Date: Mon, 31 Mar 2025, 3:32  am

Subject: Question For AGM 15 Apr

To: YZJFH < [email protected]>

 

Hi IR of YFH,

 

I hold shares in YFH under the custodian FSMone (screenshot attached)

 

I refer to the 2 SGX announcements made on Script Dividend on 28 Mar and the Sales of Treasury Shares on 30 Mar.

 

I have the follow question for YFH management :-

 

With the 193.5m treasury shares being placed out, and the proposed script dividend mandate if passed, would mean YFH is going to issue new shares up to 153m to pay for the FY24 0.0345 dividend (say issue at a hypothetical price of 0.795 for example), assuming a 100% opt in rate.

 

  If YFH were to stop SBB going forward due to the much higher share price now and also to conserve the cash for MF investments, then YFH shares O/S is expecting to increase very significantly from the current 3480m to =(3480+194+153) = 3827m for FY25.

 

With a new much higher shares O/S in FY25, YFH will need to achieve a much higher FY25 NPAT at $333m in order to at least just maintain it' s FY24 EPS of 0.087 and DPS 0.0345. 

 

This is a significant 9.5% or $29m increase of NPAT from $304 to $333, else shareholders will see a lower EPS and DPS in FY25.

 

The total new equity injected is $139m + $121m = $260m. The increase in NPAT to at least match FY24 performance and payout is = (330m - 304m) = $29m. This implies that YFH must achieve a net ROE on this new capital = 29/260 = 11.15% (or a pre-tax return of ~14.1%, assuming average tax rate 21%).

 

YFH overall net FY24 ROE is just = (304m/4222m) = 7.2% (this is a net overall average ROE including those much lower returns from Cash Mgt and Yield Products ...). So unless YFH already has in mind high returns projects that can beat a net ROE 11.15% for this new $260m capital injection, I can really see a challenge here for YFH to even at least maintain its FY24 EPS and DPS in FY25, especially when there is still a $75m Govt grants+Forex gains in FY24 that is not going to recur in FY25.

 

YFH has a very huge $1813m in Cash Management not being productively deployed to higher returns investments as at end 2024 (Page 9 FY24 PowerPoint) and earning probably just 4~5% pa return. With so much idle cash on hand, why is YFH still raising even more cash from these new $260m equity injection that requires a high net ROE return of at least 11.15% ?

 

I look forward to receiving some enlightening answers from YFH management during the AGM.

 

Thank you.

 

--------xxxxxx------

 

Your questions have been well received. The management will address them during the AGM.

 

Thank you.

 

Best Regards,

 

Vicki Zhou (Zhou Yan) 

Consultant (Singapore) 

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