Hiap Hoe

To recap plus points for Hiap Hoe:

1) Two of its flagship projects (Waterscape and Skyline360) have unrecognised gross profits of $150mil to $200mil (versus current market cap of $210mil)
2) The 50% JV for the Balestier hotel/commercial development bought the land at less than half the current market value, due to the banking crisis in mid-2009
3) Hiap Hoe's subsidiary is also the main contractor for the Balestier development
4) Hiap Hoe's 2010 Q4 profit is almost certain to be better than previous quarter, with dividends expected.

â–² Hiap Hoe 5JK 0.470 +0.025 +5.6%

Trailing P/E = 5.75
P/NAV = 0.96
RNAV is about twice the share price
91% of revenue from Waterscape yet to be recognized

Quote:NEWS RELEASE

21 Feb 2011

HIAP HOE POSTS ANOTHER YEAR OF RECORD PROFIT

SINGAPORE, 21 February 2011 – Niche property developer Hiap Hoe Limited (SGX: Hiap Hoe) has reported a 82.3% jump in net profit to $16.5 million for the three months ended 31 December 2010 (4Q10), compared to $9.0 million in 2009 (4Q09). Revenue inched up 3.1% to $27.3 million in 4Q10, from $26.4 million a year ago.

For the full year ended 31 December 2010 (FY10), net profit improved marginally to $34.6 million on revenue of $106.6 million, versus a net profit of $34.3 million and revenue of $110.5 million in the previous corresponding period (FY09).

Earnings per share for the quarter and full year stood at 3.49 cents and 7.31 cents, respectively, up from 1.91 cents and 7.26 cents for the corresponding periods a year ago.

Performance Review & Update

The Group launched residential projects, Skyline 360° and Waterscape at Cavenagh to much success during the year, with more than 50% of Skyline 360° and more than 70% of Waterscape at Cavenagh sold to date. With regard to joint-venture residential project, The Beverly, Hiap Hoe has since sold more than 75%. At the close of 4Q10, about 30% of revenue from Skyline 360°, and 9% of revenue from Waterscape at Cavenagh were recognized, along with about 54% of revenue from Signature at Lewis.

Group revenue also received a slight boost from construction services carried out for two joint-venture projects, The Beverly, a residential development, and the integrated hotel/commercial development on Balestier Road/Ah Hood Road. The Group ended the year with total shareholder’s equity standing at $207.0 million, an increase of 18.3% over the previous financial year. Following the bonus issue of one bonus share for every four existing ordinary shares, net asset value per share declined 5.2% to 43.81 cents in FY10, from 46.21 cents the year before. At the close of FY10, cash and cash equivalents stood at $36.4 million.

Dividend

In view of the Group’s profitable results for FY10, the Board of Directors has proposed a final cash dividend of 0.25 cents per ordinary share. Together with the interim cash dividend of 0.25 cents per ordinary share paid out in December 2010, the total dividend for the year will amount to 0.50 cents per ordinary share, or approximately $2.4 million, translating to a dividend payout ratio of about 6.8%.

Outlook

Against a backdrop of macroeconomic uncertainties, as well as government policy overhang, the Group remains cautious about its outlook for 2011. Nonetheless, prices of well-designed residential developments in good locations appear to be holding up, which bodes well for the Group’s residential projects.

Piling work for the Group’s joint-venture project at Balestier Road/Ah Hood Road was completed in the third quarter of 2010. Construction of the park within this joint venture project is expected to be completed in the second half of 2011. The Group hopes to fully develop the hotel-cum-commercial blocks by 2014.

The Group remains prudent in the review of its sales programs for its various residential developments, and is also seeking an opportune time to launch residential development, Treasure on Balmoral.

dividend too little. says a lot about managements and substantial shareholders.

not very minority shareholder friendly.

(22-02-2011, 10:44 PM)freedom Wrote: dividend too little. says a lot about managements and substantial shareholders.

not very minority shareholder friendly.

In the midst of construction of the properties, Hiap Hoe is not actually very cash rich at the moment.

(22-02-2011, 11:09 PM)yeokiwi Wrote:

(22-02-2011, 10:44 PM)freedom Wrote: dividend too little. says a lot about managements and substantial shareholders.

not very minority shareholder friendly.

In the midst of construction of the properties, Hiap Hoe is not actually very cash rich at the moment.

in $'000
proceed from disposal of unquoted investment 18,000
purchase of unquoted investments (45,892)


spent money to purchase unquoted investment, of course not cash rich lah...

and still got a lot of cash to be collected on sale of development properties....

plus still have 36+ mil cash, paying 1 cent for final dividend should not be a problem. 0.25 cent, wtf...

Hiap Hoe HiapHoe Share Buybacks
For its 2008's Share BuyBack Mandate,
it bought back a total of 1.453m shares at cost of $157,955 or at ave of $0.1087 per share only.

For the 2009's Share Buyback mandate: - NO shares buyback was conducted.

For the above two periods, companies were facing a credit crunch and some were having difficulties obtaining favourable refinancings,
so it is understandable that Hiap Hoe was not very aggressive in their Share Buybacks despite share prices being much lower back then.

Under its latest 2010 Buyback Mandate (valid from Apr2010 till up coming AGM next month),
it had so far conducted 8 Buybacks (from Aug2010 to 22-Mar2011) at prices ranging from 38.5c to a high of 41.5c,
all in, it bought a total of 1.429m shares costing $575,730 or at average of 40.29c per share.

As those among us who are following developments at Hiap Hoe will be well aware, it latest Book NAV (at 31-Dec2010) is $0.4381 per share
BUT more importantly its RNAV is easily worth some $1.00 per share coz of outstanding recognitions from a few very fat margins ppty projects
(their landcost are among the lowest within the industry).

If surplus for its Balestier hotel (landcost only $172 psfppr) are also included in, HiapHoe's RNAV will hit $1.20 per share.
(if they proceed to sell one, of the two hotels, at least some part of the surplus will get crystallised)

Thus in this regard, it makes alot of sense for Hiap Hoe to do share buybacks, and I hope they will do it even more aggressively going forward.
==> coz for every share BuyBack at around 40c, the Group's RNAVs will actually improve by some 60c-80c (gain by 150% to 200%) ===> that's much better than tendering for any piece of land now, NO WAY you can make this type of margins/returns so easily with current high land prices !!

Risks of kenna Privatised Cheaply
Fortunately, Hiap Hoe's current shareholders base is quite large, some 3700 shareholders as at Mar2010,
so threat of forced Delisting due to failure to "meet minimum number of shareholders" is NOT an issue for now.

However as minorities, its also v. important that minorities shareholders collectively, have much more than 10% voting rights
and so in a better position to avoid a Mandatory takeover and delisted too easily and cheaply.

Some of my past holdings that have met with this fate are: Prima, Furama Hotels and EngWah.
Slightly over two years back, the Goh family buyout the 5 cinemas/office properties for $99.48m
specifically Toa Payoh Entertainment Centre (with 61 yrs lease remaining) was buyout for only $28.7m

Last week, Toa Payoh Entertainment Centre (now left with only 58yrs lease) was resold to Hersing for a cool $66m.

Hiap Hoe is on the news of "My Paper" chinese headline, Father and sons fight/disagreement goes to high court. Father propose to delist hiap hoe and distribute $$ to shareholder but sons refuse.

Share price shoot up today and indirectly help Sing Holding a little bit though.

See the following for more information.
http://epaper.mypaper.sg/cnd/fvxcn/fvxp/...2012-03-22

I doubt the sons have the $$$ to delist Hiap Hoe.
So, it is going to be a prolonged tussle.
I will expect some vultures to come in for a chance to get a good feast.

Lesson in life...
One woman is already too much.
Lastly, why leave so much $$$ for the sons???

(22-03-2012, 02:13 PM)yeokiwi Wrote: I doubt the sons have the $$$ to delist Hiap Hoe.
So, it is going to be a prolonged tussle.
I will expect some vultures to come in for a chance to get a good feast.

Well I posed this question about delisting in the last AGM and the son said no plans for delisting. It is not a question of having no money to delist. they can easily go into cahoots with those greedy bankers since the valuation of the company is >$1. Plenty of meat to fest. It's good to have this tussle so that we minority shareholders can enjoy the run up instead of been short change with a low GO.