Sunday, June 05, 2016 6:02:25 AM
If I would guess where the spinoffs will be listed, it would look like this
- Aqua: Norway
- Beef: Hong Kong
- Plantation: China
- Resale (Sales/import/export): London
Having stocks in Hong Kong is not a problem for anyone. Having stocks in London is not a problem for anyone either. Having stocks in Norway might be a problem for some people, but they could just get a second listing on pink sheets or something. Having stocks on the Chinese markets is a problem for everyone, but on the other hand, no one cares about the plantation, so they could just sell everything and distribute a cash dividend to us shareholders instead.
- SIAF: NYSE/Nasdaq
When all of these listings are done, I think they will try to up-list SIAF on a big board in USA again. Because now SIAF will be worth billions and have a track record of giving out huge dividends. No one will say no to a billion dollar company paying dividends. I just can imagine the satisfaction of Solomon when all the bid boards are smiling to Solomon and asks him to list on their exchange.
Now all the hard core SIAF owners will who has been more or less all on in SIAF, will suddenly have a well diversified portfolio with holdings all around the world.
Now let me shot from the hip and guess what the portfolio will be worth after 2020. I assume that there will be 23million shares outstanding in SIAF at that time
Lets say that the Aqua business is producing 50.000 tons of prawns this year. Lets say that they are making $5000 net profit on each ton. That is a $250 million net profit. I'm guessing that the SIAF shareholders will have received 25% of the company and that SIAF will remain holding 25% after the spinof. I'm guessing that the Aqua business will be valued at PE15 in Norway.
So the value of the Aqua business share that the share holders has received could be worth 250x15x25%/23= $41/share.
The Cattle business is tricky, but i will just assume that they will make a net profit of $100 million. I will also here assume that the beef business will be value at PE 15 in Hong Kong. I know that SAF currently only owns 45% of SJAP, but they have many times indicated that we own more. So I will assume that the SIAF share holders will remain a 25% stake in the company and the that SIAF will also remain a 25% stake in the company.
So the value of the beef business that the share holders has received could be worth 100x15x25%/23= $16/share.
I will assume that the plantation will do a net profit of $9 million. I assume that the SIAF will remain a 25% stake in the company, and a 50% stake will be sold and distributed as a cash dividend to the shareholders. I assume the the company will be value at PE 10 (yes high, but they have huge valuations over there). So the cash dividend would be 9x10*50%/23= $2.
For Resale, I will guess that they will resale products for a billion dollar a year ($750million worth of prawns alone). The profit margin I'm guessing is 10%. So total net prfit would be $100 million. Im gussing that SIAF will spin-off 25% of the company, give 25% to the shareholders and remain a 50% stake. I assume that Resale will be valued at PE10, mainly because of the the healthy annual dividends. So the value of the beef business that the share holders has received could be worth 100x10x25%/23= $11/share.
Now lets sum up what SIAF might be worth at the time. The total value of the spinof companies will be - (250x15x25%)+(100x15x25%)+(9x10*25%)+(100x10x50%) = 937,5+375+22,5+500= $1835 millions. SIAF will still have the engineering business running, so let value that part to $165 million just to round up the numbers. Since SIAF now is almost a pure holding company, I will give the company a 25% discount. So the value of the SIAF share will be 2000/23-25%= $65/share
Now the total value of one SIAF share including all it's dividends will be 42+16+11+65= $134/share, oh, yes we also got that $2 dividend
Yes it's sound allot, but it's not much more than a doubling of share price each year for a few years a head... and by the time we reach this valuation, the annual cash dividends alone from the companies will be higher then the current valuation of SIAF.
- Aqua: Norway
- Beef: Hong Kong
- Plantation: China
- Resale (Sales/import/export): London
Having stocks in Hong Kong is not a problem for anyone. Having stocks in London is not a problem for anyone either. Having stocks in Norway might be a problem for some people, but they could just get a second listing on pink sheets or something. Having stocks on the Chinese markets is a problem for everyone, but on the other hand, no one cares about the plantation, so they could just sell everything and distribute a cash dividend to us shareholders instead.
- SIAF: NYSE/Nasdaq
When all of these listings are done, I think they will try to up-list SIAF on a big board in USA again. Because now SIAF will be worth billions and have a track record of giving out huge dividends. No one will say no to a billion dollar company paying dividends. I just can imagine the satisfaction of Solomon when all the bid boards are smiling to Solomon and asks him to list on their exchange.
Now all the hard core SIAF owners will who has been more or less all on in SIAF, will suddenly have a well diversified portfolio with holdings all around the world.
Now let me shot from the hip and guess what the portfolio will be worth after 2020. I assume that there will be 23million shares outstanding in SIAF at that time
Lets say that the Aqua business is producing 50.000 tons of prawns this year. Lets say that they are making $5000 net profit on each ton. That is a $250 million net profit. I'm guessing that the SIAF shareholders will have received 25% of the company and that SIAF will remain holding 25% after the spinof. I'm guessing that the Aqua business will be valued at PE15 in Norway.
So the value of the Aqua business share that the share holders has received could be worth 250x15x25%/23= $41/share.
The Cattle business is tricky, but i will just assume that they will make a net profit of $100 million. I will also here assume that the beef business will be value at PE 15 in Hong Kong. I know that SAF currently only owns 45% of SJAP, but they have many times indicated that we own more. So I will assume that the SIAF share holders will remain a 25% stake in the company and the that SIAF will also remain a 25% stake in the company.
So the value of the beef business that the share holders has received could be worth 100x15x25%/23= $16/share.
I will assume that the plantation will do a net profit of $9 million. I assume that the SIAF will remain a 25% stake in the company, and a 50% stake will be sold and distributed as a cash dividend to the shareholders. I assume the the company will be value at PE 10 (yes high, but they have huge valuations over there). So the cash dividend would be 9x10*50%/23= $2.
For Resale, I will guess that they will resale products for a billion dollar a year ($750million worth of prawns alone). The profit margin I'm guessing is 10%. So total net prfit would be $100 million. Im gussing that SIAF will spin-off 25% of the company, give 25% to the shareholders and remain a 50% stake. I assume that Resale will be valued at PE10, mainly because of the the healthy annual dividends. So the value of the beef business that the share holders has received could be worth 100x10x25%/23= $11/share.
Now lets sum up what SIAF might be worth at the time. The total value of the spinof companies will be - (250x15x25%)+(100x15x25%)+(9x10*25%)+(100x10x50%) = 937,5+375+22,5+500= $1835 millions. SIAF will still have the engineering business running, so let value that part to $165 million just to round up the numbers. Since SIAF now is almost a pure holding company, I will give the company a 25% discount. So the value of the SIAF share will be 2000/23-25%= $65/share
Now the total value of one SIAF share including all it's dividends will be 42+16+11+65= $134/share, oh, yes we also got that $2 dividend
Yes it's sound allot, but it's not much more than a doubling of share price each year for a few years a head... and by the time we reach this valuation, the annual cash dividends alone from the companies will be higher then the current valuation of SIAF.
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