SSI 0.00% 28.0¢ sino strategic international limited

market price 79c as against valuation 11.02 to

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    below is a exerp from todays report


    Impairment testing/Independent Valuation of gaming assets
    Impairment testing is performed annually for goodwill and intangible assets. This year BDO Kendalls
    Corporate Finance (“BDO”), a division of BDO Kendalls, one of Australia's largest professional accounting
    and advisory practices, carried out an independent valuation of the equity and intangible assets of China
    Entertainment Holdings Limited (“CEH”) acquired by SSI in November 2005 (essentially the gaming rights
    of the Company at that time).
    These gaming rights, which have a carrying value of $68.8m in the Balance Sheet, were valued at between
    $66.9m and $77.2m by BDO.
    As there have been many enhancements to the gaming business since purchase, BDO also conducted an
    independent valuation of all of the Company’s gaming rights in addition to the rights included in the
    Balance Sheet (including Welfare Lotto and Keno, Sports Lotto and Sports Betting but excluding VLT) and
    arrived at a value of between $788m and $905m, equivalent to approximately A$11.02 and A$12.65 per
    SSI share fully diluted. This represents a substantial premium over and above the total current market
    capitalisation of SSI and demonstrates the significant mismatch between the Company’s fundamental
    enterprise value relative to the current market price of SSI shares.
 
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