Yoma Strategic Holdings (Yoma) reported that it would take a 70% stake in Chindwin Holdings which would acquire several connected tourism assets. First, Chindwin would acquire 75% of a balloon tour company “Balloons over Bagan (BOB)” for US$10.7m. BOB is the only hot air balloon operator in Myanmar and has had a profitable track record since it began operations 13 years ago. We understand that this acquisition price translates to a forward PE multiple of 6 to 8 times. In addition, Chindwin would acquire a 75% stake in 21.2 acres of land in Bagan for US$3.75m. This acquisition is conditional on the present owner converting the existing land-rights to allow for the construction and operation of a hotel business. Overall we see these acquisitions to be positive and allows Yoma to capitalize on the burgeoning demand for luxury tourism in Myanmar. While we believe the company holds meaningful franchise value as a leading developer in Myanmar, most positives are likely priced in at current prices. Maintain SELL with a 12-month fair value estimate of S$0.71 (20% premium to RNAV).
Proposed acquisition of balloon services company
Yoma reported that it would take a 70% stake in Chindwin Holdings which would acquire several connected tourism assets. First, Chindwin would acquire 75% of a balloon tour company “Balloons over Bagan” for US$10.7m. The company is the only hot air balloon operator in Myanmar and has had a profitable track record since it began operations 13 years ago. We understand that the acquisition price translates to a forward PE multiple of 6 to 8 times.
Additional 21.2 acres of land in Bagan
In addition, Chindwin would also acquire a 75% stake in 21.2 acres of land in Bagan for US$3.75m. This acquisition is conditional on the present owner converting the existing land-rights to allow for the construction and operation of a hotel business. The site is 5km away from the archeology site of ancient Bagan and offers panoramic views of the Irrawady river and the Yoma mountain range in the background. The group intends to develop a luxury boutique resort hotel on this site. Finally, the JV would also acquire 75% of Eastern Safaris – a company offering adventure tours - for US$0.1m. Overall we see these acquisitions to be positive and allow Yoma to capitalize on the burgeoning demand for luxury tourism in Myanmar.
Rights issue for acquisition of central Yangon site delayed
Yoma also recently updated that its proposed 80% acquisition of a central Yangon site would be delayed, as the company is in still in discussion with authorities regarding the new leasehold title of the site. However, Yoma indicated that verbal assurances have been given that a new lease in accordance with the current Foreign Investment Law would likely be granted, and it is confident that a Master Lease would be issued before 30 June 2013.
Maintain SELL
We believe the company holds meaningful franchise value as a leading developer in Myanmar but see most positives to be priced in at current levels. Maintain SELL with a 12-month fair value estimate of S$0.71 (20% premium to RNAV).
Yoma reported that it would take a 70% stake in Chindwin Holdings which would acquire several connected tourism assets. First, Chindwin would acquire 75% of a balloon tour company “Balloons over Bagan” for US$10.7m. The company is the only hot air balloon operator in Myanmar and has had a profitable track record since it began operations 13 years ago. We understand that the acquisition price translates to a forward PE multiple of 6 to 8 times.
Additional 21.2 acres of land in Bagan
In addition, Chindwin would also acquire a 75% stake in 21.2 acres of land in Bagan for US$3.75m. This acquisition is conditional on the present owner converting the existing land-rights to allow for the construction and operation of a hotel business. The site is 5km away from the archeology site of ancient Bagan and offers panoramic views of the Irrawady river and the Yoma mountain range in the background. The group intends to develop a luxury boutique resort hotel on this site. Finally, the JV would also acquire 75% of Eastern Safaris – a company offering adventure tours - for US$0.1m. Overall we see these acquisitions to be positive and allow Yoma to capitalize on the burgeoning demand for luxury tourism in Myanmar.
Rights issue for acquisition of central Yangon site delayed
Yoma also recently updated that its proposed 80% acquisition of a central Yangon site would be delayed, as the company is in still in discussion with authorities regarding the new leasehold title of the site. However, Yoma indicated that verbal assurances have been given that a new lease in accordance with the current Foreign Investment Law would likely be granted, and it is confident that a Master Lease would be issued before 30 June 2013.
Maintain SELL
We believe the company holds meaningful franchise value as a leading developer in Myanmar but see most positives to be priced in at current levels. Maintain SELL with a 12-month fair value estimate of S$0.71 (20% premium to RNAV).
No comments:
Post a Comment