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On 5/3, chairman Loo bought another 1.6 million shares.
So he has already bought 9.6 million shares so far.
This mornimg share price hooves between 99.5 cents to $1.
So far until now only 83,200 shares transacted. lol
So he has already bought 9.6 million shares so far.
This mornimg share price hooves between 99.5 cents to $1.
So far until now only 83,200 shares transacted. lol
JessTrang ( Date: 06-Mar-2024 16:27) Posted:
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SINGAPORE - In May 2017, listed property group Wing Tai Holdings, together with privately held Wing Tai Investment, made an unconditional takeover offer for Wing Tai Malaysia (WTM) at RM1.80 (51 Singapore cents) per share.
The offer price was a premium of 52 per cent to the last traded price of the stock at RM1.18. The joint offerors, which included the founding Cheng family, owned approximately 66.13 per cent of WTM at the time of the offer.
The net asset value (NAV) of WTM was at RM2.70 per share, effectively translating the offer price to a discount of 33 per cent to net tangible assets (NTA).
The people in charge at WTM are its managing director Cheng Wai Keung and his brother, executive director Edmund Cheng.
The offer was a success and WTM was privatised.
In Singapore, Wing Tai Holdings, which is listed on the Singapore Exchange (SGX), celebrated its 60th anniversary in 2023.
The people in charge are Mr Cheng Wai Keung, who is chairman and managing director, and Mr Edmund Cheng, who is deputy chairman and deputy managing director.
According to the company&rsquo s 2023 annual report, the two brothers, with their family and companies, own a combined 66.5 per cent of Wing Tai Holdings.
Any similarities to the Malaysian scenario here?
On Feb 6, Wing Tai announced that its half-year revenue had slid to $97 million, while net profit was down to $20.5 million.
The company attributed the decrease in revenue to the lower contribution from development properties, as most have already been sold.
But what is interesting here is that the company&rsquo s cash and cash equivalents are now at a whopping $683 million. That translates to 90 cents per share in cash. And this translates to a NAV of $4.05 per share. The group&rsquo s net gearing ratio is at just 0.03 times.
Despite the huge cash holdings, in July 2023, the company rescinded an offer to buy Holland Tower in a collective sale deal due to certain conditions that were not met. This might be a blessing, as prices in Singapore&rsquo s top-end condominium sector are looking somewhat wobbly after three years of post-Covid-19 surge.
So Wing Tai has no new developments on the horizon.
Is there more to look forward to? A clue may lie in the very aggressive share buyback by the owners of Wing Tai after the Holland Tower deal was called off.
Ms Helen Chow, Mr Cheng Wai Keung&rsquo s wife, started buying shares in September 2023.
In all, she has bought Wing Tai shares on 57 occasions as at Feb 23.
From Sept 11 to Nov 3, 2023, Ms Chow bought shares every single day for eight consecutive weeks. She continued to buy shares after that, although not on a daily basis, all the way to February 2024. Her purchase prices would have been from above $1.40 to the low $1.20s.
This is a company that has paid dividends for more than a decade without fail. It paid a dividend of three cents and a special dividend of two cents in 2023, making a total payout of five cents.
So Ms Chow was obviously being savvy when the market was not. But is the dividend the only reason for buying so many shares? So aggressively? And in such a hurry?
By October 2022, filings show the company itself had already bought back almost 34 million shares from the market, at prices ranging from just below $2 down to $1.50 levels.
As I have noted in previous articles, a company buys back shares because the management deems it the best use of the company&rsquo s cash. It presents no risk, and benefits the shareholders directly.
At $2, Wing Tai&rsquo s management made the judgment that the shares are just too cheap.
Indeed, at current prices &ndash the stock closed at $1.36 on Feb 27 &ndash Wing Tai is hugely undervalued.
The company has a huge cash hoard and negligible gearing. And each stock is backed by more than $4 in assets.
Given how the shares are unappreciated by the market, the company might be perfectly ripe for the owners to take it private, as they did in Malaysia. There is no reason for the management to go out and look for new projects, when the value is right under their noses.
But whatever privatisation offer made has to be palatable to the remaining 33 per cent shareholdings not controlled by the owners. Market insiders reckon the offer price will have to be above $2 per share, but will probably be below $2.50.
In other words, a premium high enough to be attractive to the public shareholders, but not too big a discount to NTA to be deemed &ldquo not fair&rdquo by independent financial advisers.
Underappreciation and undervaluation are prompting many companies to contemplate delisting from the SGX. In 2022, 36 companies were delisted from the local bourse. In 2023, 25 were delisted. That makes it an average of 2.5 companies a month delisting in those 24 months.
There have yet to be any delistings in 2024. But given the low liquidity and lack of interest, especially where the mid-caps are concerned, it is almost a certainty that there will be some down the road. Given the very poor market conditions here, market players should perhaps identify a &ldquo potential delistings&rdquo portfolio.
But I digress. Back to Wing Tai.
Its market cap is currently at around $1 billion. Its net assets are above $3 billion. The company pays a decent dividend every year.
There are several scenarios that can play out here.
The company can decide it no longer needs such a huge cash stockpile because there are no projects in the works, and decide to give out a special dividend to shareholders. This is always possible because the owners control 66 per cent of the company. So the lion&rsquo s share of the dividend will go to them.
It also helps that the owners of the company are wealthy. It means they will have no problems raising financing should they opt to privatise the company. In 2019, a private company held by Mr Cheng Wai Keung and his wife sold a house in Nassim Road for $230 million. It was the most expensive house ever sold at the time in Singapore, so raising financing for a privatisation would be no issue.
Mr Cheng Wai Keung is 73 and his brother Edmund Cheng is 71. They are highly respected businessmen, but are now in their golden years.
They may want to privatise the company to unlock its value, the same way they did with Wing Tai Malaysia. This is especially if they believe it would be the best move for the company&rsquo s heirs and successors.
The way that the family is buying back shares indicates that this is probably the most likely scenario.
JessTrang ( Date: 06-Mar-2024 16:27) Posted:
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think in sgx, we look out for privatisation signs as investment, lol
https://www.straitstimes.com/business/companies-markets/wing-tai-an-under-appreciated-property-play-ripe-for-privatisation
https://www.straitstimes.com/business/companies-markets/wing-tai-an-under-appreciated-property-play-ripe-for-privatisation
Secret_Squirrel ( Date: 05-Mar-2024 18:13) Posted:
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In addtion, between 29/2 to 4/3, Chariman Loo also bought an additional 3.5 million shares.
Bought so much, likely that it is a great bargain for him.
If he wanted to support share price, he could just bought at max a few hundred thousand shares as this is not a penny stock.
In short he bought a total of 8 million shares between 27/2 to 4/3.
Now the share price drop until $1, wonder whether he will buy somemore.
Bought so much, likely that it is a great bargain for him.
If he wanted to support share price, he could just bought at max a few hundred thousand shares as this is not a penny stock.
In short he bought a total of 8 million shares between 27/2 to 4/3.
Now the share price drop until $1, wonder whether he will buy somemore.
finjungle ( Date: 04-Mar-2024 10:18) Posted:
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