EXPOLANKA HOLDINGS PLC (EXPO.N0000)

cse.alpha wrote:WAPO has 25.8 mn shares in issue now - its net asset value (NAV) per share, even after allowing for 350% appreciation in 41.6 mn Expolanka shares (cost Rs 6 each - at Rs21, capital gain is around Rs 624 mn) is still under Rs 50 per share.

After 75 for 2 rights issue @ Rs 20 per share that raised Rs 503 million, WAPO's adjusted net book value (NBV) per share would be approx Rs 20 - total NBV of Rs 524 mn (Rs 250 mn worth of Expo Lanka shares, and Rs 270 mn of cash).

If ExpoLanka trades at Rs 21 (up 50% from Rs 14 IPO price), WAPO's Expo investment would be worth Rs 874 mn.

That would still raise WAPO's adjusted NBV per share by only around Rs 24 to approximately Rs 45 per share.

At Rs290, investors paying more than 6 times adjusted NBV, for what is basically an investment trust where net asset value is better valuation method than PER or discounted free cash flows methods, seem to be very confident of management ability to deliver exceptional super normal returns on adjusted asset base.

WAPO will do well, but will it do well enough to justify current prices of around Rs 290? Similar, but much larger investment trusts such as CINV and GUAR do not trade at such 6 times premiums to NAV.

Im too agree with cse. I calculate when the WAPO made thr initial announcement that period wapo arnd 800 & aftr increase and right issue. i check with 800 levels it should be arnd 40 - 45 .... bt now its higher Rs. 280 + ....

Further with new rules WAPO cant sell on EXPO 1st day @ Mkt. with my knwledge WAPO shd need many this kind of capital gains to justify with current mkt rate.

Pls point my mistake to correct me

Cheerz

mark wrote:

smallville wrote:

milanka wrote:

$$$ wrote:Respected company that has been in business for years ....

They are calling applications for a MBA/CFA qualified person to the Head the strategic Plannining and Business Development. The job is to evaluvate new business opperortunities and make strategic recommendations.

Looks they are getting ready to expand.

Well I could apply it seems... where did u get this?

WOW..........you got CFA?...............

It smells MBA nuh?

GOT IT MILANKA

so basically a person applies upto 7,100 shares will be considered as retailer. am i right? I think some days back they appointed some reputed directors also to their board - http://forum.srilankaequity.com/t2422-expolanka-holdings-appoints-independent-directors-pre-ipo

this should be really good....

Is it possible to give PRE IPO private placements at 6 and IPO at 14? no rules of pricing?

IPO fans ought to ask themselves why the hell they should pay 14 rupees for a share out of their life's savings, when companies with hundreds of billions of rupees worth of assets have been allowed to buy that same share at 6

Where was this PP news?
However with SEC new rules, they cant sell it on the market till a year rite?

smallville wrote:Where was this PP news?
However with SEC new rules, they cant sell it on the market till a year rite?

Well CINV has sold their EXPO holding to WAPO at 6 rupees per share http://www.cse.lk/cmt/uploadAnnounceFiles/4191301658437_612.pdf

Which possibly means
1) they bought the shares at less than 6
2) they can sell at anytime.

even WAPO can't sell that stuff for an year, it doesn't change the fact that they paid less than half the price that you are about to pay.,

tubal wrote:

smallville wrote:Where was this PP news?
However with SEC new rules, they cant sell it on the market till a year rite?

Well CINV has sold their EXPO holding to WAPO at 6 rupees per share http://www.cse.lk/cmt/uploadAnnounceFiles/4191301658437_612.pdf

Which possibly means
1) they bought the shares at less than 6
2) they can sell at anytime.

even WAPO can't sell that stuff for an year, it doesn't change the fact that they paid less than half the price that you are about to pay.,

Tubal
agree with you point on the retailers paying double.

Small:
Regarding CINV and WAPO. We need to double check what this new SEC rule says. Is selloff/trasnfer allowed within related companies is the question

slstock wrote:

tubal wrote:

smallville wrote:Where was this PP news?
However with SEC new rules, they cant sell it on the market till a year rite?

Well CINV has sold their EXPO holding to WAPO at 6 rupees per share http://www.cse.lk/cmt/uploadAnnounceFiles/4191301658437_612.pdf

Which possibly means
1) they bought the shares at less than 6
2) they can sell at anytime.

even WAPO can't sell that stuff for an year, it doesn't change the fact that they paid less than half the price that you are about to pay.,

Tubal
agree with you point on the retailers paying double.

Small:
Regarding CINV and WAPO. We need to double check what this new SEC rule says. Is selloff/trasnfer allowed within related companies is the question

Hi
I think the WAPO will be able to sell the shares as and when they decide, As per the amended SEC rule the shares allotted before Feb 7 2011 will not be bound to this rule.... Further CINV paid for the EXPO Lanka in 3rd quarter since we could there was amount 249Mn for pending allurement. I think shares would have been allotted in early Jan.

Just the attachment of SEC rules....

econ wrote:Is it possible to give PRE IPO private placements at 6 and IPO at 14? no rules of pricing?

@econ

Same thing was practiced by UBC (Union Bank of Colombo) and they had nice (nice to issuers) justification too. (see Page 155 of UBC prospectus)

According to Page 156-158 of the same, about 150M shares were issued as PP @LKR12.5 few months ago, while the IPO was @25/-.

I'm not very sure whether any of subscribers to PP were sold full/part of their stakes at the market. (the 12 months LOCK was not applicable to them)



Decleration : I don't have UBC or WAPO shares with me.

Thanks Seyon for the insight..

So we're arriving at the following;

1.) CINV has bought the shares before 7th Feb 2011
2.) CINV transferred the shares to WAPO and WAPO can sell it at even 15/- with abt 150% gain on first day it self.
3.) The amt of shares in question was a huge 41.6 Mn, which will not be healthy for the upside of the Expo shares.. If they sell low these orders will attract crowd and instead of selling, everyone will buy.

Even we would buy if this trades around 15-16 as its just 2 rs ahead of IPO price..

So what do you guys think?

smallville wrote:Thanks Seyon for the insight..

So we're arriving at the following;

1.) CINV has bought the shares before 7th Feb 2011
2.) CINV transferred the shares to WAPO and WAPO can sell it at even 15/- with abt 150% gain on first day it self.
3.) The amt of shares in question was a huge 41.6 Mn, which will not be healthy for the upside of the Expo shares.. If they sell low these orders will attract crowd and instead of selling, everyone will buy.

Even we would buy if this trades around 15-16 as its just 2 rs ahead of IPO price..

So what do you guys think?

Three PLCs CINV, WAPO and GUAR are at strong positions, ……….I do not think they will sell those stocks, often they collect more stocks……..very often strengthen their portfolios. ..CINV has no financial constrains……. GUAR also owns Guardian Fund management limited….. GUAR recently made extra ordinary profits. ….Expolanka pre IPO investments are an added advantage for CINV and GUAR….CINV further strengthen their positions… Monday onwards …

smallville wrote:Thanks Seyon for the insight..

So we're arriving at the following;

1.) CINV has bought the shares before 7th Feb 2011
2.) CINV transferred the shares to WAPO and WAPO can sell it at even 15/- with abt 150% gain on first day it self.
3.) The amt of shares in question was a huge 41.6 Mn, which will not be healthy for the upside of the Expo shares.. If they sell low these orders will attract crowd and instead of selling, everyone will buy.

Even we would buy if this trades around 15-16 as its just 2 rs ahead of IPO price..

So what do you guys think?

I don"t think the WAPO will sell shares in early stage.. as u said it is not healthy for Expo Lanka.. They might hold this for to get the max return or time to come for other opportunity to invest in companies in pre IPO stage... WAPO will decide to sell... Since WAPO is mainly set up to manage the private equity fund like companies in pre IPO stage...

Happy Trading

seyon wrote:
I don"t think the WAPO will sell shares in early stage.. as u said it is not healthy for Expo Lanka.. They might hold this for to get the max return or time to come for other opportunity to invest in companies in pre IPO stage... WAPO will decide to sell... Since WAPO is mainly set up to manage the private equity fund like companies in pre IPO stage...

Happy Trading

I hope they wont.. but look at the upper-hand WAPO gets if they do so.. They could easily claim the profit and use half of the money to invest in next two IPOs without any trouble at all.. By that means the original investment is safe Who knows WAPO is so unpredictable..

9 Months profit (net of minority interest and tax) 1,267,856,108
Segment contribution
Transportation 72%
Others- Including Manufacturing 19%
International trade 6%
Strategic Investment 3%
post IPO shares in issue 1,954,915,000
Annualized EPS 0.86
Issue Price 14
Issue PE 16.4
Sector PE 35.39
Value at sector PE 30.30

Expo 9 month net profit is Rs1.27 bn (page 76) - profit attributable to ordinary shareholders is what matters for EPS.

- Based on 1.78 bn shares in issue before IPO, this means a 9 month EPS of Rs0.7

the IPO price you might say is not vastly over priced for a conglomerate but the biggest problem is that the existing shareholders had sold nearly 300 million of shares at a price of Rs 6/=, so friends and the big players have got 300 million shares at 6/= while retailers and smaller big boys are going to get 172 million at 14/=......the question is will those 300 million shares get dumped onto the market on the first day or will the SEC one year lock rule apply to them?

SEC one year lock in rule will not apply to Expo because :

a) 300 mn private deal at Rs6 was a sell down of existing shares, not a new issue - rule only applies for an allotment, i.e. a new issue, of shares

b) Issue was probably done before 7th Feb 2011, which was date from which SEC rule applies

Refer this post also for further details:

http://forum.srilankaequity.com/t2772-sec-one-year-lock-in-rule-and-impact-on-flch-expo

It was a share sale between CINV & WAPO.. CINV selling big amt to WAPO..CINV has bought these shares last year it seems..

Now calculate the fact that WAPO can easily book some profit by disposing these shares at 14-16 even dragging the counter down on first day itself..So u may not be able to book a good profit with it or u may have to hold onto it for a long time to realize a decent gain..

We dont have any guarantee over this, are we?
This is wat I've been thinking of this Expo now..

We may get a 300 million avalanche on the first day.....let's see how the "insiders" manage this.

Actually for retailers and the longer term health of the market it may be good to have a spectacular collapse of a premium priced IPO, that's the only way we'll get to see an IPO priced with a PE in the single digits.

Which billion plus IPO will be the first to close below IPO price on the first day?

Retailers can apply up to 7,000 Shares

What's the reason they sold the shares at 6/- at private placement. They should have gone to IPO directly without private placement.

Anyway Indirectly WAPO will be the winner. Let's see.

innam wrote:the IPO price you might say is not vastly over priced for a conglomerate but the biggest problem is that the existing shareholders had sold nearly 300 million of shares at a price of Rs 6/=, so friends and the big players have got 300 million shares at 6/= while retailers and smaller big boys are going to get 172 million at 14/=......the question is will those 300 million shares get dumped onto the market on the first day or will the SEC one year lock rule apply to them?

yes this private placement thing should be regulated more by cse. otherwise IPOs are not attractive for retailers as only big players just gain billions.

econ wrote:

innam wrote:the IPO price you might say is not vastly over priced for a conglomerate but the biggest problem is that the existing shareholders had sold nearly 300 million of shares at a price of Rs 6/=, so friends and the big players have got 300 million shares at 6/= while retailers and smaller big boys are going to get 172 million at 14/=......the question is will those 300 million shares get dumped onto the market on the first day or will the SEC one year lock rule apply to them?

yes this private placement thing should be regulated more by cse. otherwise IPOs are not attractive for retailers as only big players just gain billions.

Regulators can't do anything about stupidity. All that's needed is for retailers to stop being stupid.

wiser wrote:Anyway Indirectly WAPO will be the winner. Let's see.

is it good to buy WAPO expecting the prices to move up with the Expo share price

tinyman wrote:9 Months profit (net of minority interest and tax) 1,267,856,108
Segment contribution
Transportation 72%
Others- Including Manufacturing 19%
International trade 6%
Strategic Investment 3%
post IPO shares in issue 1,954,915,000
Annualized EPS 0.86
Issue Price 14
Issue PE 16.4
Sector PE 35.39
Value at market PE 30.30

Further when u dig the its financial out of 1.26Bn ( profit attributable to O/S) 822 million rupees arrived from other income, which included 313 million rupees capital gains on sale of investments, 21 million from debt recoveries, and 76.3 million rupees from negative goodwill.

So if u take out these from profit, only 850Mn from the operation is reported ( 1.26 -0.313-0.021-0.0763) then the diluted EPS would be 0.43( 850Mn/1.954Bn shares, post IPO). Therefore issue PE @ 32X, this is fairly trading line with sector PE...

Further Book Value is only 2.77, then PBV is about 5x... Look at others in diversified sectors, out of these CARS & RICH are trading more than 5 times, others are pretty much attractive when comparing with EXPO..

CARS- 6.23x
JKH - 3.46x
HAYL -1.87x
RICH- 5.8x
CTHR - 4.15x
HHL - 2.88x
SPEN- 3.32X

Further when u look at the share holding 130,500,000 shares representing for others, which may have allotted to friends, relatives and family members or other institution.. I guess these shares would have been issued @ very cheap price ( may be @ 6). Hence these shareholders will dump the shares even @ Rs.14 to get max return...

So guys what do u think about EXPO in this scenario... whether we ( retailers) will benefit from this subscription...

Pls explain anyone knows about transportation industry ( Fright service) to how the business model of EXPO in future..


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