Hong Leong Finance

[mrEngineer]

I got the same feedback as Stocker when my company tried to do a deal with hong Leong Singapore and hong Leong Malaysia. They are separate entities and will never merge because of internal affairs. Maybe the 3rd generation would, but nobody knows

[Stocker]

In biz, nothing is permanent except interest. If there are monies on the table to be shared , bitter enemies can shake hand also.

[propertyinvestor]

I find HLF still to be deeply undervalued even at this price. Pure cashflow business with no debts other than deposits with customers

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What you posted may be true during Mahathir's time when UMNO was extremely dominant in Malaysia. In today's context, where the oppositions is now rather strong, I doubt that their government would want to commit 'political suicide' by doing what you'd posted.

HLBank became the No.4 Bank (by Assets and Market Cap) last year after their acquisition of EON Bank. PBank was No.3. These 2 Chinese controlled banks looks set to survive any further consolidation in the Malaysia Banking scene. Perhaps they may even merge to become the No.1 Bank!

As for the Lim and Tan report on the possibility of HLBank acquiring/merging with HLFin, it does make some sense if HLBank is really aggressively expanding their biz. But then again, I'm speaking from a vested view point.

You did be surprised how greedy these malaysians politicians are. Robert Kuok was so fed up when his sugar empire in malaysia was gobbled that he did not want to invest in malaysia anymore and instead plump in 1 billion worth of investments in Indonesia. Needless to say also a lot into china.

My sis used to work for a chinese malaysian bank and has since been gobbled up by a bumi bank at a cheap price!!She thinks it is just a matter of time before all the chinese owned banks are gobbled up.

Looks like you have not fully digest what Stocker said in his thread. HL bank buying over HLF ain;t going to happen. dream on.....

Robert Kuok was pissed with Najib becos he was forced to sell MSM to FELDA at a cheap price. So he has parked his money in SG by buying Allgreen and using Wilmar to buy SucroGen in Aussie. Sucrogen Exports raw sugar to Malaysia.

Robert Kuok is smart, he can screw back Najib by jacking up raw sugar prices!

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I used to own HLF for probably close to 10 years until I decided to cut it off last year. Including dividends I probably make only about 1% compounded over the years. dead money.

As far as i am concerned HLF is a Value Trap. All these while HLF was selling cheap wrt to the other 3 banks. I was hoping that KLB would sell it off to realised the valuation gap. There were 2 times when he could have sold it but after several post-AGM conversations with KLB I don't think he will ever sell it although he said at the right price he will.If you ask for some ridiculous high price, it's as good as not offering at all.One time was when MAS was giving away QFB to the foreign banks and HLF would be a good entry for them. this was before the 08 crisis of course. another time would be during the crisis when his property empire needs the cash.The reason why he will never sell it is the same as WCY with his Haw Par(another valuation trap). he needs the "bank" to support his property development. Notice that with CDL launched projects they naturally push HLF for loans.In itself is not bad except that HLF could give favorable rates to property buyers....not so good for HLF profitability.

another reason why I finally throw in the towel is that KLB is the CEO and he award himself with generous stock options. he already owns a sizeable chunk of the company. Does he need more stock options to motivate himself to drive the company higher.In the long run minority shareholders gets diluted and he gets more and more of the company.

yes base on valuation HLF is cheap but if you are buying to hold I would advise against it. However if you are buying to capture the cyclical upturn, you are better off buying any of the 3 banks. when the funds comes back they will go for the index banks and HLF will later be pull up along but at a slower pace.

just my 2 cents worth. not vested in any of the counters mentioned.

At least this value trap is better than San Teh Value trap

[dydx]

I thought HLF's latest announcement (dated 17Feb12) on achieving full sponsorship status for the SGX Catalist Board is quite significant.....
http://info.sgx.com/webcoranncatth.nsf/V...700384179/$file/HLF_Press_Release_Catalist_Sponsor.pdf?openelement
The enhanced status should help bring in more fee business to HLF over time. We should note that being a large and active lender to local SMEs, HLF is already quite well placed to offer corporate finance and IPO services to this sector. A full sponsorship status for the Catalist Board will extend HLF's services to cover the post-IPO portion for those companies already or to be listed on the Catalist Board.

HLF is due to announce its FY11 full-year results in the next few days. I hope HLF will kep its Final dividend at $0.08/share (unchanged from last FY10's).

Based on HLF's latest (as at 30Sep11) NAV/share of $3.57, I suppose the last done share price at $2.44 does indicate a situation of rather acute under-pricing by Mr Market.

[KopiKat]

I thought HLF's latest announcement (dated 17Feb12) on achieving full sponsorship status for the SGX Catalist Board is quite significant.....
http://info.sgx.com/webcoranncatth.nsf/V...700384179/$file/HLF_Press_Release_Catalist_Sponsor.pdf?openelement
The enhanced status should help bring in more fee business to HLF over time. We should note that being a large and active lender to local SMEs, HLF is already quite well placed to offer corporate finance and IPO services to this sector. A full sponsorship status for the Catalist Board will extend HLF's services to cover the post-IPO portion for those companies already or to be listed on the Catalist Board.

HLF is due to announce its FY11 full-year results in the next few days. I hope HLF will kep its Final dividend at $0.08/share (unchanged from last FY10's).

Based on HLF's latest (as at 30Sep11) NAV/share of $3.57, I suppose the last done share price at $2.44 does indicate a situation of rather acute under-pricing by Mr Market.

FY11 EPS should be easily aro' 23ct-24ct (I'm not expecting any huge negative surprise ie. huge bad debts, since DBS and OCBC had already announced their results w/o such). Even if they were to just do a 50% payout, I don't expect them paying 8ct div for 2H11 (1H already paid 4ct) to be a problem. I'm dreamimg of more as they used to do a higher payout before they were hit by the Lehmen Mini-Bonds and had to do write-offs. Hey! No point skimping on our yield since they're not doing any aggressive expansion activities, right?

[propertyinvestor]

This is a good finance stock for sure!

[KopiKat]

I thought HLF's latest announcement (dated 17Feb12) on achieving full sponsorship status for the SGX Catalist Board is quite significant.....
http://info.sgx.com/webcoranncatth.nsf/V...700384179/$file/HLF_Press_Release_Catalist_Sponsor.pdf?openelement
The enhanced status should help bring in more fee business to HLF over time. We should note that being a large and active lender to local SMEs, HLF is already quite well placed to offer corporate finance and IPO services to this sector. A full sponsorship status for the Catalist Board will extend HLF's services to cover the post-IPO portion for those companies already or to be listed on the Catalist Board.

HLF is due to announce its FY11 full-year results in the next few days. I hope HLF will kep its Final dividend at $0.08/share (unchanged from last FY10's).

Based on HLF's latest (as at 30Sep11) NAV/share of $3.57, I suppose the last done share price at $2.44 does indicate a situation of rather acute under-pricing by Mr Market.

FY11 EPS should be easily aro' 23ct-24ct (I'm not expecting any huge negative surprise ie. huge bad debts, since DBS and OCBC had already announced their results w/o such). Even if they were to just do a 50% payout, I don't expect them paying 8ct div for 2H11 (1H already paid 4ct) to be a problem. I'm dreamimg of more as they used to do a higher payout before they were hit by the Lehmen Mini-Bonds and had to do write-offs. Hey! No point skimping on our yield since they're not doing any aggressive expansion activities, right?

Aw shucks... UOB just announced their results.. They do have a 'can of worms'. Extracts from CNA,

UOB Group's net profit dropped 21 per cent last quarter to S$558 million, after it sold down its portfolio of European debt at a loss.

Like its Singapore counterparts DBS and OCBC, UOB predicts a slowdown in lending in 2012.

According to UOB, European bank exposure has been pared to S$629 million, from S$1.5 billion in June last year.

For the full year, UOB's net profit was down 14 per cent to S$2.3 billion, a poorer showing compared to its peers.

OCBC saw net profit inch up 3 per cent to S$2.3 billion, while DBS grew its net profit 15 per cent to more than S$3 billion.

But going into 2012, UOB may be in the best position among the three local banks to capitalise on US dollar funding tightness.

UOB has a lower US dollar loans-to-deposit ratio of 98.7 per cent, compared to around 160 per cent for OCBC and DBS.

That means it should have easier access to a limited pool of US dollar funding.

[freedom]

as Hong Leong Finance is a finance company, it can only has little to none exposure to foreign market. Its lending mostly concentrates on local companies and secured loan only. And as a finance company, it can only has limited exposure to forex, probably might not have USD loan as well.


slowdown in lending is expected, as loan grew quite a lot in the last 2 years, and the net interest margin is so depressed, it probably does not make more sense to push for more loans.

[KopiKat]

FY11 results will be out tomorrow (28-Feb). Time for a spot of fun and crystal ball gazing again.

EPS should be ~23ct. I consider it to be flat (vs FY10 EPS = 27.7ct) if I were to remove the write backs (of provisions) for FY10. Don't ask me when their SME initiatives are going to start bearing fruits as I see their Revenues dropping every year since FY07. Too bad they'd not been aggressive in the Home Loan market and had not ridden the Property Bull, unlike the Big 3.

Dividends for 2H11 is hard to gaze from my Crystal Ball as I don't see any pattern in their payout for the past 6 years. I'm guessing the minimum to be 8ct (same as last year) but I'm dreaming that they can pay up to 100% of EPS, which is 19ct (4ct paid out for 1H). Ya, someone said to me before.. dream on...

[freedom]

revenue dropping every year since FY07 is expected. 2008 is the start of all the money printing, interest suppression. interest rate has been off the normal since 2008. Til interest rate back to norm, it is difficult to see revenue increasing without bearing higher risk. lower interest does not lead to lower risk, instead, it encourages higher risk appetite from the borrowers, meaning higher risk for the lenders.

the cost of deposits for finance company is significantly higher than the big 3. and during bad time such as since 2008, the big 3 also go to SMEs for loan growth, in a way, to squeeze the local finance companies (Hong Leong Finance/Singapura Finance/Sing Investment & Finance). It is not an easy environment for finance companies when the local full banks are competing with you.