Sing Investments & Finance

[CY09]

The share price is due to the perceived unfriendliness of the Singapore non-bank financers. Sing Investment and HL finance do not seem to be shareholder friendly companies. They are family run and these companies are to install family members and relatives for well paying jobs which they otherwise would not be able to find on their own.

The Singapore market inherently seems to have this problem where family run listed Co are shareholder unfriendly, like to milk public investors while installing their family members and friends. There are exceptions to this observations, but these are exceptions.

Its a big problem in SGX but if SGX is to clamp it down, it may mean a lower listing fee. One of the issues I have with the SIngapore model- regulator and profit driven entity are put together

[weijian]

The share price is due to the perceived unfriendliness of the Singapore non-bank financers. Sing Investment and HL finance do not seem to be shareholder friendly companies. They are family run and these companies are to install family members and relatives for well paying jobs which they otherwise would not be able to find on their own.

The Singapore market inherently seems to have this problem where family run listed Co are shareholder unfriendly, like to milk public investors while installing their family members and friends. There are exceptions to this observations, but these are exceptions.

Its a big problem in SGX but if SGX is to clamp it down, it may mean a lower listing fee. One of the issues I have with the SIngapore model- regulator and profit driven entity are put together

hi CY09,

What do you mean by "SGX is to clamp it down"? Did these companies, family owned and appointed their own family members into well paying jobs, violate any listing rules?

Of course, the listing rules are created by SGX. But if we compare these listing rules against those in other exchanges (not created by the exchange operator but by their regulators), do they have rules that "clamp down" on the observations you mentioned?

P.S. for avoidance of doubt, nothing I said above is insinuates to SingInvestments

[CY09]

Japan and Korea exchanges have started "clamping down". There are Jap and Korean listed co share prices/market cap are relatively undervalued. What these exchanges have done is call out companies with this issue, not rectifying them despite a few objections from exchanges, asking them to draw out a plan to enhance value and name/shaming them if they do not follow up.

Instead of listing rules or legal levers, the exchange can use the media to shame such companies. Buying ad space on google chrome, MRT interchanges, busy bus stops or mothership could be an effective lever for regulators. If SGX is reading this, feel free to reach out to me if you have a job opening. I will be interested in such a job with assurance that I will be given enough funds to buy media spaces, the latitude to name/shame despite these companies likely going to top civil servants and political ppl to object and of course, a remeuration package that matches my current civil service job :p

For a few hotel or property listed cos, I would go to the extent of buying ad space to name/shame beside their new launch projects or in the vicinity of the hotel where they are sited like Orchard Road MRT station

[ghchua]

Rather than a logo change, would it be better for non-bank financiers (like Sing Investment and Finance) to emulate what Aeon Credit Services (listed on Bursa Msia) has done across the straits? After all, even after accounting for MYR depreciation, ACS has out-performed SingInvestments and Finance by a mile in terms of share price since GFC2008.

Hi weijian,

Have you taken into account the 1 for 2 bonus issue that Sing Investment and Finance had done last year and the dividends that they have paid out throughout the years? I don't think by just looking at the share price performance alone will give you the whole picture.

Look at the total returns, rather than just the share price. Sing Investment and Finance dividend yield had been consistently around 5%pa to 6%pa thereabouts.

[ghchua]

From chairman's statement in latest annual report:

"DECADE OF SOLID GROWTH
The Group has achieved strong growth over the last decade. Net profit after tax nearly tripled to $33.2 million in 2023 from $11.5 million 10 years ago. We also delivered a stellar 11% compounded annual growth in net profits over the 10-year period. Concurrently, our loan books expanded by 58 % over the same period."

I am just wondering why there are so much negative comments on this family owned business. 11% CAGR over a 10 year period is not a bad number, although if you compared with DBS, then you would be disappointed. 

But would you like to pay 1.5x book value for DBS, or 0.5+x book value for Sing Investments & Finance, bearing in mind that RNAV for Sing Investments & Finance should be higher as their investment properties (including their 17-storey office building at 96 Robinson Road) is carried at cost less depreciation in their balance sheet?

Food for thought.

[CY09]

Hi ghchua,

Earning money is one thing. Sharing money is another. The family behind Sing Investments have been known to be opmi unfriendly. It explains the pricing of the securities

[ghchua]

Hi CY09,

I guess if you track back Sing Investments & Finance dividend track record, they have been increasing their dividend payout as they delivered higher profits. 10 years ago, they paid 5c per share. In 2023, they paid out 10c per share. This year they are proposing to pay 6c per share, but that is after a 1 for 2 bonus issue exercise last year.

I don't see any holding back on dividends when they deliver higher profits. Unless you are looking for a 100% dividend payout company? Banks also don't pay out all their profits as dividends.

[CY09]

Their payout ratio is lower than the 3 main banks

[ghchua]

Their payout ratio is lower than the 3 main banks

Indeed, their payout ratio is lower, but not significantly lower than the 3 local banks. They have been paying around 40+% of their profits, as compared to 50% for the banks.

[LionFlyer]

Their payout ratio is lower than the 3 main banks

Indeed, their payout ratio is lower, but not significantly lower than the 3 local banks. They have been paying around 40+% of their profits, as compared to 50% for the banks.

All things being equal (opmi unfriendly, conservative family owned businesses), HL Finance gives a better payout ratio, among the peers (SingInv, Singapura, IFS C) and is the largest among the SME finance companies.