On May 30, Hong Lai Huat Group : CTO 0% deputy chairman and CEO Ong Bee Huat acquired five million shares at an average price of S$0.04 per share. With a consideration of S$200,000 the married deal increased his total interest in the real estate and property developer from 42.33 to 43.30 per cent.

 

Ong is the founder of the group and responsible for overall strategic direction and planning as well as business development.

 

Hong Lai Huat Group has received 99.99% shareholder approval to sell its HLHI (Cambodia) and HLH Agriculture (Cambodia) assets for a price of US$1.5 million ($2.02 million) and US$36 million ($48.4 million) respectively.

 

According to the company, upon completion, proceeds from the sale will go towards strengthening its balance sheet.

 

&ldquo We are thankful to all our shareholders who came down this morning to vote for the sale of the Agriculture Division, this will allow the group to restructure its businesses in Cambodia to become a full suite real estate and property developer moving forward,&rdquo says executive deputy chairman and group CEO Ong Bee Huat.

HONG Lai Huat is looking to sell two of its loss-making subsidiaries in Cambodia for a total consideration of US$37.5 million.

 

This move would mark the group&rsquo s exit from its agricultural business, which &ldquo has never been profitable&rdquo since its inception in 2008, said the property developer on Monday (Feb 5).

 

Hong Lai Huat intends to seek shareholder approval for both transactions in an extraordinary general meeting to be held in due course.

 

One subsidiary, an investment holding and property investment holding, owns dormant land in the countryside spanning 509.54 hectares (ha) in total and will be sold at a consideration of US$1.5 million. 

 

Hong Lai Huat said it has no immediate plans to develop this land &ndash and that it views other existing landbanks with better locations in the city area as potentially &ldquo more suitable for development&rdquo under its property division.

 

Another subsidiary, which is to be sold for a consideration of US$36 million, owns the rights to 12 parcels of agricultural land with an area of 8,999.95 ha.

 

The land is primarily used to cultivate fresh cassava. It also houses individual offices, warehouses, workstations and production facilities, including a cassava starch production factory.

 

Based on the difference between the disposal consideration and the company&rsquo s book value of S$61.8 million as at end-June 2023, Hong Lai Huat expects to recognise a loss on disposal of S$13.6 million on the sale of the subsidiary owning rights to this land.

 

The subsidiary is estimated to have contributed to an attributable net loss of US$1.6 million, or S$2.1 million, out of the S$2.4 million net loss reported by the group for H1 FY2023. 

 

Its US$36 million sale consideration represents a discount of 17.05 per cent to the net tangible asset value of the sale shares amounting to about US$43.4 million.

 

Highlighting the agricultural segment&rsquo s revenue from FY2022 to H1 FY2023 as &ldquo relatively insignificant from an absolute quantum basis&rdquo , Hong Lai Huat said the overall financial performance of this segment &ldquo would likely become increasingly smaller, or marginal, as the property division starts to contribute a greater proportion to total group revenue from its sale of property units&rdquo .

 

Disposing of both Cambodian subsidiaries is expected to raise net proceeds of S$50.2 million in total, which the group intends to deploy for working capital or other purposes, such as to reduce its gearing ratios. 

 

Doing so will provide the group with greater options and flexibility in managing its capital, strengthening its balance sheet and cash position, and the repayment of bank loans &ndash pending the launch of sales of Hong Lai Huat&rsquo s future development projects. 

 

Assuming both disposals were completed on Jan 1, 2022, this is estimated to result in a FY2022 loss per share of S$0.04 instead of S$0.02.

 

Had the transaction been completed on Dec 31, 2022, Hong Lai Huat&rsquo s net tangible assets to net asset value for the fiscal year would have been at S$0.23 per share instead of S$0.27, while its gearing ratio would have stood at a higher 0.09 times than the reported 0.08 times for FY2022.

 

Hong Lai Huat Group is selling a 50% interest in its tapioca venture in Cambodia to a Thai company for US$32.5 million.

 

BioMatLink, led by founder and CEO Thanika Chintanapunt, is described as a multinational firm specialising in innovative, high-tech, large-scale tapioca cultivation.

 

It is also involved in the production of bio-ethanol via a network of production facilities.

 

According to Hong Lai Huat, its tapioca venture covers some 10,000 hectares of farmland and is also equipped with processing and supporting facilities.

 

It is located in the Aoral District, Kampong Speu Province of Cambodia.

 

" With BioMat&rsquo s extensive background as well as several years of experience in large scale tapioca plantation, the production of upstream and downstream cassava products and bio-ethanol production, the board is of the opinion that the proposed transaction is beneficial to the group in the long run," says Hong Lai Huat.,

On Mar 13, Hong Lai Huat Group : CTO -9.59% deputy chairman and CEO Ong Bee Huat acquired four million shares at an average price of S$0.066 per share. With a consideration of S$264,000 the married deal increased his total interest in the real estate and property developer from 41.37 per cent to 42.14 per cent.

 

Ong is the founder of the group and responsible for overall strategic direction and planning as well as business development.

 

On Feb 28, the group reported a loss of S$10.4 million in FY22 (ended Dec 31) as compared to net profit of S$3.5 million in FY21.

 

As relayed back on Feb 17, the loss was largely attributed to non-cash items such as the partial write off for its cassava biological assets, certain non-operational fixed asset, impairment losses on an old equipment sale in Cambodia, and minimal losses incurred towards the operation in Cambodia due to lower sale of its property units in a challenging FY22.

 

The group added on Feb 28 that its second mixed-use project Royal Platinum&rsquo s construction will have its topping out ceremony in mid-March 2023, which will mark a significant step in completing the entire project, as per the scheduled timeline.

 

The group added that with the opening of international borders, it remains optimistic and will work closely with its stakeholders on the sale of its property units in FY23.

 

The group also highlighted it will concurrently work on launching the fourth mixed-use project in Sihanoukville, in which the group has a minority interest, before H123 and it plans to diversify its income stream in FY23 by converting and refurbishing the property units in the D&rsquo Seaview project for serviced apartment rental purposes.

A Few Hundreds Millions Waiting To Be Collected!

Waiting for one of its largest group of Chinese Buyers to come, before launching the third project!


" The Group acquired its third piece of land around 1.2 hectares in Toul Kork District, Phnom Penh back in September 2021 which has a current market worth around USD 24 million. The Group also acquired a minority interest in its fourth piece of land around 12 hectares located in Sihanoukville in which the Group is planning to soft launch the project to the market by March 2023. These ensure all our stakeholders that  the Group continues to hold strong land banking options for future projects to be subsequently developed in the Kingdom of Cambodia."  

Hong Lai Huat, on Dec 22, announced that the FY2022 had &ldquo posed a huge challenge&rdquo to its business in Cambodia with the rising risk of a global recession, inflation, rising bank interest and mortgage rates as well as other market uncertainties.

 

That said, the group says the main construction work for its second mixed-use project located at Toul Kork District, Phnom Penh, is &ldquo well on schedule&rdquo to be completed in FY2023, with 22 out of 28 floors completed.

 

Both of its residential towers will have a total of 851 units upon its completion.

 

Barring any unforeseen circumstances, the group plans to hold a topping-out ceremony around February 2023. It plans to hand over the 50 commercial units to its buyers before June 2023.

 

&ldquo Although the sales of the units have been impacted by the challenging market conditions, the group will continue its best efforts to market and sell the residential and commercial units on hand which is estimated to be worth around US$180 million ($243.3 million).

 

In its current portfolio of property and real estate projects in Cambodia, the group has completed the full-scale mixed-use project, D&rsquo Seaview at Sihanoukville. The D&rsquo Seaview project currently hold about 196 unsold units on hand which has a market value around US$50 million. Of the unsold units, around 46 of them have been furnished and tenanted.

 

There are also plans to further furnish and convert the remaining 150 units on hand for rental purposes to diversify the group&rsquo s revenue stream.

 

In its statement on Dec 22, the board said that the group &ldquo will continue to seek opportunities to strengthen its position as a diversified real estate and property developer in Cambodia&rdquo despite the global challenging environment.

 

It adds that it will &ldquo thread cautiously&rdquo towards FY2023.