Tee Land IPO (analysis of TEE international)

I posted my analysis on my thread on HWZ on 26th April and I'll repost it here
http://deluxeforums.hardwarezone.com.sg/stocks-shares-indices-92/milos-ta-discussion-sharing-thread-4064190-141.html#post75803805


TEE plans to spin off TEE land with minimum market CAP of $150M

Currently as at 30th Nov 2012, TEE international has 422.3m shares. This implies a market cap of S$160.5m based on 38c per share.

From 2012 annual report (refer to note on segment reporting), just looking at external sales, we can see that approximately 90% of revenue comes from the engineering arm whereas only 10% comes from the real estate arm (ie TEE land)

Assets wise, TEE land takes up about 79% of assets in TEE international's books.

Using assets to calculate TEE international's potential spinoff value:
Assume TEE land spinsoff with $150m market cap.
Therefore TEE international should be worth = (150m/79%) = $190m market cap
Working back based on 422.3m shares, TEE price should be about 45c! (7c upside)


PS: TEE has hit 44.5c today. I'm vested at different levels and average below 40c. Based on my workings is 45c but I have heard that they might push higher so that there's some "leeway" or "premium" to the price.
TEE international AGM is scheduled for 15th May where the required dilution needs to be approved by shareholders