Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In <a href="https://skr.ma/VTtJQ" target="_blank" rel="noopener">Pentamaster Corp: In The (EV) Driver's Seat</a> in February last year, I discussed <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a>'s supply of semiconductors testers to the electric vehicle business.</li>
<li>A quirk of PENT was that its pseudo dual-listed twin - <a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a> - trades at a significant discount.</li>
<li>In a not altogether surprising move, PENT is now seeking to take PI private by way of a Scheme at HK$1.00/share, including a HK$0.07/share dividend.</li>
</ul>


In Pentamaster Corp: In The (EV) Driver's Seat in February last year, I discussed Pentamaster Corp (PENT MK)'s supply of semiconductors testers to the electric vehicle business.
A quirk of PENT was that its pseudo dual-listed twin - Pentamaster International (1665 HK) - trades at a significant discount.
In a not altogether surprising move, PENT is now seeking to take PI private by way of a Scheme at HK$1.00/share, including a HK$0.07/share dividend.


Pentamaster is finally seeking to delist its pseudo twin. If small illiquid arbs are your bent, and if payment on or around late April 2025, pay up to HK$0.95/share for a 5%/15% gross/annual

Pentmaster (1665 HK): Malaysian Parent's Offer For Pseudo Dual-Listing

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a> disclosed a Cayman scheme privatisation offer from <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price. </li>
<li>The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.</li>
<li>An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.</li>
</ul>



Pentamaster International (1665 HK) disclosed a Cayman scheme privatisation offer from Pentamaster Corp (PENT MK) and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price. 
The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.
An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.


The risk/reward is unattractive. An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

<a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a> is a Malaysian company spun-out of Pentamaster Corporation and listed in Hong Kong in January 2018. It sells automated test equipment and factory automation solutions.Due to the adoption of 3D sensors within smartphones, it is seeing a strong increase in sales with its revenue growing by 45% per annum from 2014 to 2019. 3D sensing is at the early adoption stage and should grow rapidly over the next five years. Pentamaster has a strong relationship with its customers, creating customized products with customers often more than one year ahead of the final sale. The company continues to expand its product offering to diversify across sectors and throughout the value chain.Pentamaster has a healthy financial position with net cash equal position. It is also very profitable with a five-year average return on invested capital of 65.7%. Due to minimal investment requirements, ROIC increased from 16% in 2015 to 132% in 2019. There are no corporate governance concerns.Despite Pentamaster’s quality and growth, there is 98% upside to base-case 2025 fair value per share of HKD3.33. The pandemic has caused production and installation delays causing the sales in the first nine months to fall by 15%. The company believes its long-term growth outlook is only temporarily impacted by the pandemic.The combination of growth and valuation makes Pentamaster International an attractive investment opportunity. Pentamaster International is preferred over <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> due to its valuation. Pentamaster International trades at 13 times 2019 earnings, while Pentamaster Corporation trades at 42 times 2019 earnings. Because of its recent listing, Pentamaster International is not as well known by investors in Hong Kong. There is also the cross-border listing, which typically leads to a discount.

Pentamaster International (1665 HK) is a Malaysian company spun-out of Pentamaster Corporation and listed in Hong Kong in January 2018. It sells automated test equipment and factory automation solutions.Due to the adoption of 3D sensors within smartphones, it is seeing a strong increase in sales with its revenue growing by 45% per annum from 2014 to 2019. 3D sensing is at the early adoption stage and should grow rapidly over the next five years. Pentamaster has a strong relationship with its customers, creating customized products with customers often more than one year ahead of the final sale. The company continues to expand its product offering to diversify across sectors and throughout the value chain.Pentamaster has a healthy financial position with net cash equal position. It is also very profitable with a five-year average return on invested capital of 65.7%. Due to minimal investment requirements, ROIC increased from 16% in 2015 to 132% in 2019. There are no corporate governance concerns.Despite Pentamaster’s quality and growth, there is 98% upside to base-case 2025 fair value per share of HKD3.33. The pandemic has caused production and installation delays causing the sales in the first nine months to fall by 15%. The company believes its long-term growth outlook is only temporarily impacted by the pandemic.The combination of growth and valuation makes Pentamaster International an attractive investment opportunity. Pentamaster International is preferred over Pentamaster Corp (PENT MK) due to its valuation. Pentamaster International trades at 13 times 2019 earnings, while Pentamaster Corporation trades at 42 times 2019 earnings. Because of its recent listing, Pentamaster International is not as well known by investors in Hong Kong. There is also the cross-border listing, which typically leads to a discount.

Pentamaster International (1665:HK): An Undervalued Beneficiary of Long Term Growth Trends

United States

TreeHouse Foods, Inc. is a food manufacturer servicing primarily the retail grocery and foodservice distribution channels. The Company's products include non-dairy powdered coffee creamer; canned soups, salad dressings and sauces; salsa and Mexican sauces; jams and pie fillings, pickles, and related products.

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Treehouse Foods (THS US)

Pentmaster (1665 HK): Malaysian Parent's Offer For Pseudo Dual-Listing

Pentamaster is finally seeking to delist its pseudo twin. If small illiquid arbs are your bent, and if payment on or around late April 2025, pay up...

David Blennerhassett

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

The risk/reward is unattractive. An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies...

Arun George

Pentamaster International (1665:HK): An Undervalued Beneficiary of Long Term Growth Trends

Despite trading at a PE of 13, Pentamaster International is a beneficiary of the 3D sensor market. It parent and near-identical asset, Pentamaster...

Reperio Capital

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