Friday, March 21, 2014
Sino Grandness: UOB Kay Hian maintains Buy with $1.06 TP. The house notes that following its key Takeaways from its Taiwan Asean Conference, Garden Fresh’s listing remains on track. 1st-tier investment bankers and auditors started the IPO process in Nov 13 and expect the listing process to be completed by October, which is the maturity date of the first Rmb100m CBs issued in 2011. Investors are now concerned about the contingency plans in case of delays in the IPO process, the use of proceeds to boost Garden Fresh’s growth and expansion plans in Sino Grandness beyond the spin-off. Although the due diligence process may take longer than expected, the company believes it will be a greater testament to Garden Fresh new investors should the IPO be successful, and may even get a higher valuation post listing. The worst-case scenario is the listing gets delayed beyond Oct 14 due to unforeseen circumstance; the first CB will have the option to extend the redemption for another 8 months to Jun 15.