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

To: speculatingvalue who wrote (918)	11/22/1999 8:52:00 PM
From: M. Merriam	Respond to of 1762

I don't know if they're holding back less than 70%, but they're certainly holding back information, and that alone could explain the discrepancy. Mike

To: speculatingvalue who wrote (918)	11/22/1999 9:14:00 PM
From: Gordo	Read Replies (1) \| Respond to of 1762

Steve, As has been pointed out previously, holding companies almost always trade at a discount to the combined value of their subsidiaries, therefore a valuation of $2.62 is not reasonable. A case in point closer to home is BCE, whose share price does not at all reflect the true value of its BELL Canada, Bell Mobility, Nortel and other holdings. Every time Nortel shares go up a buck, BCE should go up 65 cents based on its holding, but if you look at historic stock charts for these two, you will see that this is not at all the case, and that BCE stock price dramatically lags the valuation of the Nortel shares that it holds.

To: speculatingvalue who wrote (918)	11/22/1999 9:49:00 PM
From: Ciao	Read Replies (1) \| Respond to of 1762

Steve, we can't expect the TOM to hit $2.62 or $3+ "overnight". The market is inefficient. We must congratulate management of TS TELECOM. I had a 5 minute perusal of TST's prospectus. The following is clear, TS TELECOM is the ultimate holding company of TST whose sole asset is TST. Based on what 100% of the shares are worth (ie. at $HK1.50), Geoff's calculation of $3+ is correct. Of course the money from the IPO belongs to TST and ultimately TOMmy. What sort of discount would apply to a holding company whose only asset is TST. Iff TOMmy had several holdings or a complex structure, I believe discounts of 20% would not be uncommon. In our case, things look simpler, but let us apply a 20% discount. So TOMmy could be trading at $2.40 if the market was efficient. As we know, the market isn't, especially for microcaps. That enables us to buy undervalued stocks. So TOMmy is worth $CDN2.40 with TST at $HK1.50. For those who can, they will buy TOM, for those who can't, they buy TST. What happens if TST doubles from $HK1.50 to $HK3, TOMmy would be worth about $4 (they own approx. 64%). The following profit forecast is from the prospectus >>>>>> Profit forecast The Directors forecast that, in the absence of unforeseen circumstances and on the bases and assumptions set out in Appendix II, the combined profit after taxation but before extraordinary items of the Group for the year ending 31st March, 2000 will not be less than HK$36 million. The Directors are not aware of any extraordinary items which have arisen or are likely to arise during the year ending 31st March, 2000. The forecasted profit of not less than HK$36 million for the year ending 31st March, 2000 represented an increase of approximately 177% from the net profit of approximately HK$13 million for the year ended 31st March 1999. The substantial increment is primarily attributable to (i) the Group?s engagement in assembling business since May 1999 which significantly improves the Group?s profit margin and (ii) the expected recovery of orders from customers in the PRC which generally increases the Group?s turnover. On the basis of the above profit forecast and on the basis of a weighted average number of 211,272,329 Shares expected to be in issue during the current financial year immediately following the completion of the Share Offer and the Capitalisation Issue, the forecast earnings per Share on a weighted average basis for the year ending 31st March, 2000 will be 17.04 cents representing a price/earnings multiple on a weighted average basis of 8.8 times based on the Issue Price. On the assumption that the Share Offer and the Capitalisation Issue had been completed and a total of 264,000,000 Shares had been in issue during the current financial year, the forecast pro forma fully diluted earnings per Share is equivalent to 13.64 cents, representing a pro forma diluted price/earnings multiple of 11.0 times based on the Issue Price. <<<<<<<<<<<<<<<<<<< IMHO, that is a low valuation. I'm not sure what multiples, small cap hi-tech telecommunications stock trade on the Hang Seng, but I bet a profitable company will trade at higher multiples than 11. BTW, Chinese investors are great speculators! Will TST rise above IPO. I will almost guarantee it. Everyone wants to see a successful IPO on this new GEM market. Will TOMmy double overnight? That is a distinct possibility. There are not a lot of shares available to the public, most have been bought out by financial institutions (they may resell to clients?!). So what about the "depressing" shares for sale? As some of us suspect, it is a ploy for us to sell our shares early, taking a small profit, while someone else tries to pick up relatively cheap shares. I'm sure that the Sagit Cambridge funds can pick these shares up, they must be up to speed on what has been developing. I think JT picked a very reasonable target of $3 by year end. That's all for now, I must have erred in my rash analysis. Let's enjoy the ride. REMEMBER: TS TELECOM management owns about 50%+ of the shares of TS TELECOM and they have been more patient than us. They have offered themselves and us a vehicle to enhance shareholder value. Don't get off the train too fast and don't try to stop it either (ref. to house 02). PS. I am seriously thinking about buying more! Call me a fool!