Share price
(25 Mar 2015)

16.4 cents

PE (ttm)

25.3

Market cap

S$1.59 billion

Price/book

1.93

Dividend yield

-

THE SHARE PRICE of SIIC Environment Holdings jumped 9.3% yesterday to 16.4 cents on news of its proposed acquisition of 100% of Global Envirotech Investment for RMB1.548 billion, which includes the repayment of a debt of RMB479,180,000.

The vendor is Global Environment Investment.

The target company owns all of Global Environment Investment (HK), which in turn owns 92.15% of Fudan Water Engineering and Technology Co. 

The target company and the HK company are investment holding companies.


Quote"The proposed acquisition is a strategic addition and complementary to the group's existing business and operational capabilities.

"In addition, the location of the target group has a strategic significance to the group as it would potentially serve as a platform for the group to secure more opportunities in the respective regions."

-- SIIC ENVIRONMENT  

Fudan Water, together with its subsidiaries, are engaged principally in the business of water treatment management and engineering, research and development, technology transfer, technology consultation and technology service in the water ecological restoration area; and development of water treatment materials and equipment.

Fudan Water operates about10 projects in Shanghai City, Jiangsu, Zhejiang and Guangdong provinces, with a planned water treatment capacity of over 1 million tons/day.

The vendor shall be paid in the following manner:

(a) RMB151,701,741 by cash as deposit; and
(b) the balance RMB917,118,259 by 1.56 billion new ordinary shares of SIIC Environment at an issue price of S$0.1320 per share.   

400_Zhou-Jun-w-investorsZhou Jun, executive chairman of SIIC, with analysts and investors. NextInsight file photo.The issue price represents a discount of 12.2% to the volume-weighted average price of SIIC shares traded on the SGX-ST on 24 March 2015, the full market day on which the sale and purchase agreement was signed.

The net profit attributable to the 92.15% equity interest in Fudan Water Group for 2014, based on PRC unaudited management accounts, amounted to RMB89.4 million.

Had the acquisition been effected on 1 January 2014, the earnings per share of SIIC would have risen from 2.90 RMB cents to 3.31 RMB cents.

That translates into a PE of about 23X based on the recent stock price of 16.4 cents.

For details see SIIC announcement here. 

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