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Gold/Mining/Energy : TS TELECOM (www.tstelecom.com): ASPIRING TELECO -- Ignore unavailable to you. Want to Upgrade?

To: M. Merriam who wrote (883)	11/19/1999 12:03:00 AM
From: speculatingvalue	Respond to of 1762

Just checked the GEM website. It does not list TOM subsidiary among approved companies It is reasonable it wouldn't show there as it hasn't listed yet. Assuming that your figure of HK$97 m is correct for 30% of company, that would leave TOM owning the remaining 70% of the HK$323 m subsidiary, not 100%. Thus, TOM would hold CAN$2.28 of assets, not CAN$3.25. I assume that the sub is printing new shares to raise the $65 million. Therefore, TOM will own 70% of the company as it stands now without the financing plus 70% of the financing. The $3.25 figure is a closer approximation. Holding companies usually trade at a discount when the operating company is publicly listed. Given your figures, I would expect TOM to be trading somewhere between 50-70% of the $2.28 figure. I'm not sure what assets are in the sub and what is in the parent, but I don't understand why it would trade at a discount. If anything, I think it would trade at a premium as people can use a North American exchange to invest rather than deal with a Hong Kong exchange. I know I for one wouldn't bother with the Hong Kong listing. There are a lot of North Americans trying to purchase Chinese stocks given the WTO announcement.

To: M. Merriam who wrote (883)	11/19/1999 12:05:00 AM
From: geoff-t	Read Replies (2) \| Respond to of 1762

Thank you for your comments. (1) I cannot explain why TOM's subsidiary was not on the list of approved companies. My understanding is that the first listing is to take place on November 19 and a second on November 24. TS is one of four second-batch listing companies. I guess time will tell. (2)&(3) Yes, I cannot agree with you more as to your valuation of Can$2.28/share for TOM's 70% interest in its subsidiary. However, my valuation of Can$3.25 is inclusive of the HK$97 million in the sub's kitty which in fact is at the disposal of TOM. Having said this, I must add I have been wrong many times before and why would this be any exception. I will try to do more DD in the next couple of days and share my findings with you all.