What will SJAP spinoff be worth for us? I still don’t know exactly which companies that will be included in that spin off. I am guessing that SJAP, Hunan and the cattle farms will be included. The total net asset for those farms should be about $400m today. The net income for those companies is nothing to brag about for 2016 for different reasons, so let us use the assets to value this spinoff for now.
I am sure that Solomon and Co has some aces in their sleeves for those entities, but that will only be a bonus. If we assume that SIAF owns 50% totally of new listed company, SIAF keeps 25% and IPO 25% of the rest to give us a cash dividend. Say that the IPO can be done at 2xNTA, then the cash dividend would be 400x2x0,25 = $200m!
Again, the current market value of SIAF is about $100m.
