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Technology Stocks : Softbank Investment International (HK0648) -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (596)	11/6/2001 10:18:29 PM
From: ms.smartest.person	Respond to of 615

Research Report?? 05/02/01 Softbank International Investment (0648) - TRADING BUY Source from Tai Fook Securities Summary Softbank International Investment will acquire 51% of e2-Capital Holdings Securities division e2-Capital Securities for a consideration of $318.5m. The valuation implies a total value of $625m for e2-Capital Securities, making it one of the most highly valued local brokerages in Hong Kong. Synergy between Softbank and its newly acquired investment arm will be highs, with the new bud bringing with it a more visible revenue base, enhancing Softbank's investment value. We are upgrading the company to TRADING BUY. Table 1 Year end Dec 99 2000F 2001E 2001E Net profit (HK$m) -32 -30 N.A N.A EPS (HK$) -0.055 -0.031 N.A N.A EPS change (%) -39 -8 N.A N.A DPS (HK$) N.A N.A N.A N.A Yield (%) N.A N.A N.A N.A PE (X) N.A N.A N.A N.A Suggested price: HK$1.02 (02/02/2001) (11/6/01 price HK$0.365) Highlights Softbank International Investment will acquire 51% of e2-Capital Holdings (0378.HK, $0.47) Securities division e2-Capital Securities for a consideration of $318.5m. the deal will be settled by $130m in cash and the rest of $188.5m with the issuance of 192m new shares to the vendor at $0.98 cash each. The deal will be financed by a $130m cash injection from parent company Softbank Corp in Japan by subscribing to 132.7m new shares at $0.98 each. Its stake in Hong Kong listed subsidiary will be diluted from 55% to 52.9% after the transaction, while e2-Capital Holdings will own 8.7%. E2-Capital Securities is principally engaged in the business of Investment banking, securities brokerage, and portfolio management. It made a net profit of $6.2m in 1999, compared to a net loss of $57m in 1998. E2-Capital was the financial adviser of Softbank when it acquired the listing shell of Cheung Wah Development in January 2000. For comparison, the FY00 P/E of Industrials peers Tai Fook Securities Group (0665.HK, $1.46) and SW Kingsway (0188.HK, $0.81) is 2.5x and 4.8x respectively. Their sizes are $713m and $539m respectively. Commenting on the valuation of the latest deal, Softbank CEO Yoshitaka Kitao remarked: "The consideration is relatively higher, but we believe it could bear good fruit in the future. We are optimistic on the speculative interest of Softbank, as its parent company is the largest Internet based company in the Asia. So , we are upgrading our recommendation to a TRADING BUY. Infocast Ltd. 20/F Western Harbour Centre, 181 - 183 Connaught Road West, Hong Kong. Tel: (852) 2589 9571 Fax: (852) 2975 8098-9 support@infocast.com.hk © Copyright 1998 by Infocast Ltd. All rights reserved. Remarks:Infocast and all the data contributors do not warrant the correctness or completeness of this report and shall not be liable for any damages, injury or economic losses claimed by subscribers, readers or other parties. ¡@ ¡@ ¡@ BACK