimate by 16% to RMB135m. BWPMÃ¢â¬â¢s share price has fallen more than 30% from a high of S$0.665 when it announced the takeover offer from US investment fund China Holdings Acquisition Corp (Ã¢â¬ÅCHACÃ¢â¬Â). In our view, the wide gap between the current and offer price of S$0.70 could be due to the lengthy completion timeline (9-12 months) and uncertainties over the preconditions, which include: (i) approval by the majority of CHAC IPO shareholders; (ii) not more than 33.3% of CHAC\'s public shareholders redeeming their shares for cash; (iii) clearance by the related authorities; (iv) BWPM\'s net profit for 6, 9 and 12-months ending Jun, Sep and Dec 2008 must not drop by >10% y-o-y.

Please Log in or Create an account to join the conversation.

MacGyver
Offline
Banned

15 years 8 months ago #245 by MacGyver

Replied by MacGyver on topic Re:Bright World (43 cts) at below 70-ct takeover price

Just had lunch with a veteran from the industry today. I was told that \"the gem is not in the listco but something else held by the Chairman. Hence, no point studying the financial results.\" If that\'s the case, it certainly clears up a lot of questions about this M&A. :ohmy: :ohmy:

Please Log in or Create an account to join the conversation.

Time to create page: 0.203 seconds