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

To: geoff-t who wrote (886)	11/19/1999 12:10:00 AM
From: speculatingvalue	Read Replies (1) \| Respond to of 1762

Geoff, can you point me to a site where you are getting your information? I suspect a lot is up behind the scenes, but it is so difficult to get information on TOM. I'm glad to see they finally updated the web site. The press releases there used to only be current to the summer. If the sub is really raising that kind of money, there is a huge buying opportunity tomorrow AM as the impact on share price could be huge. It's a "no-brainer".

To: geoff-t who wrote (886)	11/19/1999 12:33:00 PM
From: M. Merriam	Read Replies (1) \| Respond to of 1762

Geoff, If T S Telecom Technologies Limited (8003) has indeed been approved for a GEM listing and is in the final stages of an offering, then its prospectus should be publicly available, especially if the listing is to take place by the end of the month. A simple call to Dao Heng Securities might result in them faxing it out. It occurs to me that TOM's implied value will depend on whether the funds from 8003's offering are going into 8003's treasury or TOM's. Either is possible. Reading between the line's of TOM's last press release, it appears to me that the funds will stay with 8003 and its wholly owned subsidiary. In that case, I stick with my previous calculations. The public is paying HK$97 m for 30% of 8003. This represents a 30% stake in 8003's wholly owned subsidiary, T S International Co., Ltd.(TSI), and a 30% stake in the HK$97 m which will be in 8003's account after the offering. 8003, after the offering, has an implied value of HK$323 m: HK$97 m in cash and the remainder, HK$226, being the value attributable to TSI. So, HK$97 m gets the public HK$29 m in cash (30% share in HK$97 m cash) and a HK$68 m stake in TSI (30% its implied value of HK$226 m). TOM is left with a HK$226 m stake in 8003, represented by HK$68 m in cash (70% of 8003's HK$97 m cash from the offering) and HK$158 m in assets (70% of 8003's HK$226 m subsidiary, TSI). In Canadian dollars, TOM's stake is worth CAN$42.6 m (HK$5.3=CAN$1). Assuming TOM has 20 m shares outstanding, this would imply a value of $2.13/sh for TOM. As I said, holding companies traditionally trade at a discount to their publicly traded subsidiaries. There can be exceptions, and perhaps Steve makes a good case why this discount might not apply to TOM, especially while North Americans appear so eager for NA listed China stocks. I suppose that TOM could even end up trading at a premium; however, personally, I'll be more conservative and apply a discount when attempting to project TOM's fair market value. Mike