The news that Dell announced privatisation shook many people's nerves

The news that Dell announced privatisation shook many people's nerves. This also makes the term "privatization" a hot spot again. In addition to the privatization of Alibaba, Shanda Network, and other Chinese concept stocks, the author of the analysis that the perfect world, rice, Shanda games, more than 10 companies should consider privatization.

In the analysis of the motives of privatization, Lin Jiaxi Investment CEO said, companies that meet the following two conditions should consider privatization: 1, the company's business needs to make a major transition, the state of the listing is not conducive to its transformation, such as Dell, 2, the two markets (such as the U.S. stock market and the domestic market) has the difference, privatization is highly beneficial.

Other investment bank analysts believe that, in addition to the above two factors, if a company's stock price in the long term there is no room for the future, a lot of cash or even more than market capitalisation, the company's founder has strong control, should seriously consider privatization.

Combining the above factors, the author believes that the following companies have the possibility of privatization:

1, online game concept stock Company

Perfect World

Privatization possibilities: Four-star-half

The reason for privatization: A. P/E is only 4.8, while the domestic online games listed companies have a price-to-earnings ratio of 40 times to 80 times times. Returns to the domestic market will gain greater benefits.

B. Holding 479 million of dollars in cash and short throws, with a market value of only 549 million dollars. Privatization costs are lower.

C. Share prices have been depressed since the second half of 2011.

D. Chi has some control, a shareholding of 17.6%, management shares of 20.8%.

E. Need to invest more in Web pages and mobile games.

Progress: There have been reports that investment banks and funds have proposed a perfect privatisation, and their management is already considering it.

Rice

Privatization possibilities: Four-star-half

The reason for privatization: The stock price has been depressed since a.2012 years, the effect of repurchase shares is not very good.

B. Holding 122 million dollars and short shot, the market value of only 187 million U.S. dollars, the cost of privatization is lower.

C. P/E ratio is only 18 times times, less than the domestic game stocks PE. At the same time, the company may have better financing opportunities after its retreat, such as a strategic stake in or acquisition of a domestic cultural and creative Fund.

D. The Chairman of the Board of Directors Zeng Liqing shareholding of 18.9%,ceo Wanghai 11.4%, the entire executive and the director of the team holding up to 65.5%, with strong control.

Giants Network

Privatization possibilities: Samsung

Privatization reason: a.pe only 8 times times, far below the domestic net swims shares 40 times times-80 times times PE.

Shi Yuzhu and his daughter a total of 68% of the shares, although the company holds only 160 million U.S. dollars in cash (the market value of 1.445 billion U.S. dollars), but believe that according to Shi Yuzhu's strong ability to operate capital, to privatization is minute things.

C. Need to invest more in Web pages and mobile games.

Grand Games

Privatization possibilities: Samsung half

Reasons for privatization: A. P/E is only 4.2, far less than the domestic game stocks PE.

B. 670 million of dollars in cash and short throws, the current market value of only 816 million U.S. dollars.

C. Need to increase the input of web games and mobile games.

D. Grand Games by the Grand Group Holding 73%, Tian Hashimoto held a grand game of 43.8% of the shares, with a high degree of control.

Nineth City

Privatization possibilities: Samsung

Reasons for privatization: A. P/E is low to negligible, far below the PE of the low net game stocks.

B. The market value is very low, only 71.26 million U.S. dollars, holding cash as high as 125 million U.S. dollars. The company is still facing a huge succession of losses, not as much as the withdrawal of the market cut to some of the business, and to lightweight web games and mobile gaming transformation.

C. Zhu holds a 22.2% stake and has some control.

2, companies in need of transformation

New Oriental

Privatization possibilities: Samsung half

Reasons for privatization: A, the new oriental facing the fierce impact from other educational institutions, in addition to layoffs and control costs, the new Oriental urgent need to accelerate the transition to the field of online education. The state of the listing is not conducive to its transformation.

B, New Oriental has been in the air since last year, and its share price has not recovered to its highest point since the plunge.

C, holding 842 million dollars in cash.

D, the P/E ratio is 22 times times, while domestic A's share of education shares is about 40 times times. At the same time, the new Oriental in the domestic market word-of-mouth more strong, no strong international demand.

Ctrip

Privatization possibilities: Two stars

The reason for privatization: A, where to face the great threat of online tourism networks and mobile Internet, is in urgent need of transformation.

B, share prices have been depressed since 2012, with fierce competition and a fall in net profit, it is expected that there is little room for the price to rise in the next year or two.

C, the company currently holds 660 million of dollars in cash and short investment, the market value of 2.98 billion U.S. dollars, if the market value of further shrinkage, can consider privatization.

PS: The number of shares held by Ctrip's management is very small, and the high price/earnings ratio and market capitalisation are the most important reasons to hinder its privatization.

3, holding companies with cash above market value

The following companies hold more cash than their market capitalisation and are fully privatized. Of course, each company is different, I think that if the company's strategic development angle, owning a shell company is better than the market.

Mecoxlane

Privatization possibilities: Two stars

The market capitalisation is only 30.1326 million dollars, while the cash held is as high as $42.84 million. Its share price has been falling since 2012, and privatisation seems to be a better way out. However, as a corporate e-commerce concept of the company, Macaulay has been at a loss, even if the withdrawal of the market is difficult to have good financing channels. So privatisation is not the best option for Macaulay.

Skye Network:

Privatization possibilities: Samsung half

Skye, which has a market capitalisation of $61.3204 million trillion, and a $94.99 million trillion in cash holdings, has been depressed for a year. Smart phones quickly replaced the cottage machine, Skye in the short term it is difficult to have a big positive appearance.

China Video Media

Privatization possibilities: Two stars

The company, which has a market capitalisation of 20.4652 million yuan, has a cash margin of $76.19 million and has been on the verge of delisting. But for the company's management, it is clear that they do not want to return to the city, or even launched a rescue operation. Therefore, if the Chinese withdrawal of the city that must not be the initiative of privatization, but was forced.

Summary: Privatization may be a good thing, after all, it is possible to look for new and higher channels of liquidity and transition. However, they may note the risks of high interest rates on loans, excessive time costs, policy risks to return to domestic listings, and the risk of dilution of management shares.