|Shares Out. (in M):||0||P/E|
|Market Cap (in $M):||4,300||P/FCF|
|Net Debt (in $M):||0||EBIT||0||0|
AsiaSatellite (1135 HK) is a
At the current price of HK$11 (note: HK$7.8 per USD $1), the company trades at about 90% of tangible book value and less than 3x EBITDA. Excluding the excess HK$5.74 in net cash on the books, the stock trades for about 6x normalized earnings. There are 391 million shares outstanding and HK2.2bn of net cash. EBITDA is around HK$750 million per year. In USD terms, the float is about $140 million.
GE Capital and CITIC attempted, about a year ago, to buy out minority shareholders for HK $18.30. At the time, this looked like an unfair offer because GE Capital could readily finance the satellites at more than 5x EBITDA and strip out the excess cash. Private market values were in the mid to high-20s. The company says the transaction was rejected because the State Department wanted the company to remain public for US national security reasons. Upon further discussion with the company, however, it seemed there were ways that GE & CITIC could take the company private (by allowing a 3rd partner to participate, for example, or permitting State Department access to the operating statements). In truth, I think the transaction was rejected by minority holders due to an insufficient price. Unfortunately, however, the company botched their offer and the State Department ruled, and now the float requirement means the company cannot do stock repurchases. Therefore, the value investor’s favorite method of value creation – stock buybacks – is not an option here.
However, all is not lost. The business is valuable and generating cash flow. Also, the company has recently signed a number of deals to DTH service providers in
Ultimately, however, I think the catalyst is GE exiting by selling their shares in a secondary offering at a higher price. I believe this is a very large position for the private equity segment of GE Capital and they will probably be looking to monetize it in the next few years.
In terms of valuation,
I am interested in other orphaned companies trading at similar valuations, so if you know of any please post them here.
|Subject||Comparison with 1045?|
|Entry||08/27/2008 06:06 PM|
|Have you compared Asiasat with APT Satellite (1045.hk)? It also transmits to China and a quick glance shows:|
413mm shares o/s
HK$0.80 last trade
HK$330mm market cap
HK$312mm cash and equivalents
HK$280mm 2007 EBITDA
HK$1980mm tangible book value
I don't own the stock and haven't done any extensive research but it seems cheap like Asiasat and has had a similarly poor stock performance:
|Subject||RE: Comparison -corrected link|
|Entry||08/27/2008 06:10 PM|
|Previous chart comparison linked to the wrong symbol. Sorry about that.|