The “Announcement on the Acquisition of 26.05% of UTStarcom Holdings Corp.†disclosed by Tongding Internet recently stated that it intends to acquire Nasdaq-listed UTS (UT Starcom) 920 for US$49.22 million (approximately RMB 328.9871 million). Ten thousand shares, accounting for 26.05% of the total share capital, after the completion of the transaction, indirectly held 12.7 million shares of the company's shares, holding 35.96%, Tongding Internet will become the largest shareholder of UT Starcom. Fancy in the 5G field technology, the integration of the Internet into the main UT Starcom On the basis of the 10% shareholding of UT Starcom, Tongding Internet has further increased its holdings, mainly to see the technology of the winning company in the 5G field. According to the announcement, UTStarcom is developing a sliced ​​packet network product to provide an effective solution for 4G/5G mobile backhaul, high-capacity traffic aggregation and data center interconnection. UT Starcom was founded in 1991. The once-famous and well-known "Little Smart" is the company's most famous product. With PHS, the company created a market value of about 10 billion US dollars in a short time after its listing on NASDAQ in March 2000. By the end of 2006, the number of domestic PHS users reached 93 million, and overseas PHS users exceeded 7 million. However, due to excessive reliance on PHS single products, after the cost of mobile phones was rapidly reduced and popularized, the PHS market rapidly shrank in a short period of time and eventually disappeared completely. According to Wind data, in the 19 years since UTStarcom was listed, its share price has fallen from a maximum of 280 US dollars per share to a minimum of less than 2 US dollars, a decline of more than 99%. From the performance point of view, it is also very obvious. Operating income fell from 23.6 billion yuan in 2005 to 600 million in 2017, leaving only a fraction of the net profit; from the initial loss in 2005 to the first half of the year, 10 years in 13 years was negative, and the loss was close to 10 billion. Renminbi. According to the acquisition valuation report of Tongding Internet, UTStarcom has a high concentration in the income areas in recent years, mainly from the two markets of Japan and India, of which Japan is the most important market, accounting for sales in the past three years. Amounts of 49%, 52% and 50%, a large part of this is from the customer Softbank (Softbank). At the end of last year, the Japanese government ruled out the communication equipment from China on the grounds of security risks such as information disclosure. Softbank not only abandoned Huawei's 5G related equipment, but also decided to purchase Ericsson and Nokia 4G base station equipment and gradually replace Huawei. In this context, as the largest customer of UTStarcom, once the purchase of Softbank changes, the future impact on performance will be inevitable, and the risk of the acquisition of Tongding Internet will be further exposed. The total consideration for the 9.2 million shares of UTStarcom to be acquired by the company is $49.22 million, and the transaction price per share is $5.35 per share. However, this purchase price does not seem to be obviously expensive, and the pricing basis makes the market somewhat incomprehensible. First, the acquisition of the target as a company listed on the Nasdaq, the stock price should reflect the company's most fair value, but the purchase price of 5.35 US dollars / share does not seem to refer to the market price of UT Starcom, but higher The company that announced the acquisition of the time-marked company has a stock price of 44%/share. Secondly, according to the latest financial data disclosed, as of the end of the third quarter of 2018, the underlying UTStarcom net assets were US$10.63 million, compared with the valuation of US$189.94 million (US$49.22 million, accounting for 26.05%). It is as high as 88%. According to the “Acquisition Valuation Reportâ€, the acquisition plan did not adopt the commonly used basic method and income method, but used the market method to evaluate. The acquisition of the company was selected by Tessco Technologies, Radcom, Lantronix and Clearfield. As a benchmark, similar companies of similar size and listed in the United States evaluate the purchase price from the perspective of enterprise value ratio (EV/EBITDA), and on this basis, from operational capacity, solvency, profitability and development capability. Some "factor corrections" were made to get the valuation of the acquisition. It is worth mentioning that even in accordance with the above market law, the calculated valuation should be US$46.37 million, or US$5.04/share, while the actual purchase price of US$5.35/share is still about 6% higher than the assessment result. For the rationality of the purchase price higher than the above reference prices, Tongding Internet has “increasing the target business scale and profitability, while the underlying stock price is relatively underestimated†and “the transaction volume is low, and the price is controllable through the open market. It is more difficult to purchase a larger number of UTS stocks, and to explain that “two directors were stationed, the transfer of significant influence on the underlying company, and the counterparty required an appropriate premium on the transaction priceâ€. Despite the premium, the market does not seem to recognize it. On the night after the announcement of the acquisition, the stock price of the US stock exchange UT Starcom, the stock price only from 3.72 US dollars / share micro-sheet to 3.79 US dollars, and the purchase price of 5.35 US dollars / share is still a far cry. In the end, the market underestimates UT Starcom, or the Tongding Internet does buy expensive, time will eventually give an answer. Brake Pad For Hyundai,Brake Pads For Hyundai,Ceramic Brake Pad For Hyundai,Auto Spare Parts For Hyundai Hengshui Zhongcheng Friction Material Co.,Ltd. , https://www.hszcbrake.com
Fancy in the 5G field technology, the integration of the Internet into the main UT Starcom