Sino Grandness

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Obviously, market value is not the same as agreed valuation of RMB 1,500m.

Bondholders want their investments in Garden Fresh to have a higher value. They will leave it to underwriters to determine the market value of Garden Fresh for listing.

Their desire for higher valuation was made clear in the bond agreements: They will redeem their bonds if the price-earnings ratio is less than 9 (see pg 88 and 91 of annual report)

The agreed valuation of RMB 1,500m is around 4 times 2014 profit of RMB 344.9m. The bondholders will abandon Garden Fresh if IPO is launched on the agreed valuation of RMB 1,500m.

Hi portuser,
 
“9 Times Valuation” means the product of 9 multiplied by the Reference Net Profit.
 
9 x “unadjusted net profit” = 9 x 117.3 = RMB 1055.7 m
9 x “adjusted net profit” as per your number = 9 x 344.9 = RMB 3,104 m.
 
I am still not convinced on the issue of “adjusted net profit”, but assuming that the underwriter is willing to underwrite at RMB 3,104 m
 
ðMV (100% Listco) = RMB 3,104 m, to which both bond issuer and bondholders agreed.
 
My question is, would the “agreed valuation” of RMB 3,104 m then become a factor or an input in determining the Aggregate Conversion Proportion of CB1 and CB2 ?
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