The Penny finally drops for Leong Sze Hian

[scroobal]

Looks like our financial whiz finally figured out how the valuation has been done since Ho Ching took over. He has always been very detailed but struggles to see the big picture.

The international financial community had been pointing this out for years. There is also a local chap that has been running a blog on this some years back.

Temasek did this after the Singtel listing debacle where the prices hardly moved after IPO. Now all Govt assets go thru Temasek before it is listed. Temasek keeps the difference as profits as though they built the business.




From State to Temasek
Posted by theonlinecitizen on June 20, 201114 Comments
6Share
Leong Sze Hian/
According to Changi Airport Group’s (CAG) Annual Report 2009/10 , “Changi Airport Group (Singapore) Pte Ltd (CAG) was formed on 16 June 2009 and the corporatisation of Changi Airport followed on 1 July 2009”.
Its revenue for the year was $961 million, profit after tax was $227 million and total assets was $7.2 billion.
Changi Airport only worth $3.3b?
According to the report, “the estimated consideration payable to CAAS for the transfer of airport undertaking and other assets is $3,277,987,000.” Also, _the consideration will be funded via “a capital injection by the immediate holding entity, the Minister for Finance (Incorporated).”
Does it mean that the Minister of Finance only paid $3.3 billion for the ‘World’s Most Awarded Airport’ with total assets of $7.2 billion, revenue of $961 million and profit after tax of $227 million?
So, now that it has been transferred to Temasek, to what extent will it boost Temasek’s annualised returns in the future, considering that the sum paid was arguably, grossly under-valued?
Do State assets increase portfolio returns?
In this connection, to what extent has the 1990′s corporatisation and transfer of state entities like SingPower and PSA, and the biggest single-year jncrease in its portfolio value with the listing of SingTel in 1993, contributed to its phenomenal 17 per cent annualised returns from Temasek’s inception?
Who benefits from the transaction when a state entity is corporatised? If an entity is sold, what is the price? How do Singaporeans benefit?
It may seem quite odd to debate and approve in Parliament the sale of a strategic state asset, like Chang Airport, when the price was still not known.
By the way who owns the 1,300 hectares of land that Changi Airport sits on?
And what is the valuation of this land?
How much does CAG pay for the use of this land?
Support TOC! Buy Leong Sze Hian’s book_here!
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[bhoven]

Looks like our financial whiz finally figured out how the valuation has been done since Ho Ching took over. He has always been very detailed but struggles to see the big picture.

The international financial community had been pointing this out for years. There is also a local chap that has been running a blog on this some years back.

Temasek did this after the Singtel listing debacle where the prices hardly moved after IPO. Now all Govt assets go thru Temasek before it is listed. Temasek keeps the difference as profits as though they built the business.




From State to Temasek
Posted by theonlinecitizen on June 20, 201114 Comments
6Share
Leong Sze Hian/
According to Changi Airport Group’s (CAG) Annual Report 2009/10 , “Changi Airport Group (Singapore) Pte Ltd (CAG) was formed on 16 June 2009 and the corporatisation of Changi Airport followed on 1 July 2009”.
Its revenue for the year was $961 million, profit after tax was $227 million and total assets was $7.2 billion.
Changi Airport only worth $3.3b?
According to the report, “the estimated consideration payable to CAAS for the transfer of airport undertaking and other assets is $3,277,987,000.” Also, _the consideration will be funded via “a capital injection by the immediate holding entity, the Minister for Finance (Incorporated).”
Does it mean that the Minister of Finance only paid $3.3 billion for the ‘World’s Most Awarded Airport’ with total assets of $7.2 billion, revenue of $961 million and profit after tax of $227 million?
So, now that it has been transferred to Temasek, to what extent will it boost Temasek’s annualised returns in the future, considering that the sum paid was arguably, grossly under-valued?
Do State assets increase portfolio returns?
In this connection, to what extent has the 1990′s corporatisation and transfer of state entities like SingPower and PSA, and the biggest single-year jncrease in its portfolio value with the listing of SingTel in 1993, contributed to its phenomenal 17 per cent annualised returns from Temasek’s inception?
Who benefits from the transaction when a state entity is corporatised? If an entity is sold, what is the price? How do Singaporeans benefit?
It may seem quite odd to debate and approve in Parliament the sale of a strategic state asset, like Chang Airport, when the price was still not known.
By the way who owns the 1,300 hectares of land that Changi Airport sits on?
And what is the valuation of this land?
How much does CAG pay for the use of this land?
Support TOC! Buy Leong Sze Hian’s book_here!
--
Be part of the community! Join our Facebook Page!

For many in the local financial community this has been an open secret. The
tragedy is that the local financial journalists never highlighted this nor questioned how the historical double digit returns reported by Temasek came about. The recently hired top dollar staff have no right to claim credit for book transfer returns for which they have not shed one iota of energy or skill ....they should only be evaluated by the value add ( if any ) to the portfolio arising from active investment decisions that they have initiated.

 

[kampongboy]

How much was her profiting sharing$ from these 'open secret"?

 

[streetsmart73]

For many in the local financial community this has been an open secret. The
tragedy is that the local financial journalists never highlighted this nor questioned how the historical double digit returns reported by Temasek came about. The recently hired top dollar staff have no right to claim credit for book transfer returns for which they have not shed one iota of energy or skill ....they should only be evaluated by the value add ( if any ) to the portfolio arising from active investment decisions that they have initiated.

hi there


1. such sheep will never slap the hands that feed them, right!
2. asset transfer from left pocket to right pocket making it looking good and positive.

 

[Windsor]

Knew all along that the "business acumen" of Temasek were never gains from local or overseas ventures. Profits were made by trading off Singapore's assets to hiving them off at enormous profits some years later. Our good President has done immeasurable work but were they done for the good of Singaporeans or for those profiteers?

 

[Forvendet]

LSH is no financial whiz kid. He's just a stats geek. His talks always drag audiences through unfathomable charts and tables and conclude with questions no layfolk (the vast majority, mind you) understands arising from where. Diie-hard anti-PAP would jump in and agree without the slightest understanding. They'd just quote LSH and cite that his stats and analyses thereof must be right. I can understand that he may be doing this out of goodwill in public spiritedness but really, he's got to change his style of delivery and adapt to the focus of the audience.

 

[Zombie]

I did a quick run through.

http://www.changiairportgroup.com/e...nnection/CAG_AR_0910_Financial_Statements.pdf

I think LSH made a mistake.

Total assets 7.2B included 3.3B amount receivable from ministry of finance...
But LSH omitted netting off the same 3.3B amount payable to CAAS.. ie a back to back payment

Excluding this back to back payment
1) total assets in account = 3.9B (ie 7.2B - 3.3B)
2) total liabilities in account = 0.4B (LSH did not look into this)
3) distributable retained profit not capitalised = 0.2B (ie the 227M)
thus amount in deal = 3.3B (ie above 1-2-3... which is also the amount in share capital plus reserves)

But I am not saying whether it is the fair market value.. that is another issue.