Forum Archive Index - November 2001

["SWLEE" <SWLEE@xtra.co.nz>]

Ross,
Based on the their half year results just few days ago, the share price of
the existing share should  worth  between $18-$30,  compared to the current
$14.8. This is based on the assumption that post separation, the health
share price would range between $23.75-$42.75 and the appliance share would
range between $7.32-$9.15. These figures were arrived at a sensitivity
analysis of the prospective P/E ratios of ranging from 25-45 for the health
shares and 12-15 for the appliance shares.

Prospective P/E.
The figure of 25-45 for the health division is not unreasonable assumption
because of the reported projected growth of 40-60%, and especially if one
compares it with similar medical device manufacturers in OZ; COH-hearing
device-prospective P/E of 60; RMD-sleeping devices-prospective P/E of 43.
(both of these companies are expecting growth of >20%)

The figure of 12-15 for the appliance share may be somewhat conservative for
a well managed businesses with reasonable growth, but would be good enough
for an analysis purpose.

Let me put some figures here to justify the calculation and hopefully will
raise some debate among the chatters:-

F&P reported a H/Y result ended 30/9/01:

Health division: reported trading profit $40.5M -
Projected Trading profit for the full year: $95M
Appliance Division: trading profit of 17.1M -
Projected trading profit for full year : $40M
(Phillip Robinson in his message on 26/8 projecting trading profits of  $80M
and $44M)

Existing number of shares on issue: 120M (approx)
Post separation: 100M and 66M health and appliance shares respectively.

Therefore earning per share, post separation:
Health: $0.95 per share
Appliance: 0.61 per share

Projected share prices: Health $23.75-$42.75 per share
                                    Appliance$7.32 -$9.15

 What is the worth of an existing F&P share?
Each existing F&P share will be entitled to 0.528 of the new health share
and 0.55 of the appliance share, post separation.

This represents to the existing share of  $16.57-$27.6  (ie, .528x($23.75
to$42.75) plus 0.55x($7.32-$9.15).
Each existing share will also receive a cash payment of $0.45-$0.71 from the
proceed of the health share sale to offshore investors.

Potential Upside
A) The cash payment of $0.45-$0.71 per share, which is based on the
US$16-$$18 for US ADS for the health shares, is likely to be much more,
reason being the US$16-$18 would only value the health share at a
prospective P/E of 11.8!! from the just H/year result.

B) Not included in the calculation so far, is the investment income that the
new appliance co. will get from being a 20% shareholder of the health co.;
almost $20M per annum extra, on equity basis. This potentially could add a
further $3-$4.5 to  the existing share price.

C) The finance section of the new appliance co. was conservatively assumed
to be profit neutral post separation. Additional value of $0.5-$1 could be
added to the existing share price.

Potential downside.
The only risk to the share price is the foreign exchange which may impact
negatively by the tune of 8-10% should NZ$ appreciates greatly against the
greenback.

 FOOD FOR THOUGHT!!

Stephen
(holding F&P shares but would wish to have more fund to buy more at the
current price.)




----- Original Message -----
From: "redredwine" <redredwine@paradise.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Saturday, November 03, 2001 12:23 AM
Subject: [sharechat] Fisher and Paykel Healthcare


> I understand FPH will list 14Nov01.
>
> Does anyone have any idea at about what price?
> And can you tell me how I might go about placing an order to buy before it
> lists, if that is possible, ie: what is the best strategy for getting in
> early?
> And is there anywhere I can watch the intraday as it happens? [curiosity
> and knowledge gathering]
>
> Thanks
> Ross
>
>
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