CO sollten wir auf jeden Fall nicht aus den Augen verlieren !!!
Research-Artikel von Core Pacific-Yamaichi
Core Pacific-Yamaichi Research
Company Visit Note
China Online (0383.HK)
Price (20/01/00): HK$0.242
China Sci-Tech (CST) bought a 32.82% stake in China Online (COL) from China Strategic
Holdings on 28 December 1999 for $840mn cash, to become COL’s major shareholder.
According to COL’s management, China Strategic no longer has a shareholding in COL.
CST and COL will both be reorganised. CST may become an investment holding company,
with COL as the operating arm. However, a final decision is yet to be made.
Looking for Acquisition Targets
COL’s management plans to turn the company into a hi-tech investment company. COL
would possibly acquire Internet content and service providers and telecom firms in the Greater
China region. The company is currently negotiating with mainland Internet firms regarding
possible acquisitions but no definite agreements have yet been made. COL may also invest
in mainland mobile phone services, as Beijing will allow foreign participation in such firms
once China joins the World Trade Organisation. Furthermore, COL’s management makes
no comment on the on-line gambling business, despite previous denials by CST that Stanley
Ho would inject such a venture into COL.
Investment in Internet companies would limit COL’s cashflow. In view of this, COL also
plans to expand its mobile handset distribution business this year, both in China and Hong
Kong. COL is already one of the two principle dealers for Nokia in Hong Kong. Tristar,
COL’s joint venture (55%-owned by COL and 45% owned by Japan-based Hikari Tsushin),
has already opened 180 retail outlets in China, mainly in northeastern cities including Beijing
and Shanghai. The company will expand this retail network to some 1,000 outlets (580-
1,000) in the near future to cover the whole China market.
Heavy Trading Discount
Through various corporate exercises, COL has about $700mn cash on hand. Management
revealed that COL still holds around 200mn PCCW shares. Based on closing price of $16.
0 per PCCW share on 20 January, we estimate the base case NAV of COL is around $3,
734.5mn, or equivalent to base case NAV per share of $0.408. The counter is therefore trading
at a discount of 41% to our base case NAV estimate. The downside risk appears limited
and in light of the current Internet frenzy, any potential acquisition announcement by COL
could certainly push up its share price. Investors should be aware, however, that COL is
still in the process of restructuring and it may take time to identify suitable acquisition targets.
We recommend SPECULATIVE BUY for this share.
Quelle mit weiteren Infos zu CO: www.zyber.de/tb/asien.htm