Metro Holdings

[weijian]

hi chaosdiablo,
I do nt hv any interest or past vested exp in metro or other property counters. so I m afraid I m to give any "enlightenment" here.

[KopiKat]

17 million??? But if don't divest, the stake is worth more as of today........

Metro divested the 27% and JO had a total remeneration of S$17 millions for that year.

Stocker Wrote: Now the 27% is worth around S$1 Billion.

So, why so much pay for making such a bad decision???

The questions you may want to ask is,

1) Would Henry and Jannie Tay have worked as hard to make Hour Glass a success if they were not in full control? If not, Hour Glass may have remained a tiny operation and not be worth as much.

2) Would Henry and Jannie Tay have left to start another similar biz if Metro had not divested their stake to them? If so, same outcome as (1), worst case, maybe Hour Glass can't even compete / survive against Henry/Jannie Tay's new biz.

3) What did Metro do with the cash raised from this divestment (besides paying JO / his late father) a huge bonus? Did they use it to generate better/good/no returns? It'd appear that their strength is in properties and largely in China. Without the cash, they may not have been in the right place and right time to make all those investments in a China that was just starting to boom.

If you can answer the above, then we'd perhaps be better able to understand whether it's a good / bad decision.

Having said the above in defence of Metro, I'm also deadly against the controlling shareholders which'd been heavily rewarding themselves with huge bonuses (everytime they divest any asset and realise profits) and bringing in the 3rd generations into the company to bring continuity to enjoy this bonus scheme. Altho' shareholders do get paid a dividend plus the occassional special dividends, I see the 'O' family getting a much larger share.

I was vested aro' 2003-2007 from 50ct-70ct but I finally divested my last lot just below $1 (it did go above $1 after I sold). During that period, we were having one of the best and longest bull run here and Metro's value continued to be locked, except only to the controlling family (via huge bonuses). What I'd love to see here is someone like Oei Hong Leong coming in to buy at least a 20% stake to help unlock value, if I were to become vested again.

[chaosdiablo]

Hi,

It is ok...we just learn from each other and we have our own opinion. So, I think it is fine....

I think owner of St****** is more generous to retail investor compared to Metro as shown in Cougar and Sp shipping....

hi chaosdiablo,
I do nt hv any interest or past vested exp in metro or other property counters. so I m afraid I m to give any "enlightenment" here.

---

[Stocker]

The fact is the present shareholder fund of Metro is also around 1 biilion, almost same value as the 27 % stake in NAC. Metro divested this 27% in 2004/5.
Metro entered China property market in 1993 , owing Metro city and Metro towers in Shanghai, GIA building in Guanzhou , long before this divestment.
So it is not that difficult to judge the divestment was good or bad for the company.
But for those who are in the stock market long enough, should know why Ong cho kim had to made this decision.

[KopiKat]

The fact is the present shareholder fund of Metro is also around 1 biilion, almost same value as the 27 % stake in NAC. Metro divested this 27% in 2004/5.
Metro entered China property market in 1993 , owing Metro city and Metro towers in Shanghai, GIA building in Guanzhou , long before this divestment.
So it is not that difficult to judge the divestment was good or bad for the company.
But for those who are in the stock market long enough, should know why Ong cho kim had to made this decision.

I think some miscommunication here?

I thot' we were talking abt Hour Glass divestment which was done in 1988. See the sequence of post in pg8 of this thread,

Post #73

Just found out also, over the weekend, that Metro was an early stage investor in The Hour Glass, but sold its stake back to the founders before they listed it.

Post #74

Metro divested the 27% and JO had a total remeneration of S$17 millions for that year.

Now, I realised we are talking abt NAC (Ngee Ann City) divestment!

For those who're keen to analyse the rights and wrongs of Metro using Hindsight Analysis, can refer to the sequence of events fm their website,

http://www.metroholdings.com.sg/about_hi...tones.html

[Jared Seah]

LOL!

Loved your word within word. Touche!

Although I am not vested in Metro, it's the first company I worked in. I worked in Metro Orchard on the selling floor.

There was a time when Metro is Singapore!

Came back and found Metro Paragon still operating. So wonderful to see some of the seniors still working there. Good they still keep this retail operation although its no longer a big part of their strategy. Hope no shareholders will clamour to divest the retail arm to "unlock" value... Fantastic Metro stiill remembers their retail roots.

http://singaporemanofleisure.blogspot.co...-your.html

Working in Shanghai, I was pleasntly surprised to find their Metro city in XuJiaHui is sitting on a property goldmine! Its a popular landmark of XuJiaHui - the iconic glass ball thing. I wonder was it luck or foresight that got them invested early? When my shanghai friends said XuJiaHui then was just some ulu fringe area...

How about taking some money off the table when China properties looked a bit frothy?

Why buy a dog and bark yourself?

[chaosdiablo]

This is what I mean...don't do anything, still the same and well......

The fact is the present shareholder fund of Metro is also around 1 biilion, almost same value as the 27 % stake in NAC. Metro divested this 27% in 2004/5.
Metro entered China property market in 1993 , owing Metro city and Metro towers in Shanghai, GIA building in Guanzhou , long before this divestment.
So it is not that difficult to judge the divestment was good or bad for the company.
But for those who are in the stock market long enough, should know why Ong cho kim had to made this decision.

[Stocker]

This one seems to be in accumulation mode lately.

[Stocker]

This one seems to be in accumulation mode lately.

[yanziyang]

After invest in this counter for more than one year, I totally divest it recently around S$0.72.

Reason of divest:

1. The divestment of Metro City Beijing may not success (personally, I feel the chance become very slim 7 months after initial announcement). Below is the abstracted message from Q3 report:

As at 31 December 2011, assets and liabilities relating to a jointly controlled entity, Beijing Huamao Property Co. Ltd. (“Huamao”), which owns Metro City Beijing, have been designated as held for sale, as the Group has entered into a conditional equity transfer framework agreement to sell its 50% equity interest held. Completion of the sale and purchase of Huamao is subject to the fulfillment of conditions precedent including the approval of various authorities in the People’s Republic of China. Whilst certain approvals have since been obtained, there is no certainty that all conditions precedent will be fulfilled and there continues to be a risk of non-completion.

2. According to Q3 report page two, nine month profit attributable to share holder is S$9.7 million only. Compare with market cap of S$580 million, the profit feature is not satisfactory (subjective to each individual's judgement).

3. It is true that metro has huge cash. But those cash seems just sit in bank account and not generate much cash flow. Given the high inflation of China and Singapore, the purchasing power of cash is shrinking quickly.

4. Singapore dollar seems keep appreciating against RMB.

5. Bubble of Chinese commercial properties is likely to burst in 1 to 2 years due to oversupply in the pipeline, according to article published on China's web site.

6. Limited upside. It is possible that property value will be revalued 3-5% above last year's valuation.

Disclaimer: Every transaction requires a buy and a seller. Those buyers have their own rationale to buy. Above is my personal opinion only.