Wing Tai Holdings

Yeah nobody was forced to accept the offer so don't blame the Chengs for being unfair to minority shareholders. Thankfully I didn't accept. I seriously hope the steep discount to NAV can be narrowed.

August 13 Sale Result
L'Viv
TOP: 2013
Total Number of Units 147
Number of units sold 144
Percentage of sale 97.96%
No unit was sold on August 2013

FORESQUE RESIDENCES
TOP: 2015
Total Number of Units 496
Number of units sold 470
Percentage of sale 95.9%
No unit was sold on August 2013

The Tembusu
TOP: 2nd half of 2017
Total Number of Units 337
Number of units sold 218
Percentage of sale 64.7%
218 units was sold on August 2013
Median Price: S$1,547

Based on the following URL, this project is already 80% sold.

http://tembusucondominium.com/

vested

Was reading through the thread, looking at all the arguments and different sides of the story, Wing Tai seems like a very undervalued company.

P/e of 3.14 and P/b of 0.55 seems like a steal. Even at today's prices of $2.15, the dividend of 12c gives a fantastic yield of more than 5%.
There are many projects TOPing in the next few years, and profits will surely be as good as this year.

But one thing that bothers me after reading the entire thread, it seems like the CEO Cheng Wai Keung and his family have more than 50% stake and is in control of the company, and this poses a problem. Mr Cheng is apparently also a Temasek Director. It seems like the Chengs do not care about minority shareholders, and are able to prevent the true value of the company from ever being realised. They are also able to privatise the company cheaply and cause shareholders to lose money.
Is this true?

Furthermore, the posts about the possibility of share price manipulation, where funds are used to either depress the price or control it when necessary, is very scary to a small time investor like me.

This does not seem like your normal average stock, but has hidden politics and agendas, as even if the company is making big bucks, the end result may not be as straightforward.

Can forum buddies please advice?

(16-09-2013, 09:50 PM)TheMillennium Wrote: Was reading through the thread, looking at all the arguments and different sides of the story, Wing Tai seems like a very undervalued company.

P/e of 3.14 and P/b of 0.55 seems like a steal. Even at today's prices of $2.15, the dividend of 12c gives a fantastic yield of more than 5%.
There are many projects TOPing in the next few years, and profits will surely be as good as this year.

But one thing that bothers me after reading the entire thread, it seems like the CEO Cheng Wai Keung and his family have more than 50% stake and is in control of the company, and this poses a problem. Mr Cheng is apparently also a Temasek Director. It seems like the Chengs do not care about minority shareholders, and are able to prevent the true value of the company from ever being realised. They are also able to privatise the company cheaply and cause shareholders to lose money.
Is this true?

Furthermore, the posts about the possibility of share price manipulation, where funds are used to either depress the price or control it when necessary, is very scary to a small time investor like me.

This does not seem like your normal average stock, but has hidden politics and agendas, as even if the company is making big bucks, the end result may not be as straightforward.

Can forum buddies please advice?

Why bother in fear for stock price to realise its true value. If you know you got it at a bargain, it is worth keeping already.

The chengs will only want to see the price go up in the long run, because that benefits them, as well as everyone who owns the stock.

Inflation has its advantages. If cheap money gets hold of this stock, the people owning them won't be happy as well.

How are the Chengs benefited when the price goes up? They can't sell it anyway.

Even if Wing Tai is traded @1cent, Wing Tai is worth the same to the Chengs.

Even if Wing Tai is traded @10 bucks, Wing Tai is still worth the same to them barring that they sell their stake outright.

The interest is never aligned between the owners and the minority shareholders in terms of share price.

Personally, I find WingTai undervalued at current prices. I may be severely wrong but it is just my opinion.
Comparing it with the other same industry companies, Wing Tai really stands out among them.

The problem is because of past actions such as the partial offer Mr Cheng did before. Many forum members were divided on the pros and cons, and some felt that they were given a bad deal while the others thought otherwise. Even the high dividend this year is seen as Mr Cheng paying himself more fairly instead of the simple reason that the company shares it's profit.
This makes me feel that the management is very crafty and like to play tricks which ultimately will cause all minority shareholders to lose out.

You are simply asking too much from the owners as a minority shareholder. Why would the owners share more than the minority shareholders deserved? The minority shareholders often run at the first sight of trouble. They will not likely support the owners all the way.

Just ask yourself, will you let someone else get a free ride on your tail?

(16-09-2013, 11:01 PM)freedom Wrote: You are simply asking too much from the owners as a minority shareholder. Why would the owners share more than the minority shareholders deserved? The minority shareholders often run at the first sight of trouble. They will not likely support the owners all the way.

Just ask yourself, will you let someone else get a free ride on your tail?

As long as the owners share something with the minority shareholders, it is good enough. Just hope it is not the case of giving you a drumstick and taking back the entire chicken or even more.

Perhaps I should ask in a different way.. Are the Chengs, being more than 50% in control, able to do as they please with absolutely no regard for minority shareholders?
To me, the answer is no. But based on past events, it seems that the answer is not no.

as a minority shareholder, we should set right expectation. If the owners want to share most of the profit with minority shareholders, that's great. If the owners don't want to share, there is almost nothing for minority shareholders to do other than to sell out.

(16-09-2013, 11:28 PM)freedom Wrote: as a minority shareholder, we should set right expectation. If the owners want to share most of the profit with minority shareholders, that's great. If the owners don't want to share, there is almost nothing for minority shareholders to do other than to sell out.

I strongly disagree with the 'resistance is futile' attitude.

From my observations the 2 past failed Offers, k1 Ventures and Eastern Holdings,
the collective resistance from minorities was quite strong AND press coverage were factors that helped to resist the takeover offers.

the response of minorities to an unwelcomed, lowball offers is to:-

- KP to the press early - for press coverage & communications with other minorities
- reach out and respond to other minorities (e.g. get contact from the press. Usually they will help if u are credible) & maybe post at vb forums. Respond even if u hold only 1 lot.
- complain to IDs and the press. Put IDs in the spotlight
- complain about the IFA recommendation and methodology. ESP cockup ones.
- dont do NOTHING (coz Offer acceptances will gain momentum as minorities mop over their helplessness)

finally, undervalued stocks will see relatively more offers. So as value investors, shareholder activism (at various levels) should be part of their investment strategy.
What the use of buying at 50% below valuation when it is compulsory acquired from you at 40% below valuation.