Notwithstanding the 7.4% drop in STI since 3 May, China Animal has notched an impressive gain of 9.3% over the same period. Based on chart, CAL seems to be in the midst of forming a bottom pattern. Do view http://ernestlim15.blogspot.com/2012/05/some-stocks-to-watch-out-as-market.html for more details.

It's kind of odd -- my contact said her CAH shares have been borrowed through Shares Borrowing & Lending scheme by someone who could be a shortist. What's going through his mind? Short CAH? Why?

How much the offer to exit? I doubt it would be more than 33 cents.

I doubt it would be less than 26 cents.

Anyone wants to venture a guess?

On Monday May 7, China Animal slipped to close at 21.5 cents, one of the lowest points for a long time. Since then, it has been creeping up. I see it is now up --- at 24 cents. It's swimming upstream when the market is going down, so I will be v surprised if the long-awaited delisting announcement is not made soon. Just a simple guess.

KEVIN SCULLY SAYS:


I know many investors are waiting and looking toward a delisting or exit offer.  I dont know whether this will happen nor what price the offer if made will be at......I view such an event as a bonus to help the shares realise their fundamental value.  The good news is that the SGX has approved such an action subject to certain conditions.......let's wait and see if that happens  !!??

From what I hear, at the AGM the management indicated that it is still working on a plan to delist from SGX. No time frame given. If it happens soon, I wouldn't be surprised. The market price action for the past couple of months, however, seems to suggest that it won't be so soon. The stock is stuck 

Does CAH really, seriously, massively desire to quit Singapore market? It's been six months since they announced on SGX website that they were evaluating a potential delisting from SGX. Six months liao --- still no update. My guru friend said that the exit offer has to be good otherwise it will fail. The difference in the voting system for this case is that the controlling shareholdrs & the directors cannot vote on the delisting proposal. The minorities really have to decide -- and of course, it's all about the exit offer price. I think anything less than 35 cents is almost sure to fail.

You caught me there Joes but let me try to flesh out my theory... I did a quick think and are there any sources saying that the major shareholder paring its stake is Fidelity?

Fidelity (if it is indeed Fidelity) could be selling down to re-balance its portfolio. Alternatively, it could be paring its exposure to the stock ahead of its full year report or that it knows something that we do not. This is a strong signal.

As for BlackRock, you are right that the conversion price is a minimum of 28.8 cents. They are unlikely the group of people selling down. I guess for discussion and shareholder benefit, can anyone state the group that has put out the large sell queues?

I am vested (very small time) and hence am watching developments ahead of its full year results.

Coverup, can you explain your theory?
So far, I know 28.8 cents is the minimum subscription price for BlackRock, so it's no point for them or anyone to suppress the price. BlackRock would rather the stock price be much higher so it can subscribe at 28.8 and then sell for a profit.

It is relevant to note that BlackRock also had bought placement shares when it issued US$40 m of convertible bonds to CAH. BlackRock got no luck in that it paid 35 cent a share for the new CAH shares. Total S$7 m. BlackRock can easily get all these shares at 23-26 cents in the last six months. Too bad....

Price is artificially pressed down & kept at 25-26 cents range, so the offer price need not too expensive for the management/SS???? Is this the game?

Why does fidelity keep paring down their stakes?

Apart from being a quality business, China Animal is a buy if you are pretty sure that it would be delisted via an offer price that is much higher than current 25 cents. Under widespread market speculation, the management has openly said it would like to delist. The caveat is, there is no guarantee. I think that 's good enough reason for me to buy some shares ...... spare money .... and even if the delist doesnt happen, CAH is a quality biz, as I have said, with top notch investors. So I am going for the ride. If you missed what management said in announcement to SGX, here it is:

“By way of clarification, the Company wishes to inform shareholders that, as part of its constant evaluation of corporate options which may be beneficial to the Company, the Company is currently contemplating and assessing a potential delisting from the SGX-ST whilst continuing to maintain its primary listing on the SEHK.

The Company would emphasize that:
(a) this announcement is made to clarify speculation which the Company considers could otherwise undesirably affect the orderly trading of the Company's shares to the detriment of its shareholders. The  Company would, given a choice, have preferred to make this announcement only after the Company had  considered and assessed all relevant factors (including consultations with all relevant governmental authorities and regulations) and determined to proceed with a definitive proposal (which it currently has not)."

gangho: u r using last year's EPS, so u get 17X PE. The current year -- in first 9 months the EPS already was 10.8 rmb cents. Annualised, the EPS becomes 14.4 rmb cents, which is about 9X PE if you buy the stock today at 25 cents.

Kim Eng has worked it out, u can see their PE is 7.6 assuming you buy shares at 22.5 cents.
Kim Eng's privatisation list

Friday's price action looked like a fake breakout / bbs rolling to me. pump up the price, attract momentum traders and unload to them for a profit.  the buying Q disappeared once they finished selling or traders stopped bidding up the stock.  Support around 25c.

After 2 weeks of consolidation (and a bad market), China Animal has firmed up. I think it has a chance to rise to 30 cents again. Worth re-reading DBS Vickers' report:
CAH delisting offer to be 'attractive'

China Animal Healthcare is on the list of Kim Eng 's speculation of privatisation plays. U can see the reason given by Kim Eng in the report : Kim Eng's privatisation list; CHINA MINZHONG is deep value; UTD ENVIROTECH is a buy

relaxing, well, you are right in a sense that CAH is not so cheap like at 5X PE. However, u should also see that it has rock-solid investors like Blackstone & Goldman  which reflect well on its corp governnace and its business potential. In addition, CAH delisting offer (if and when it comes) will have a fantastic upside fr current price of 28.5 cents because SGX's "no objection" to CAL's potential delisting is subject to controlling shareholders abstaining from voting at the EGM.

This means that it will be more difficult to achieve the "75% present and voting in favour of the delisting" criteria at the EGM without controlling shareholders' vote (promoters have approximately 53%).

The exit offer price needs to be attractive to win over the independent shareholders in order to fulfill the "75% voting in favour" threshold. Also the EGM must fulfill the criteria of not more than “10% voting against” the delisting.

Last 2 pars are from DBS Vickers' report: CAH delisting offer to be 'attractive',

Hate to be a party pooper, but I tend to agree with MacGyver. The PE is 10X at 29 cts, so how can this be cheap for a small cap S-Chip at a time like this?  Besides,  don't think they have the money to make an exit offer from SGX , so don't hold your breathe.  CAH or SGX should clarify the necessary requirements for SGX delisting so that investors are better informed. 

MacGyver, I disagree with your view. In the first place, CAH was 'forced' to make the announcement to SGX after Straits Times ran an article on speculation of a delisting.
CAH has been under pressure too from investors and others who have been calling CAH to inquire. I would say CAH knew it was in good corporate governance spirit to make an announcement. I believe the CAH bosses are pissed that the stock is so under-appreciated in Singapore. Reminds me of Time Watch -- they die die wanted to get out of SG listing and they did!

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_7711D82EAAA9AA6E4825792D0045F391/$file/CAH_GenericAnnouncement_SpecificVersion_18Oct11.pdf?openelement

This whole saga seems like a joke to me.

My logic tells me that NO smart management would show their trump card so early before the real action. It seems that the management is just trying to pacify some existing shareholders.

Shareholders of this Company, be prepared to be disappointed.

30.5 cents now!!!

This stock is one of a kind – forced to advertise (loudly) its delisting intention…. The market not stupid, now buying the stock cos it is truly undervalued and the offer price has to be above 35 cents. imho

Window Chan, you know why, right? The market suddenly focused again on the delisting that is likely , very likely, to happen. Some more, DBS V highlighted it today, as you can see in this report: CAH delisting offer to be 'attractive',

Broke resistance of 0.28 with good vol.

Hi Viviene,

Just my 2 cents worth and guesstimate here:

If there is a delisting, CAL may give a delisting offer price and an option to convert Singapore shares to HK shares in the event that shareholders do not want to accept the delisting offer price and would still want to keep CAL shares.

Do visit my blog http://www.ernestlim15.blogspot.com/

Have a gd trading week ahead.

3Q results is out. any comment?

This is another quality S-chip. AT 27 ccents now, it's a steal!

Anyone knows how a delisting of China Animal Healthcare will work? Is the same as a privatisation exercise where Big Brother will offer to buy over the shares at a premium to market price? It doesn't sound the same but how else will the minority shareholders be persuaded to sell? Or unless they have to open account in HK and trade shares there?

Not much action today despite a rise in the market. People have forgotten the delisting story?