In today’s briefing:
- Chip Eng Seng: Low-Balled MBO At $0.72/Share
- Sea Ltd (SE US) – Wind Back in the Sails
Chip Eng Seng: Low-Balled MBO At $0.72/Share
- Conglomerate Chip Eng Seng Corp (CHIP SP) (CES) has announced a voluntary Offer of S$0.72/share from a Tang family-owned entity. The price is a 1.4% premium to last close.
- The Tang’s hold 38.23% and the Offer is conditional on a 50% acceptance condition.
- The Offer price is a 27.3% discount to CES’ NAV as of 30 June 2022 – no such mention in the announcement. The Offer price has not been declared final.
Sea Ltd (SE US) – Wind Back in the Sails
- Sea Ltd 3Q2022 results should be seen as the poster child for the rest of the space given a crystal clear focus on profitability and pragmatic approach to future growth.
- The fact that the company is now contribution margin positive in ASEAN and even Adjusted EBITDA positive in Malaysia and Taiwan is a testament to its success in controlling costs.
- Sea Ltd (SE US) has seen a significant compression in valuations and now looks attractive on 2.1x FY2023V EV/Sales and 1.7x FY2024E EV/Sales.
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