Thursday, July 29, 2010

The Delisting Of Measat Global at RM 4.20: Part II

Posted last night: The Delisting Of Measat Global at RM 4.20

Let's compare Measat Global in 2003 and now. :D

Here's a copy of Measat Global when it was relisted back in December 2003.

Measat Global Relisting Notes 2003: Surf88
Surf 88 (a local investment advisory company back then - which no longer exist) gave a forecast earnings of 12.9 million for Measat's fy 2003 and a earnings of 39.4 million for its fy 2004. ( See page 3)

Remember it's just a forecast. It could be wrong. :D

Here'e the forecast numbers again for easier reference.

Look at the two arrows at the bottom of the table.

Measat at a price of 4.65 was trading at 140x earnings multiple (PE) and if Measat's earnings triples from 12.9 to 39.4 million, Measat at 4.65 would be trading with an earnings multiple (PE) of 46x!!!

Yeah... holy cow!

Life is good.

Wasn't it nice that during the relisting process, as stated in the news article attach to the posting The Delisting Of Measat Global at RM 4.20

  • Controlling shareholder Measat Global Network Systems Sdn Bhd (MGNS), which in turn is controlled by tycoon T. Ananda Krishnan, had placed out the shares. The buyers were fund managers who forked out RM4.25 per share.

And how did Measat fared: Quarterly rpt on consolidated results for the financial period ended 31/12/2003: Loss 1.806 million. (hmmm.. no wonder shares literally died after relisting - see chart here )

A year later: Quarterly rpt on consolidated results for the financial period ended 31/12/2004 - Measat made only 14 million! ( No wonder the share continued to plunge yes!!! ) (LOL! Looks like Surf 88 numbers were way off the mark!)

Now I wouldn't use that earnings as a point of reference because Measat just was relisted., hence I think the following year's Q4 earnings would be a much better point of reference.

Here's Measat Global's balance sheet as at 31/12/2004.

Well, I would use this as my point of reference - Measat Global was sold to fund managers back in 2003 at a price of 4.25.

April 2005.

  • New satellite to boost Measat profit

    April 14 2005

    MEASAT Global Bhd’s third satellite, Measat-3, is expected to provide major earnings growth to the company from financial year 2006 onwards.

    K and N Kenanga in its research note said the new satellite, set to be launched in the third quarter of 2005, will bring different dimensions to Measat’s earnings profile by covering about 110 countries and 70 per cent of the world population.

    The research house maintains its “hold” call on the company.

    It forecasts Measat’s revenue for the period ending December 31 this year to be RM186.1 million and net profit to be RM25.1 million. The company recorded a revenue of RM129.6 and profit of RM14 million in 2004.

    The satellite will expand Measat’s current market from East Asia to include South Asia, West Asia, East Africa and the Asia-Pacific region.

    Measat-3 is said to double the current transponder capacities of both Measat-1 and Measat-2.

    This enables the company to extend its customer base to key international broadcasters such as BBC and to meet the clients’ increasing requirements for DTH (direct-to-home), broadband, remote connectivity and multimedia services.

    The research house believed one of the reasons for the underperformance of Measat’s share price in the past one year was due to the delay in the launch of Measat-3.

    The satellite was supposed to start operating by the second quarter of this year.

    K and N Kenanga, however, expects the share price to be re-rated in the longer term given the successful launching of the new satellite.

    Measat is also currently working towards securing more broadcasting customers with the launch of its Teleport and Broadcast Centre in Cyberjaya this month.

    The research house valued Measat based on a discounted cash flow (DCF) basis to factor in the long-term nature of its business.

    “Based on DCF, we peg current value of Measat at RM4.42,” it said.

    Measat is also currently finalising the negotiations for Measat-4 and is expected to conclude the agreement by 2005. This satellite will be co-located with Measat-3 to provide additional capacity and in-orbit satellite redundancy, required by key customers.

K&N Kenanga Research then forecast a net earnings of 25 million for Measat for its fiscal 2005.


Ooops! I laughed. I guess you can also guess that Measat did shitty that year too!

Sure it did.

It made only 14.799 million. Quarterly rpt on consolidated results for the financial period ended 31/12/2005

Let's think about it..... :P

Let's say we think about what's happening from Telekom's Malaysia perspective.

From the article posted on yesterdays blog posting: The Delisting Of Measat Global at RM 4.20 ...

  • Then, on Thursday, Telekom Malaysia Bhd said it had paid MGNS RM250 million cash (RM4.165 per share) for a 15 per cent strategic stake in Measat Global.

The past two fiscal years, Measat Global was only making an eps of 3.60-3.80.

And Telekom Malaysia was sold Measat Global shares during its relisting at a price of 4.165!


I am so sorry but how could I really not laugh?

From an PE earnings valuation, that meant Telekom Malaysia bought Measat shares at an earnings multiple (PE) of 109x!!!

And here is the chart of Measat again...

Yup... Measat even hit a low of 0.905 on 16 March 2009.

Now if one had bought after then.. naturally Measat Global is the best stock ever in the whole orbit. Even no Moo Moo Cow's can jump into the orbit like how Measat did.

And Measat's earnings... it did recover very nicely.

No wonder the share price flew also.

Here's Measat last reported earnings in May 2010: Quarterly rpt on consolidated results for the financial period ended 31/3/2010

Measat only made some 49.792 million for the current quarter!!!!!!!


Now we can do some simple comparison.

When Measat was listed... at best it ONLY made some 14 million. Measat this quarter alone (YES ONE QUARTER) already made some 49.792 million million.


Back in December 2003, in its relisting, Measat Global was sold at 4.25.

Measat today? It wants to delisted at 4.20!!!

Make any sense at all?

In 2003... hardly any earnings. EPS for fy 2004 was only 3.6 sen. Sold at PE multiples of over 100.

Now? Measat Global's fiscal 2010 Q1 eps is already 12.7 sen!!!!

Now it would be a terrible insult to me and my fingers if I have to answer if this privatisation is fair or an insane rip off!

I did not know they had pirates in the orbit!!!!!

Apparently I am so wrong!


madgxx said...

Measat shares jumped RM0.31 on Tues from 3.49 to 3.80 with very high volume before announcement of suspension on Wed. These people really have very powerful octopus which can pick Measat shares to shoot up even before any announcement.
Can somebody tell me where I can buy one of these octopus

Moolah said...

I also want. :P

Tony said...

I think Telekom should not accept the offer and stay put as a minority. I think Measat is slated for big things by AK and its profits will improve greatly. AK has India and its 1 plus billion population in his sight.

Moolah said...

Tony: Good Points.

I for one do not believe that any sane corporation would embark on a corporate exercise which won't benefit itself.

And in the corporate world... monetary benefits is usually a great motivation.

And yes... needless to say... clearly the privatisation would benefit the owners. That's my flawed opinion.

And I would like to repeat again...

when Measat was relisted in 2003.. for the first two years... there was no profits at all.

Now? Recently Measat is making GOOD money. And what does the owner want to do? Take it private.


History repeats itself yet again.