Hotung Investment (和通）

(17-02-2017, 11:48 PM)cyclone Wrote: Financial results for the year ended 31 December 2016 : http://infopub.sgx.com/FileOpen/2016%20f...eID=439650

Hotung declares cash dividend NT$3.1 per share for the financial year ended 31 December 2016.
Assume 1 NT = 0.046 SGD => NT$3.1 = S$0.1423.
Today's closing price is 1.6, so the current dividend yield is  8.9%.
NAV per share as at 31 December 2016 was  S$3.31

Yummy, yummy.

The return to shareholders have been generous.
Dividend for the past few years have been almost 100% payout ratio.
Coupled that with the buybacks. 
I can't say that I didn't enjoy my hor hor-tung.

<near core>

skank is going up (almost 1.80) for no apparent reason. Is it a chance to finally ditch it or I risk to be just cutting my profits ? Are they going to IPO one of their lousy controlled companies perhaps ?

(20-04-2017, 11:45 AM)Gaudente Wrote: skank is going up (almost 1.80) for no apparent reason. Is it a chance to finally ditch it or I risk to be just cutting my profits ? Are they going to IPO one of their lousy controlled companies perhaps ?

Could it be this reason:

http://www.theedgemarkets.com.sg/article...%80%99-rhb

The report came out 3 days ago.

(20-04-2017, 05:38 PM)level13 Wrote:

(20-04-2017, 11:45 AM)Gaudente Wrote: skank is going up (almost 1.80) for no apparent reason. Is it a chance to finally ditch it or I risk to be just cutting my profits ? Are they going to IPO one of their lousy controlled companies perhaps ?

Could it be this reason:

http://www.theedgemarkets.com.sg/article...%80%99-rhb

The report came out 3 days ago.

Human mind is tremendously "reasonable". 
Meaning have to find any reason to fit in any price movement. haha.
If you can't make use of Mr Market's service, it is fairly likely that you are (mis)guided by him.

I'm still waiting for someone to say "this gem" for me to consider selling it to them. :p

Proxy to Tech Boom With Solid Discount And Dividend

With a solid track record of profits and dividends, HIH represents an amazing opportunity to profit from Greater China’s tech firms at 0.52x P/B through an experienced and capable manager. With strong potential for growth (fund management fee up to NT$450m), HIH is supported by insider purchases and share buybacks. A dual/re-listing in Taiwan is also possible. Initiate coverage with a BUY and S$3.38 target price based on 0.94x P/B and a 2017F dividend yield of 7.9%.
Investment highlights

• Initiate coverage with a BUY and target price of S$3.38, based on 0.94x P/B, implying 79.1% upside. We value Hotung Investment Holdings (HIH) at S$328.9m based on 0.94x P/B, pegged to a 10% discount to its peers’ average.· Grand Old Dame of Taiwan’s venture capitalist scene with ~30 solid years of experience and profits. HIH boasts close to 30 years of investment experience with a leg up in deal sourcing through its rich heritage as a venture capitalist (VC) pioneer in Taiwan as well as an impressive investment team. Barring the 2008 financial crisis, HIH has built a solid track record of strong profits over the last 10 years.· Growth proxy to Greater China’s tech space with exposure to the hottest tech industries. Ytd, the FTSE Taiwan tech index rose 9.9% thanks to the global tech boom. With immense investor interest in Greater China Tech and global demand for new technology forecasted to push Taiwan’s GDP growth higher, we see buoyant valuation multiples, improved earnings and ultimately greater value for HIH.· Focused on exits with at least one unlock targeted yearly; fund management fee income up to NT$450m. With 200 IPO listings under its belt, HIH is always on the look-out for exits and cash recycling. Management has guided a strong pipeline for 2017 and beyond and we believe that HIH should be able to execute at least one exit/value unlock every year. Meanwhile, HIH’s fund management arm has the potential to provide income of more than NT$450m p.a., a figure not inclusive of profit sharing.· Generous dividend yield of 7.9% for 2017-18F with share buybacks, management purchases and solid dividends records. Over the past five years, HIH has delivered a solid dividend cumulatively averaging S$0.66/share and equivalent to a 97% payout. Backed by a pipeline of investments and exits, management has guided that this will continue and we expect a 7.9% dividend yield for 2017-18. Other than dividends, there have been share buybacks (2.24% since May 16) and insider management purchases supporting management’s confidence in HIH.· Undervalued at 0.52x P/B with around half of its market cap in net cash despite consistently profitable portfolio. Despite a consistently profitable portfolio (where individual investments are typically less than 5% of total value), HIH currently trades at a deep ~45% discount to our estimated 2017F NAV of S$338.7m. Furthermore, around half of its market cap is reflected in its NT$2.14b net cash balance sheet.· Potential dual listing/re-list in Taiwan. The Taiwan exchange has amended regulations that previously disallowed VCs from being listed, meaning that HIH no longer has to tolerate depressed SGX valuations. With its strong reputation in Taiwan, we opine that there is a high chance that HIH may choose to dual list/re-list there.

• https://research.uobkayhian.com/content_...e951b58743

(15-05-2017, 10:34 AM)SeniorSat Wrote: Proxy to Tech Boom With Solid Discount And Dividend

With a solid track record of profits and dividends, HIH represents an amazing opportunity to profit from Greater China’s tech firms at 0.52x P/B through an experienced and capable manager. With strong potential for growth (fund management fee up to NT$450m), HIH is supported by insider purchases and share buybacks. A dual/re-listing in Taiwan is also possible. Initiate coverage with a BUY and S$3.38 target price based on 0.94x P/B and a 2017F dividend yield of 7.9%.
Investment highlights

• Initiate coverage with a BUY and target price of S$3.38, based on 0.94x P/B, implying 79.1% upside. We value Hotung Investment Holdings (HIH) at S$328.9m based on 0.94x P/B, pegged to a 10% discount to its peers’ average.· Grand Old Dame of Taiwan’s venture capitalist scene with ~30 solid years of experience and profits. HIH boasts close to 30 years of investment experience with a leg up in deal sourcing through its rich heritage as a venture capitalist (VC) pioneer in Taiwan as well as an impressive investment team. Barring the 2008 financial crisis, HIH has built a solid track record of strong profits over the last 10 years.· Growth proxy to Greater China’s tech space with exposure to the hottest tech industries. Ytd, the FTSE Taiwan tech index rose 9.9% thanks to the global tech boom. With immense investor interest in Greater China Tech and global demand for new technology forecasted to push Taiwan’s GDP growth higher, we see buoyant valuation multiples, improved earnings and ultimately greater value for HIH.· Focused on exits with at least one unlock targeted yearly; fund management fee income up to NT$450m. With 200 IPO listings under its belt, HIH is always on the look-out for exits and cash recycling. Management has guided a strong pipeline for 2017 and beyond and we believe that HIH should be able to execute at least one exit/value unlock every year. Meanwhile, HIH’s fund management arm has the potential to provide income of more than NT$450m p.a., a figure not inclusive of profit sharing.· Generous dividend yield of 7.9% for 2017-18F with share buybacks, management purchases and solid dividends records. Over the past five years, HIH has delivered a solid dividend cumulatively averaging S$0.66/share and equivalent to a 97% payout. Backed by a pipeline of investments and exits, management has guided that this will continue and we expect a 7.9% dividend yield for 2017-18. Other than dividends, there have been share buybacks (2.24% since May 16) and insider management purchases supporting management’s confidence in HIH.· Undervalued at 0.52x P/B with around half of its market cap in net cash despite consistently profitable portfolio. Despite a consistently profitable portfolio (where individual investments are typically less than 5% of total value), HIH currently trades at a deep ~45% discount to our estimated 2017F NAV of S$338.7m. Furthermore, around half of its market cap is reflected in its NT$2.14b net cash balance sheet.· Potential dual listing/re-list in Taiwan. The Taiwan exchange has amended regulations that previously disallowed VCs from being listed, meaning that HIH no longer has to tolerate depressed SGX valuations. With its strong reputation in Taiwan, we opine that there is a high chance that HIH may choose to dual list/re-list there.

• https://research.uobkayhian.com/content_...e951b58743

After this article came out, Hotung share price began a nose dive, so much for the exuberant price target of $3.38...shudder...

Now the price target suddenly doesn't seem that absurd?? Take note that it is after the ex-dividend of about 10+cents?

So now everything is good? No more skank? Hehe.

(11-07-2017, 11:41 AM)ksir Wrote: Now the price target suddenly doesn't seem that absurd?? Take note that it is after the ex-dividend of about 10+cents?

So now everything is good? No more skank? Hehe.

I have looked at this several times over the past 5 years. Was attracted by the large discount to NAV, the consistent share buy-backs (albeit small size) which are accretive due to the discount to NAV, the large portfolio of individual private equity investments and a track record of paying out their gains as dividends. However, this puppy has always traded at a big discount to NAV and there seems to be no catalyst  to change that. Management get paid fees as long as the business carries on, so they have no incentive to reduce the discount. The only potential catalyst would be a take-over  by a third party but who knows whether that will ever happen given the illiquidity of this share. So, in my opinion, you would only buy this in the hope of getting regular dividends as they (hopefully) cash out of investment at a profit. Any major capital gain seems a distant prospect.

Not vested.

(11-07-2017, 06:19 PM)GreedandFear Wrote:

(11-07-2017, 11:41 AM)ksir Wrote: Now the price target suddenly doesn't seem that absurd?? Take note that it is after the ex-dividend of about 10+cents?

So now everything is good? No more skank? Hehe.

I have looked at this several times over the past 5 years. Was attracted by the large discount to NAV, the consistent share buy-backs (albeit small size) which are accretive due to the discount to NAV, the large portfolio of individual private equity investments and a track record of paying out their gains as dividends. However, this puppy has always traded at a big discount to NAV and there seems to be no catalyst  to change that. Management get paid fees as long as the business carries on, so they have no incentive to reduce the discount. The only potential catalyst would be a take-over  by a third party but who knows whether that will ever happen given the illiquidity of this share. So, in my opinion, you would only buy this in the hope of getting regular dividends as they (hopefully) cash out of investment at a profit. Any major capital gain seems a distant prospect.

Not vested.

It is rather funny to say that the Management (CEO) who is also the majority shareholder has no incentive to reduce the discount (ohh maybe u mean she wants to buy more? That makes sense).

However from the track records of dividend payout (generally 100%) and share buyback (quite sure you have the numbers), the return of capital to shareholders (which includes CEO) is substantial.

I am actually quite curious to ask, if you are the CEO of Hotung and you want to reduce the discount (make the mr market price closer to NAV), what will you do?

You could do cheap talk (promises) to small money or close-talk with big money or even do financial engineering by divesting profitable investees before the potential are achieved? But is it good for long term shareholders? I pretty much doubt that.

So what could/should you do?
If it is me, I would:
1. Buy back the cheap stocks
2. Pay dividends

Ohh, but those are exactly what she did??

<vested, reduced>

Listing of An Investee Company - LCY Technology Corp.

Hotung Investment Holdings Limited announced the listing of one of its investee companies, LCY Technology Corp. ("LCY"), on the Taiwan Stock Exchange Corporation on 28 June 2018.

The Group had invested in LCY since May 2017.

Information on LCY
LCY is the leading copper foil supplier to automotive and 5G network industry supply chain. Established in 1997, LCY has more than 20-year of manufacturing and product development experience in the copper foil industry. LCY’s R&D team provided printed circuit board (PCB) and copper clad laminate (CCL) clients with customized products, building a significant product competitiveness to maintain high product margin. Equipped with 10,000 tons of annual production capacity, LCY offers a wide range of product types, including 3oz, 2oz, 1oz, 1/2oz, and 1/3oz copper foil. Additionally, to enable future growth, LCY has developed niche products for automotive and 5G network applications, such as 9µm thin foil, VLP (very low profile), DTF (double treatment foil) and RTF (reverse treatment foil).

LCY has shown potential in generating revenue and profit in the past two years. Going forward, LCY’s revenue is expected to gain momentum from upward demand in the automotive and 5G network industry.