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Bloomberg: Singapore overpaid for Hainan Airlines

555

Alfrescian
Old Timer
#1
Is there any valuation at which Temasek Holdings Pte could buy into Hainan Airlines Holding Co. at a decent price? Considering the indebtedness of China’s most highly rated carrier, it’s hard to think of one.

Hainan Air’s shares have been suspended for six months while controlling shareholder HNA Group Ltd. is in intensive care. But the 7 billion yuan ($1.1 billion) valuation for a 20 percent stake to a group including a Temasek-owned fund gives you a decent idea of what it might be worth.

On first sight, the roughly 35 percent discount to the price at which Hainan Air’s shares last traded looks like a good deal. Still, once you throw in net debt of $7.8 billion you’re looking at an enterprise value around 50 percent larger than that of Temasek’s key airline shareholding Singapore Airlines Ltd., despite Ebitda about 15 percent lower.

Even if all Hainan Air’s equity was sold for a single yuan, that hefty debt pile would mean it was changing hands at a higher enterprise value-to-Ebitda ratio than Singapore Air, one of the best-run carriers on the planet. That feels like a rich price to pay.

Hainan Air’s net debt, meanwhile, is larger than that of the far bigger Delta Air Lines Inc. and Deutsche Lufthansa AG, and almost 26 times Singapore Air’s modest borrowings.

Again though, it’s questionable whether a less-than-20-percent interest in a fourth-placed carrier controlled by an indebted conglomerate is a good route to that – especially when you consider that Hainan Air’s regulatory release doesn’t even mention a board seat, which should be considered the bare minimum for a strategic investment of this sort.

While there are benefits to a love-in between Temasek and HNA, the Singaporeans should extract some bargain prices in return for their cash. Judging by this first deal, there’s precious little evidence of that.


https://www.bloomberg.com/view/articles/2018-06-11/singapore-inc-buys-an-overpriced-ticket-to-hainan
 

congo9

Alfrescian
Old Timer
#2
Think we are the ATM of the East. When Ho Ching Dabbles with stock and shares, Singaporean will pay. Like that very easy to do business leh for her and her bunch of followers at TH.
 

555

Alfrescian
Old Timer
#4
OFO and Xiaomi are also losing money because of cyptos crashing. Their subsidiaries have been involved cypto investments to fund for loss-making business models.
 

shittypore

Alfrescian
Old Timer
#7
Hello, can we blame her? What experience has she got in investment, she's just an ordinary Graduate with an Electrical Engineering degree, but married to Pinky. One can say today, she has mastered the art of buying at high and selling at low prices.
 

mojito

Alfrescian
Old Timer
#10
I thought India is growing India is the next China? Why go and buy Hainan airline? Hailam man give good blow? Last time Ching impulse buy UBS, Citigroup turn out to be disaster! :eek:
 

virus

Alfrescian
Old Timer
#19
there's only 1 way to overturn the bad deal, use the planes as restaurant and operate as hainan airline chicken rice with live chicken service at 1st class
 

soikee

Alfrescian
Old Timer
#20
Well done Whore Jinx, after spending US200m on Turkish restaurant Salt Bae now you burn another US1.1b on crippled Hainan Airline.

As what Tun Mahathir once said: "if we take from under the table, across the causeway they openly steal from the top of the table."

This blardy bitch is making all these rubbish deals in order to get kick-backs!
 
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