Ban Leong Tech

[BlueKelah]

Ban Leong Technologies has reported earnings of $7.2 million for the FY2020/2021 ended March, 160.5% – or 2.6 times – higher than earnings of $2.8 million in the year before.
The higher earnings were attributable to higher revenue, gross profit, as well as other operating income during the year.

6.17 EPS and 2.5 dividends, seems they are doing very well during the pandemic period.

Yes they seem to have a blowout year with increased sales in gaming accessories and stuff used for WFH shift. Has a good net cash position now on the back of that.... 

Question is how much top line will be affected going forward as SG opens up and people return to offices etc.. Company seems to be doing constant SBB. Looks like probably more to rewards management later rather than be cancelled.

[Big Toe]

I have been following Ban Leong for a very long time. Held and Exited the position long ago, pre pandemic. It is a decent business but not a great business. Still have some odd lot shares remaining. The pandemic changed everything, well, at least for the past 2+ years. Ban Leong, the luxury watch retailers, and a few other companies benefitted greatly for being at the right place at the right time.

Persoanlly I know of a small business owner who went from just getting by to extraordinary profit, enough for comfortable retirement. But these businesses are the minority.

Moving foward, some businesses that did extremelely well during the pandemic period will revert to normal. Examples are Sheng Siong and probably Ban Leong as well. Some will experience a harsh winter and a sales drought. And there are those which is unknown, Hour Glass / Cortina. I really cant say with a level of certainty how business will be going forward. Too difficult to call. What I do know is valaution are on the elevated side of things for the watch retailers.

[BlueKelah]

I have been following Ban Leong for a very long time. Held and Exited the position long ago, pre pandemic. It is a decent business but not a great business. Still have some odd lot shares remaining. The pandemic changed everything, well, at least for the past 2+ years. Ban Leong, the luxury watch retailers, and a few other companies benefitted greatly for being at the right place at the right time.   

Persoanlly I know of a small business owner who went from just getting by to extraordinary profit, enough for comfortable retirement. But these businesses are the minority.

Moving foward, some businesses that did extremelely well during the pandemic period will revert to normal. Examples are Sheng Siong and probably Ban Leong as well. Some will experience a harsh winter and a sales drought. And there are those which is unknown, Hour Glass / Cortina. I really cant say with a level of certainty how business will be going forward. Too difficult to call. What I do know is valaution are on the elevated side of things for the watch retailers.

Thanks for input, yes its hard to call as more people now may be premanently WFH, hence demand for ban leong products could have a new elevated baseline, new normal. Though i dont see the business really growing that much from here on out.

Watch retailers are now enjoying a boom becoz of the shift in investment appetite and inflation, as well as a certain level of speculation and buzz in the sector. IN china particularly its a trend now to sell houses and dump the money into luxury goods like watches. The big wall of excess Covid stimulus money still sloshing around a bit.

[weijian]

The offer price is ~43% above its Ban Leong's NAV (ending Sept2024). As a distributor, the majority of its tangible value is its working capital. In this case, the working capital is mainly the inventories of IT/multimedia products and so there isn't much hidden value. Ban Leong distributes mainly to businesses that retail or uses it themselves in the ratio of ~3:1. Therefore, there is intangible value in the business relationships/customer lists. Ban Leong itself has a high single digit to low double digit ROE and so some of this "intangible stuff" is probably helping to drive the earnings a little bit.

My guess is that if this had been a MBO, an offer price at 1.4x NAV will never appear. The offerer, GCH Global Holdings, flush with some cash post SPAC combination just a few months old, is more than happy to buy some earnings since itself is loss making.

VOLUNTARY CONDITIONAL CASH OFFER by EPICSOFT ASIA PTE. LTD

The consideration for each Offer Share is S$0.6029, payable in cash (the “Offer Price”). The Offer Price is final and the Offeror does not intend to increase the Offer Price, save that the Offeror reserves the right to revise the terms of the Offer in accordance with the Code if a competitive situation arises.

GCL Global Pte. Ltd. (“GGPL”) is a private limited company incorporated under the laws of Singapore on 26 July 2021. Its main business is that of a holding company. GGPL is a whollyowned subsidiary of GCL Global Limited (“GGL”), a company incorporated in the Cayman Islands. GGL is, in turn, a wholly-owned subsidiary of GCL Global Holdings Ltd., a company which is listed on NASDAQ.

https://links.sgx.com/FileOpen/Epicsoft%...eID=844085

[Big Toe]

Sold all my remaining lots @ $0.59. Bearing in mind I held these shares for well over a decade.
I lost track of the dividends collected and probably just under $0.30/share.

For these remaining shares
Cost of my purchase was ard $0.24.
Cash proceeds from sale + Dividends just under $0.90

A nice surprise, a pity I sold off most of it much much earlier. But no one would have known someone would be interested to buy over.
No fish, prawn also good.

[weijian]

ASIAN CORPORATE ADVISORS (ACA) is the same IFA used by Ossia International's MBO.

For Ossia's case, it was a MBO (mgt buy out) and so with no control premium, first quartile was used to derive the range of values. For Ban Leong Tech, the mgt is selling out and a control premium has been applied. Probably thanks to the control premium, the range of values fall within 1.1 - 1.2x of NAV, which is a premium to book. To their credit, the IFA ACA has been consistent. Arguably, their job has also made simpler with this "very fair" offer price.

So, it does seem that having a clean exit by Mgt with the OPMI positioned together with them in the same structure, will mostly have the best profit potential. However in a MBO, Mgt (and mostly is also the SSH) and the OPMI are on opposing sides. Since it is an uneven playing field, the OPMI is at a disadvantage all the time. In recent times of privatization galore, I probably can count with all the fingers on my hand on those where Mgt/SSH has treated the OPMI fairly (GK Goh and Second Chance Properties been two of them). So it takes another level of understanding on the decision maker/s to have faith that OPMIs will be "treated fairly".

APPENDIX I – LETTER FROM ASIAN CORPORATE ADVISORS PTE. LTD. IN RESPECT OF THE OFFER

In the derivation of the Estimated Value of the Shares, we have used the Group’s earnings after tax attributable to the owners of the Company, and revenue for FY2025, and applied the median of LTM PER, and LTM P/Revenue multiples for the Selected Comparable Companies and a control premium (after considering the aggregate shareholding of the Offeror and its Concert Parties as well as the Undertaking Shareholders and taking the simple average for the premia above the relevant market prices

The range of Estimated Values per Share based on the methods above are between approximately S$0.4920 to S$0.5314 per Share. Accordingly, the Offer Price is higher than the range of the Estimated Values per Share.

It should be noted that the range of Estimated Values per Share implies P/NAV multiple of between 1.1 times to 1.2 times, and these are within the range of the Selected Comparable Companies but slightly lower than implied P/NAV for privatisation of Challenger

https://links.sgx.com/FileOpen/250603%20...eID=847966