Hong Leong Asia.
It has a 34.88% stake in China Yuchai International, 72.79% in Tasek and a stake of 17.22% in HL Global.
Value of Yuchai
= 34.88% x US$467.7 million ( market capital of CYD, US$12.50 per share)
= US$163 million
= S$203.9 million
Value of Tasek
= 72.79% x RM$1174.4 million ( market capital of Tasek, RM$9.50 per share )
=RM$854.84
=S$340.57 million
HL Global is held through Yuchai, so will not be included in the valuation.
Total Value via Yuchai and Tasek = S$203.9 + S$340.57 = S$544.77 million
Total outstanding shares of HL Asia = 373.908 million shares
Value per share = S$1.456
HL Asia price is $1.69 on 25th July 2012.
Therefore we are valuing the remaining business at S$0.23.
So what does the remaining business include?
1) Henan Xinfei (one of China’s top three largest manufacturers of refrigerators and freezers),
2) Rex Industrial Packaging Division (manufacturer of industrial packaging containers),
3) GPac Technology, a green packaging company wholly-owned by the Group, is an innovative manufacturer of pallets, which are used for industrial storage and transportation,
4) Island Concrete (Private) Limited, one of the largest ready-mixed concrete suppliers in Singapore.
In Theory , we are buying the remaining business at $0.23 which is cheap in my opinion.
Should China Yuchai which is trading at 3.9x PE ratio be trading at 8x PE ratio, it can potentially increase the value of HL Asia by 57 Sing cts .
I would recommend a Buy at $1.69 to ride on the recovery of its business.
Hong Leong Asia has under its
Consumer Products, Diesel Engines and Industrial Packaging arms, three
leading China-based manufacturing businesses, namely Henan Xinfei (one
of China’s top three largest manufacturers of refrigerators and
freezers), China Yuchai Group (China’s largest independent diesel
engines manufacturer), and Rex Industrial Packaging Division
(manufacturer of industrial packaging containers).
It has a 34.88% stake in China Yuchai International, 72.79% in Tasek and a stake of 17.22% in HL Global.
Value of Yuchai
= 34.88% x US$467.7 million ( market capital of CYD, US$12.50 per share)
= US$163 million
= S$203.9 million
Value of Tasek
= 72.79% x RM$1174.4 million ( market capital of Tasek, RM$9.50 per share )
=RM$854.84
=S$340.57 million
HL Global is held through Yuchai, so will not be included in the valuation.
Total Value via Yuchai and Tasek = S$203.9 + S$340.57 = S$544.77 million
Total outstanding shares of HL Asia = 373.908 million shares
Value per share = S$1.456
HL Asia price is $1.69 on 25th July 2012.
Therefore we are valuing the remaining business at S$0.23.
So what does the remaining business include?
1) Henan Xinfei (one of China’s top three largest manufacturers of refrigerators and freezers),
2) Rex Industrial Packaging Division (manufacturer of industrial packaging containers),
3) GPac Technology, a green packaging company wholly-owned by the Group, is an innovative manufacturer of pallets, which are used for industrial storage and transportation,
4) Island Concrete (Private) Limited, one of the largest ready-mixed concrete suppliers in Singapore.
In Theory , we are buying the remaining business at $0.23 which is cheap in my opinion.
Should China Yuchai which is trading at 3.9x PE ratio be trading at 8x PE ratio, it can potentially increase the value of HL Asia by 57 Sing cts .
I would recommend a Buy at $1.69 to ride on the recovery of its business.
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