Transpac Industrial Holding

[ichew]

From Hsu Fu Chi thread

the pple who sold to baring asia are TIH (transpac industrial holdings)
i am very very vested in TIH
holding time-frame = 6mths until TIH's FY results
i believe TIH is still under-valued at this price $1.45.
caveat emptor .. my own views ..

once i find time, i will do a write up on why i am so heavily vested in TIH
then we can mebbe see if i had gone wrong in my analysis somewhere

i realise i can nv find the time but for u guys, i feel i shld make time

i am now awaiting their 3Q09 results before updating below numbers.
there r a few changes becos of the warrants being converted

from 2Q09

num of sh = 117,333,338
cash = 54.730m (or $0.466 / sh)
debt = 0
sale of HFC = $55.68m (direct)
sale of HFC = $42.84m (indirect via interest in a 1996 Fund; but may be used to offset other losses in this fund)
=> total sale of HFC = 98.52m

total cash = 153.25m
=> cash per sh = $1.306

assume 50% of indirect stake in 1996 fund is returned to TIH, cash = 131.83m or $1.123 cash per sh

assume return 50% of cash ie declaring dividend $0.50
last done = $1.50 => yield = 33.3%

why buy?
- backed by cash of $1 to $1.306
- history of returning cash after sale of investments
- recent insider actions make me believe there shld be a good div coming
- their other top 2 investments r Foodstar Holdings and Fortune Code
both have fair value of abt $100m as at 31-dec-08 which i believe is close to the bottom of their valuation.
- Still researching Foodstar Holdings. Found http://www.foodstar.cn
- Fortune Code is invested in OUE. (after reading OUE AR, i found the whole gang that owns TIH r part owners of OUE too with Lippo. )

please let me know if u dont agree

[iam802]

Congrats!

Seems like money in the pocket for you already.


http://info.sgx.com/webcoranncatth.nsf/ ... penelement

[ichew]

sorry think i post this too late
i did not expect their 3Q results to be out this week... i tot will be out next week
anyway i am sure there will be others

btw can someone help update this to Transpac Industrial Holdings
Nothing international abt them

[ichew]

as at 11-nov-09

num of sh = 127,465,358 becos 438,000 warrants converted
=> cash = 191.039m + 438k = 191.477m
=> $1.502 cash per sh

=======================

from 3Q09 (as at 30-Sep-09)

NAV = $2.47

num of sh = 127,027,358
cash = 122.444m
+ 42.77m (proceeds from 1996 fund. rcv 08-oct. see pg 12 & 13 Note 3)
+ 25.825m (UBS AG ex call options. rcv 16-oct. announce 21-oct. see pg 12 & 13 Note 4)
=> cash = 191.039m (or $1.5039 cash per sh)
debt = 0

[winston]

Not vested. From DMG:-

Transpac Industrial Holdings: Harvesting Season (BUY/S$1.95/S$2.28)
Goh Han Peng (6232 3897, [email protected])
Terence Wong, CFA (6232 3896, [email protected])

Transpac Industrial Holdings (TIH) was one of the earliest investment companies to be listed on the SGX. We see potential for value to be unlocked as the group accelerates the divestment of legacy investments.

Recently, the group sold an 8% stake in SGX-listed Hsu Fu Chi (HFC) with a handsome return of 10x against its initial cost. With its coffers substantially replenished, the group paid an interim dividend of S$0.40/share. Given the group’s cash-rich position, we believe more distributions could result upon further asset sales.

Despite the stock’s strong run-up of 30% over the past month, we see further upside ahead with a $2.28 target price. Buy.

Harvesting the portfolio. TIH divested its 8% stake in HFC to Barings Private Equity (Asia) in September 2009 at $1.55 apiece, reaping sales proceeds of S$98m. HFC ranks as one of the most successful investments for the group with a return of 10x over initial cost.

Given conducive market conditions, the group remains in a prime position to exit its remaining investments at attractive valuations and unlock the embedded surpluses of its investments. Management’s track record suggests that more cash distributions are likely upon further asset sale.

Embarking on a new cycle of re-investment. On our estimates, the group will have a substantial war-chest over $120m (S$0.68/share) after paying out the recent interim dividend. This will provide the seed capital to begin a new cycle of re-nvestments, and in turn, further capital appreciation.

24% upside. We use a sum-or-parts methodology to value the stock, using market multiples to better reflect the value of its key investments. Our $2.28 target price is derived by applying a 20% holding company discount. Share price catalyst includes newsflow on asset divestments.

[ichew]

from 3Q09 (as at 30-Sep-09)

NAV = $2.47
num of sh = 127,027,358
cash = 122.444m
+ 42.77m (proceeds from 1996 fund. rcv 08-oct. see pg 12 & 13 Note 3)
+ 25.825m (UBS AG ex call options. rcv 16-oct. announce 21-oct. see pg 12 & 13 Note 4)
=> cash = 191.039m (or $1.5039 cash per sh)
debt = 0

from 26 January 2010 announcement
num of sh = 173,114,735
num of series A warrants o/s = 1,190,581
num of series B warrants o/s = 1,694,690

warrants converted = 46,087,377
=> cash from warrants = $46,087,377

paid out $0.40 to shdrs => div paid abt $69.25m

so cash = 191.039m + 46.087m - 69.25m = 167.876m (or abt $0.96 cash per sh)

lastdone = $1.42

R the other investments of TIH worth at least $0.47?

below from AR08; as at 31-dec-08

cost px of top 3 investments
(foodstar + fortunecode + hansen)
= $38.8m + $33.678m + $22.424m
= $95m or $0.55 per sh

fair value of top 3 investments
= 70.901m + 31.335m + 23.115m
= $125.35m or $0.72 per sh

=============================

above DMG Goh Han Peng is quite a good analyst
looking at his report, my guess is at least another $0.16 div from their $0.96 cash

vested

[ichew]

transpac selling their foodstar biz to heinz for us$165m = s$226m or abt s$1.30 cash per sh
their immediate sh abt $0.903, others held by their funds etc

as at 1Q10
NAV = $1.81
cash = 170.792m
debt = 0
equity = 350.687m

add this foodstar sale proceeds, we have cash of abt $2

left with biz assets = fortunecode + hansen
worth as at AR09 = 31.335m + 23.115m = 54.45m or $0.309 per sh

so need to ask ourselves if it is worth $1.74 now to buy a company worth abt $2 cash + $0.30 worth of other biz
I tink yes and that they shld be able to declare at least $0.50 dividend
so by end of the FY, this shld trade nearer to $2 at least ... my own views

Risks
- deal don’t go thru
- they don’t return much div
- they use money on other new investments
which I doubt so as they have enough cash to pay 50cents n invest the rest

vested

[ichew]

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

"On 21 June 2010, the Company announced that it had, together with Transpac Nominees Pte Ltd and Transpac Capital Pte Ltd (the Investment Manager of the Company), entered into a conditional Stock Purchase Agreement with Heinz China Investment Company in relation to the sale of the entire share capital of Foodstar Holdings Pte Ltd.
The transaction has been completed on 2 November 2010 and a separate announcement on the matter will be made shortly."

[ichew]

http://info.sgx.com/webcoranncatth.nsf/ ... penelement
http://info.sgx.com/webcoranncatth.nsf/ ... penelement

love the way the guys at transpac works
so far, they will always quickly declare interim div once deal is done

they r giving away $0.41 div this round
xd = 25nov10

shld give some more at their FY results

[ngcheeki]

they r giving away $0.41 div this round
xd = 25nov10

shld give some more at their FY results

If not for the drop in exchange rate between US against S$, the dividend should be 50 cents . Why don't they hedge the
exchange rate when they're closing the deals?

By the way, as stated in the announcement "there will be significant expenses related to this transaction such as performance
incentive fees payable to the investment manager, legal and financial advisory fees and contingent liabilities arising from the
representation and warranties given to the buyer". This will definitely reduce the NAV per share of S$1.91? Hopefully, there'll
be earn out payment from foodstar if their earning meet their targets till 2014.

Next, how much profit is the company making when with the placement of OUE shares by Fortune Code Limited (FCL) which 7.95% own by
TIH?