Engro Corporation

[ghchua]

I have been holding this share for more than a decade. It has been traded consistently below its NTA. And imho, it's due to the family feud. Waiting for someone to unlock its value. Or else, it looks like a value trap.

Recent accumulation by Chua Wee Keng is promising.

It is not only this issue that you have bought out. It can be a combination of various factors for a stock to consistently trade below NTA. Like low earnings, lack of PR, lack of media and analyst coverage etc.

I once attended the AGM of this company before. To my surprise, not much public shareholders (excluding their staff) attended the meeting. Besides me, I think there were less than 5 other shareholders from the public. This shows that the market is either not aware or not interested in this company.

Given time, I believe that the market will re-rate the stock as they have started to show improvements in their results as I have detailed above. We just have to be patient.

Also, please note that Chua Wee Keng is not a new shareholder. He had been holding Engro stake at around 5% and thereabouts in the company for quite sometime before aggressively buying the stock in the market lately.

[weijian]

After a good year, it is time for some reversion to the mean.

ANNOUNCEMENT PURSUANT TO RULE 703 OF THE LISTING MANUAL – PROFIT GUIDANCE IN RELATION TO THE GROUP’S FINANCIAL PERFORMANCE FOR FY2022

In 1H2022 interim results announcement, the Group has guided that its China GGBS JVs were expecting poorer performance in 2H2022. In line with the given guidance, the China GGBS JVs experienced a decline in demand and profitability as a result of prolonged disruption to the construction industry brought about by China’s zero-COVID policy, exacerbated by the across-theboard slumping property market in China with demand stalling.

Following the abrupt tech sector slowdown, losses in 2H2022 was attributed significantly to the Group’s venture capital investment unrealized fair value loss, which was a non-cash item. Excluding this, the Group’s operational net profit remains stable.

Despite the above, the fundamentals and the cash position of the Group remain strong.

https://links.sgx.com/FileOpen/Profit%20...eID=744503

[ghchua]

Another value trap?

In truth, it had been another tough year for the company in FY23. China GGBS JVs had been poor, Group’s venture capital investment unrealized fair value loss is still there, though it has narrowed. Company's foray into F&B business had been unsuccessful.

The only bright spot had been their Integral Cement and Ready-Mix Concrete business in Sinapore and Malaysia.

However, cash had been piling up, so the company decided to increase their investments. Despite making a loss for the year, they have decided to declare a final dividend of 3cts per share and a special dividend of 2cts per share to celebrate their 50th anniversary.

https://links.sgx.com/1.0.0/corporate-an...be2a4e8a1b