Hi-P Voluntary Unconditional Cash Offer

Hi-P Voluntary Unconditional Cash Offer

On Friday 18th December 2020, a Voluntary Unconditional Cash Offer was made by YHT Venture Pte Ltd for Hi-P International Limited. YHT Venture Pte Ltd is a Special Purpose Vehicle (“SPV”) currently held by Hi-P’s CEO Mr Yao Hsiao Tung.

Hi-P International Limited is a global leading manufacturer in the telecommunications, lifestyle, computing and automotive industries. If you didn’t know, Hi-P is one of the part suppliers (metal casing) for the popular Redmi phones manufactured by Xiaomi. The other supplier is Foxconn. Despite the low dividend yield, Hi-P International is one popular stock often mentioned by investors because of the popularity of the Xiaomi mobile phones and its quality. Personally, I know a friend who held Hi-P International shares since 2016 because of the popularity of Xiaomi mobile phones.

The offer price is S$2 per share, made with a view to delist the company from the Singapore Exchange (SGX). This is 13.6% premium to the last transacted price. The offeror does not intend to revise the offer price, save that the offeror reserves the right to do so in accordance with the Code if a competitive situation arises.

Mr Yao held 83.4% of the shares while his wife held 0.1% of Hi-P shares.

Hi-P Offer Price

The offer price also represents a premium of approximately 160.1% over the net asset value per share as of 30 June 2020.

Below is a chart that shows Hi-P’s share price since 2015 till to date. If you have bought Hi-P International in 2015, you probably bought at S$0.50. Thus, the offer price is 4 times the price you bought at.

Hi-P International Share Price

I hope you have not bought Hi-P at the peak in 2018, otherwise you would have lost money.

This offer presents an opportunity for shareholders to exit their entire investment in the Hi-P shares, which may otherwise be difficult due to the low trading liquidity of the Hi-P shares.