SE Global Equities (SEG) has made significant progress in the past 6 months.
On November 25, 1999 the company announced that leading broker firms in eight countries had executed a binding memorandum of understanding with SEG. These brokers would covers markets including the Hong Kong and Kuala Lumpur exchanges, the Shanghai, Shenzhen, Indonesia, Malaysia, and Philippine markets, as well as the National and Mumbai stock exchanges in India. In addition, the company announced that a host of other brokers in Thailand, Hong Kong, Brazil, Berlin and Australia are now in the process of approving the company's memorandum of understanding for their respective markets.
On February 1, 2000 the company announced that it intended to undertake two levels of equity financing to raise $50-million (U.S.) for SEG. The company intends to sell 22% of its ownership in SEG for $10 million US as pre-IPO seed capital. The company then intends to raise $40 million US through an IPO on the Hong Kong Growth Enterprise Market ("GEM" Exchange). After the IPO the company intends to maintain a majority equity interest (<50%) in SEG.
On February 28, 2000 the company announced that it had already received substantial commitments to complete the pre-IPO investment of $10 Million US into SEG and that the closing date for this financing was March 24, 2000.
On March 13, 2000 the company announced that SEG has executed the sponsorship agreement with two leading brokerage firms from Asia. The sponsorship agreement appoints ICEA Capital Limited and Tai Fook Capital Limited, both from Hong Kong, as SEG's sponsors for its Hong Kong IPO. ICEA has been appointed as the global coordinator, sponsor and lead manager, and Tai Fook will serve as the joint-lead sponsor and joint-lead manager. In addition to the sponsorship arrangement viith ICEA and Tai Fook, SEG received confirmation from Taiwan Securities and Sincere Securities to serve as SEG's co-manager and underwriter in the forthcoming Hong Kong IPO
I am under the understanding that the company plans to close both rounds of financing by the June and IPO on the GEM Exchange in the fall (August/September).
Unlike many of the underwriting agreements in North American which are best effort financing, when a brokerage firm in Asia executes an agreement to underwriter a company they agree to raise the entire amount of the issue. In other words, this is now next to a done deal.
Financials from Sedar:
For the Quarter Ended October 31/99
Cash = $640,616
Account Receivable plus inventory = $144,367
Capital Assets = $457,001
Liabilities
Accounts payable plus payments due to related parties = $787,829
Since this financial statement was filed the company has received $2.13 million from private placements and will receive an additional $2 million from the private placement announced January 18, 2000. This gives the company approximately $5 million in cash ($5.4 million in assets) as soon as the latest financing closes.
When the IPO financing closes the company will receive an additional $50 million US = $73 million Cdn and own a majority equity interest (<50%) in SEG. This will result in the company holding approximately $78 million in cash and owning a stake in SEG worth approximately $75-80 million before the IPO on the Hong Kong Gem exchange.
Total assets at this point in time not including CIBT will equal approximately $150-160 million Cdn. Doing the math just for fun - that is $17-10 / share depending if you use the current shares outstanding or the fully diluted shares.
However the unknown quantity is how the shares will perform on the GEM exchange. If the shares perform exceptionally on the GEM exchange, CPT?s majority equity interest in SEG could be worth significantly more.
The Growth Enterprise Market ("GEM" Exchange - hkgem.com is the name of the new stock market launched by the Stock Exchange of Hong Kong in November 1999. This new exchange is being governed by the Board of the Stock Exchange of Hong Kong. As a stand alone entity, it operates under its own listing rules and requirements. Basically it was created to provide the Eastern countries with its own version of the NASDAQ based in the US.
Prior to the creation of the GEM, the strict listing guidelines of The Hong Kong stock exchange was forcing a large number of new Asian technology / Internet companies to list, and raise capital on, the NASDAQ exchange. The Hong Kong exchange felt pressure to address this situation. Not wishing to lose new companies to NASDAQ - but also not willing to lower their own listing requirements, the exchange created the new GEM exchange with listing requirement which were geared towards the new breed of technology / Internet start up companies.
The GEM exchange is currently comprised of 14 publicly traded companies. With the pending IPO of the 15th company to list on the exchange, they will officially launch a price index. GEM has seen an explosive growth in both interest and investors. On March 9, 2000 the GEM hit an all-time high with a staggering 4.1 billion shares changing hands. There is already a large backlog of companies wishing to list on the GEM exchange and it is expected that at least another 25 companies will be listing on this exchange within the six month. Included in this waiting list is CPT's 100% owned subsidiary SE Global Equities Company Limited ("SEG").
Tai Fook Securities managing director Peter Wong Siu-hoi, who is also a member of the GEM listing committee, recently said in an interview that "Both investors and issuers are attracted to the GEM board due to the recent hype of the GEM issues." Mr. Wong went on to say that he thinks that "the 12-month target of growing the GEM board into $100 billion total market capitalization can easily achieved."
After reviewing the individual performances of many of the 14 listed companies, it would not be exaggerating to say that the performance of some of these companies' share prices have been exceptional especially given the difficulties in the Asian markets over the past few years. The information on the IPO price and current price was pulled from the following link: hkgem.com. The chart of each stock can be viewed at quote.e-finet.com. For your reference, the four numbers at the front of the name are the symbol for the stock. (Note: 1.00HK= .13 US)
8001: Tom.com: Issued 428m shares @ $1.78hk = raised $99 million US
High $15.35 (762%), Current $11.80 (562%)
8016: China Datacast: Issued 30m shares @ $1.28hk = $5 million US
High $14.50 (1032%), Current $13.90 (980%)
8006: HongKong.com: Issued 640m shares @ $1.88hk = $156 million US
High $9.10 (384%), Current $5.45 (189%)
8033: Vodatel Network: Issued 150m shares @ $1.33hk = $26 million US
High $4.25 (219%), Current $3.98 (199%)
8005: Yuxing Infotech: Issued 100m shares @ $4.20hk = $55 million US
High $9.10 (116%), Current $7.70 (83%)
8028: Timeless: Issued 150m shares @ $3.00hk = $58 million US
High $8.50 (183%), Current $5.30 (76%)
8018: SIIC Med Tech: Issued 215m shares @ $1.63hk = $45 million US
High $2.75 (68%), Current $2.00 (22%)
8040: Fortunetele.com: Issued 75m shares @ $2.50 = 25 million US
High $5.70 (128%), Current $3.00 (20%)
8003: TS Telecom (subsidiary of TOM on the CDNX):
Issued 64m shares @ $1.50hk = $12.3 million US
High 2.60 (73%), Current 1.61 (7%)
8013: Pine Technology: Issued 173m shares @ $1.50hk = $34 million US
High $2.80 (87%), Current $1.54 (2%)
8015: Qianlong Tech.: Issued 80.5m shares @ $1.06hk = $11 million US
High $1.53 (44%), Current $1.07 (1%)
8011: China Agrotech: Issued 67.5m shares @ $1.20hk = $10.5 million US
High $2.75 (129%), Current $0.92 (-25%)
8025: Asian Info. Resource Holdings: Issued 108m shares @ $1.25hk = $17.5million US
High $1.60 (28%), Current $0.96 (-24%)
8012: FE Poly Chem: Issued 55.4 m shares @ $4.68hk = $33.7 million US
High $4.70 (1%), Current $3.25 (-30%)
The excitement on the NASDAQ is nothing in comparison to some of the mania surrounding recent IPO's on the GEM exchange. For example, on March 1/2000 TOM.COM went public on the GEM Exchange through the issue of 42.8 million shares to the public. These shares were over-subscribed by a staggering 669 times. More than 300,000 people queued in the wet and cold outside their banks throughout the week before the debut to deposit their applications to purchase shares. It was necessary to call in police just to control the crowds. On the first day of trading the shares were up over 300% and they traded 303 million shares in that day. They are presently still up over 560% from their initial IPO price.
Juliette Chow, head of Internet & new media equity research of Lehman Brothers Asia Ltd, said that one of the major reasons for the surge of TOM.COM's IPO price was that it was caused by the scarcity of listings on Growth Enterprise Market (GEM) Board and the massive demand for these new Internet / technology companies in Asia.
In a news release dated March 12, 2000, the SFC (Securities and Futures Commission) and the SEHK (Stock Exchange of Hong Kong) have announced that they will relax GEM's current market rules to make it even easy for companies such as SEG to receive a listing. This is an attempt by both governing bodies and the GEM exchange to better position itself as a competitive exchange in the world's investment market. With the GEM aiming to be somewhat of an Asian NASDAQ by providing similar opportunities to it's own companies, these modified rules were necessary and welcomed.
hkgem.com
insidechina.com
webb-site.com
Links:
Introducing GEM: hkgem.com
GEM Homepage: hkgem.com
GEM Volume Index: hkgem.com
GEM Listed Companies: hkgem.com
GEM NR Archives: hkgem.com
GEM Price Index: insidechina.com
Best Regards
KEITH |
