SMB United -- takeover bid by Boer

[xlandjy]

Boer has unveiled plan to take over SMB. The following from its offer document is noteworthy:
"According to the PRC’s “Twelfth Five-year Plan”, smart grid has been designated to be a key area of development in the new energy industry in the PRC and the PRC aims to establish a strong smart grid network by 2015. The Company noticed a similar trend worldwide as many developed countries, such as members of the European Union, the United States and Japan, are also making considerable investments in smart grid technology to establish full coverage of the smart grid network in those countries. The Directors believe that smart grid network will become the development trend in the electricity market both domestically and internationally. While continuing to focus on the development of the domestic market in the PRC, which the Directors believe will continue to drive the greater part of the future growth of the Company’s business, the Company also intends to identify potential acquisition opportunities that can also increase its global market presence, its product offerings and enhance overall competitiveness."

EDMI's smart metering system is well recognised by now, after establishing itself in New Zealand. With a long presence in the United Kingdom, the company is likely to have a reasonable market share when smart metering is rolled out in that country to meet the 2020 deadline.
The offer price of 32c valuing SMB at $160m is low.
EDMI made $9.7m last year on $98m sales. These figures are set to grow as more countries embrace smart metering to achieve energy efficiency.
If EDMI turns in $12m on $120m sales this year, ten-time profit will translate into a value of $120m. If the potential of high growth justifies a higher multiple of say 15, the value of EDMI is $180m, exceeding the $160m assigned by Boer for the entire SMB Group.
The smart grid network referred to by Boer encompasses smart metering system. It is not known whether EDMI's capability extends to smart grid. Has Boer gathered that EDMI has made sufficient progress in this new field?

The control shareholder is the LEE FAMILY. SMB offered shareholders of EDMI at 0.36.5 a share to take it private under SMB. Now a HK Co is offering only 32 cents a share to take SMB (including EDMI) private. A real bargain.