OSK Holdings

[Behappyalways]

As of May 2013......

1. 245m RHB Capital Berhad (RHBC)
2. 24 storey Plaza OSK (2012 Book Value RM157m)
3. 1.4 acre prime land(formerly housed Tai Thong Royal China Restaurant) next to office block in Jalan Ampang, Kuala Lumpur being developed into retail and commercial property with gross development value of RM1billion. (2012 Book Value RM149m)

At RM8.41(May 2013), 245m RHBC shares are worth RM2.06bilion - larger than OSK's market cap of RM1.52b at closing price RM1.54 (May 2013)

As of 8 Jan 2014

1. 252m RHBC (due to scrip dividend) -9.91% stake

RHBC share price is RM7.97. OSK share price is RM1.63.

Not Vested


http://investideas.net/forum/index.php?s...dbe30cfead

[i4value]

OSK – is this really a property developer?

OSK Holdings carried out a corporate exercise in 2014, to merge PJ Development Holdings Berhad  and OSK Property Holdings Berhad into the group. Effectively OSK Holdings is now a property counter with property development & construction, investment properties and some manufacturing as it main operations.

But is this really the case? When you look at its profit profile as shown in the chart, you will find that the bigger contributor over the past 9 years was not from its operations. The non-operating segment - its investments in RHB bank - accounted for a bigger part of its profits.



So, is this a property company or something else? If you are thinking of investing in OSK, shouldn’t you be looking at the performance of the Malaysian banking sector rather than the property sector?

[weijian]

hi i4value,

I think OSK Holdings is neither a property company nor banking proxy. Rather, I think it is Tan Sri Ong's company.

Rather than positioning ourselves (minority investors) at the holding level of the company, would it be better for us to position ourselves at the investee/subsidiary level? After all, any kind of benefits from investee/subsidiary to the holding company parent, will also flow towards to minority positioned at investee/subsidiary. But if the minority is positioned at the parent, then it may not necessarily be so.

[i4value]

I hope you realize that if you see OSK as Tan Sri Ong's company, a lot of the counters on Bursa Malaysia is also someone else company. Think of Guocoland and Tan Sri Quek's company, IOI as Tan Sri Lee's company and KLK and Tan Sri Lee Oi Hean's company. I guess one way to handle this is to see yourself as riding on the coattails of the "controlling" shareholder.

[weijian]

Hi i4value,

Unlike listed entities in the western part of the world, most listed entities in Asia are either government or family owned enterprises. So when I mentioned "OSK as Tan Sri Ong's company", it does not mean that it is family owned by some Patriarch. So I apologize for the confusion.

To clarify, when I say "AA company is BB's company", it simply means a few things below:

(1) AA company is been used to gather assets/business interests on BB's behalf and aspiration, and/or
(2) BB is getting home more from salaries via AA, than dividends declared from AA.

For OSK case, I can't say Tan Sri hasn't share much. I remember I did a quick review a few days back and saw that it paid a considerable interim dividend, although that "special interim dividend" is coincidentally close to an EGM voting for OSK Holdings to buy over his stake in related entities. But then again, I cannot say he has shared much. If I were to compare Tan Sri's OSK Holdings (once a brokerage and listed on Bursa Msia) with GK Goh (also once a brokerage and listed on SGX), it would be nothing close.

[i4value]

A lot of the Bursa companies don't really share their strategies. In fact most have lots more write-up on ESG than on the MDA. It is a very sad state of affairs.

[weijian]

A lot of the Bursa companies don't really share their strategies. In fact most have lots more write-up on ESG than on the MDA. It is a very sad state of affairs.

Hi i4value,

I do not share your pessimism. While more MDA sharing facilities fundamental analysis by the investor, but it does so for everyone. It is Buffett's analogy of everyone tip toe-ing to watch the concert and end of the day, everyone gets tired legs but no1 has a better view.

Less MDA may actually be good, for the thoughtful/resourceful investor.