TSH Corp

[beau]

Walter Schloss approach has been proven, but the strategy needs a full package to success.

A quantitative approach, but only diversifies into <20 stocks, rather than a much broader number, as proven by successful value investor, might invite negative surprises at the end of the day

In the statistic, the de-risk via diversification, is on systemic (market) risk, rather than non-market risk, IIRC.

Sorry but I will have to correct you here.

Systemic (market) risk aka undiversifiable risk is the risk that cannot be diversified away.

Non-market risk aka diversifiable risk is the risk that can be eliminated by diversification.

[CityFarmer]

Profit warning from the company...

TSH Corp warns of net loss in 1HFY15

SINGAPORE (July 15): TSH Corp ( Financial Dashboard) expects to incur a net loss in the first half ended June 30, 2015 due to several main factors.

Among these included a lower gross margin from its consumer electronic products business, lower revenue contributed by its homeland security services business, and the loss from the sale of a property development project.

The diversified entity will disclose further details when it finalises and announces its financial results latest by Aug 14, 2015, it said in a statement to the stock exchange.

TSH Corp ended down 0.1 cent or 1.2% to 8.3 cents, giving it a market capitalisation of $20.44 million.
http://www.theedgemarkets.com/sg/article...oss-1hfy15

[Debronic]

Summary:

TSH Corporation Ltd (“TSH”) should be on the immediate radar screen of investors. Not only does it trade at a steep 20% discount to its net cash position of S$0.099 per share, it recently declared a dividend of S$0.03, which in itself makes up 38% of the last traded price of S$0.079. On top of these, the company has also announced its decision to dispose of its freehold property near Tai Seng MRT, a building it acquired shortly after the GFC in 2009. Our conservative estimates show that if the company successfully disposes of the said property even at a significant discount to current asking prices of similar properties in the vicinity, its net cash position would balloon to S$0.169 or 2.1 times the last traded price! With the company choosing not to take an active approach in the capital-intensive property development business for now, we see limited risk of excessive cash drain threatening its cash pile.

At the current market price of S$0.079, TSH is significantly undervalued. We think it should, at the very least, trade at its existing net cash and short-term securities position of S$0.107, or a 35% premium to its last traded price. An even bigger upside could be realised if TSH succeeds in disposing of its freehold property at our assumed price or better.

Details here: http://stockresearchasia.com/1/post/2016...dends.html

[beau]

I posted in this thread about 10 months ago about TSH, basically that it was ridiculously undervalued. Good things tend to happen to these super cheap quality net nets, be it sudden take-overs or an analyst report to bring attention to the investing public. Another example was HTL International.

TSH has jumped to 9.9 cents as of now.

[beau]

Closed at $0.123 today. According to the article on stockresearchasia, should the sale of its property be successful, net cash position would balloon to S$0.169. Should this be seen as the minimum exit price? Any views?

[ngcheeki]

Further to the announcement made by the Company dated 1 April 2016 in relation to the
reply to the queries raised by the Singapore Exchange Securities Trading Limited (the
“SGX-ST”) regarding the trading activity of the Company, the Board wishes to clarify that it
has come to the Company’s attention that stockresearchasia.com had on 31 March 2016
published a report (“Report”) on its website relating to the Company titled “TSH
Corporation Limited- Classic net-net micro-cap trading at steep discount to net cash,
announces big dividends”.

http://infopub.sgx.com/Apps?A=COW_CorpAn...6Apr16.pdf

[beau]

PROPOSED DISPOSALS OF THE COMPANY'S CONSUMER ELECTRONIC PRODUCTS AND HOMELAND SECURITY SERVICES BUSINESSES

"The Board has also taken into consideration the historical trading performance of the Company’s shares on the SGX-ST and believes that the Proposed Transactions would give shareholders an opportunity to realise the fair value of the Company’s existing businesses."

"In the event that both Wow Disposal and Starmo Disposal take place and are successfully completed, the Company will cease to have any operating business and will be deemed as a cash company under Rule 1017 of the Catalist Rules. The Company will also be subject to Rule 1303(2) of the Catalist Rules where the SGX-ST may at any time suspend trading of the shares of the Company."

"As stated in the Company’s full year results announcement for FY2015 released on 29 February 2016 and announcement dated 1 April 2016, the Company intends to dispose of the Company's freehold industrial land and building which is currently carried at cost less depreciation and its 26.5% shareholdings in Unilink Development Limited which has not generated any income or cash for the past few years. The Company wishes to inform the Shareholders that the intention remains unchanged as of the date of this announcement. As at the date of this announcement, the Company has engaged in preliminary discussions in respect of the disposal of shareholdings in Unilink Development Limited. However no definitive agreement has been entered into by the Company."


http://infopub.sgx.com/FileOpen/proposed...eID=401902

[Debronic]

Follow up post on TSH. Summary:

Since our initial write-up on TSH, the share price has surged, returning a total of 86% in less than 2 months. Our initial estimates pegged the value of the shares to the sum of its existing net cash and short-term securities position of S$0.077 rising to S$0.139 (S$0.0107 and S$0.169 respectively before adjusting for the 3 S cts dividend it had earlier paid) should the freehold property be successfully disposed. Recent developments, however, suggest that our views have been too conservative.

We now see a strong likelihood of the company monetizing all its assets and distributing the resultant proceeds in the mid to near future. Shareholders should realize total proceeds of at least S$0.151 per share should that happen. We remain long at the current price.

Details here: http://stockresearchasia.com/1/post/2016...-come.html

[cif5000]

In 2010, a 10% stake cost the company $1.4m. Previous cost of acquisitions of various stakes can also be traced from previous annual reports (2004, 2006). 

On 19 March 2010, the Company increased its shareholdings in a subsidiary company, Starmo International
Pte Ltd (“Starmo”), from 90% to 100% through the acquisition of the remaining 479,265 ordinary shares in
Starmo from the minority shareholder for a cash consideration of $1,400,000.

In the latest announcement, the company proposed to sell the business (IPT to CEO) for S$3.012 million.

http://infopub.sgx.com/FileOpen/final%20...eID=408716

The Board wishes to announce that the Explomo Disposal will replace the intended Starmo Disposal as announced in the April Announcement. Explomo is the only operating entity of the Company’s homeland security services business. Starmo is an investment holding company which currently holds 100% shareholding interests in Explomo, Explomo Magic Pte Ltd (dormant) and TechnoPlus Pte Ltd (dormant), respectively. It is the intention of the Company to wind up or strike off Starmo, Explomo Magic Pte Ltd and TechnoPlus Pte Ltd after the completion of the Explomo Disposal. Therefore, there will not be any material differences between the proposed disposal of Explomo and Starmo.  

The consideration for the disposal of the Explomo Shares to Anthony shall be at the sum of S$3.012 million ("Consideration"), which shall be payable in cash on the date of the completion of the Explomo Disposal ("Explomo Completion Date"). The Consideration was arrived at after arm's length negotiations on a willing buyer-willing seller basis, taking into account, inter alia, the Valuations (as defined herein) and the net assets value (“NAV”) of Explomo as at 1 April 2016 of S$2.97 million.  

In 2015 Annual Report, the Homeland Security Services segment reported assets of $10,174,801 and liabilities of $1,566,644 (NAV of $8.6m) as of 31 Dec 2015. On 30 April 2016, the NAV was $2.97m. Why such a big difference?

Question: Is this a fair deal?

[ghchua]

The big difference, I suspect is because they took out the cash from the equation. Which means, although the Homeland Security Services segment had an NAV (including cash for the business) of $8.6m (as at 31 Dec 2015), Explomo had an NAV of $2.97m (excluding cash for the business) as at 30 April 2016. This makes sense because the CEO is buying the business and not the cash. If he buys the business with cash, the cash will be returned back to him via capital reduction from TSH anyway. Therefore, it makes no difference whether the cash is retained at TSH company level/Starmo holding company level or in Explomo.