G. K. Goh Holdings

[ghchua]

Hi weijian,

If you analyze this company itself, it can be spilt into 2 main parts:

1. Operating assets, mainly aged care (not only healthcare assets in general) and corporate services (i.e. Broadroom) - Around 60% of the asset base
2. Non operating assets, mainly short and long term investments - Around 40% of the asset base

So, we cannot be saying that we are "left" with mainly operating assets and ignore those non operating ones. Yes, GK Goh had divested a lot of their investments in the past and we have to be patient for future unlocking plans. Opal and Boardroom are cash generative businesses and even if they do not sell them in the near future, I believe dividends received from these assets will provide decent cash flow for the company. As for Allium, it is a new asset and time is needed for it to prove its worth especially during these tough Covid-19 times.

Why aged care and corporate services then? Well, if you trace back from their past investments both in their private vehicle and public front, you would have known that they owned Orange Valley and a brokerage firm previously. So, they are not new to businesses in these sectors. Which is why they have owned a controlling stake in these businesses that they are familiar with, while investing in assets in most other sectors via non operating assets which they have no control. Its a neat 60:40 balanced allocation approach which I believed will bear fruit in times to come.

One just need to be patient for their operating assets to ride out cycles while waiting for them to unlock non operating assets at the right opportunities.

[weijian]

hi ghchua,

I have to apologize that I had "conveniently" left out the nameless 40% of assets grouped as short/long term assets.

The Gohs have invested in shophouses, freehold land in malaysia, malaysian property players, worker dorms just to name a few more. Yes, they are proven astute capital allocators. When they lose money, they have also admitted their mistakes with candor. More importantly, they have demonstrated a track record of willing to share these gains with OPMIs via special dividends. Using specuvestor's ABS framework, they pass the "structure" portion of the business with flying colors i would say.

We are probably aligned on the quality and long term prospects of its current flagship assets (healthcare and share registrar services).

[pianist]

Staying in aged care home like opal is a comfortable premium community living for the aged and it seems quite common in Australia compared to contrasting Asian values. however I have also noted elderlys in Australia tend to divest cash out their sub urban big houses to move to city living for convenience and access to amenities instead of staying in aged care homes

[pianist]

gkgoh in possible talk to divest its 'wholly owned' subsidiary boardroom. boardroom (previously listed) was just privatised by the gkgoh not too long ago at 88cents and so fast they are now thinking to sell off boardroom. what could be the rationale to sell off their most prized cashcow?

[Shiyi]

gkgoh in possible talk to divest its 'wholly owned' subsidiary boardroom. boardroom (previously listed) was just privatised by the gkgoh not too long ago at 88cents and so fast they are now thinking to sell off boardroom. what could be the rationale to sell off their most prized cashcow?

Boardroom was valued at S$184 million when GKgoh took it private.
And Bloomberg quoted sources as saying that Boardroom can fetch about US$300 m.

That could be the reason why GKGoh is looking to sell.

[pianist]

gkgoh in possible talk to divest its 'wholly owned' subsidiary boardroom. boardroom (previously listed) was just privatised by the gkgoh not too long ago at 88cents and so fast they are now thinking to sell off boardroom. what could be the rationale to sell off their most prized cashcow?

Boardroom was valued at S$184 million when GKgoh took it private.
And Bloomberg quoted sources as saying that Boardroom can fetch about US$300 m.

That could be the reason why GKGoh is looking to sell.

I see. Care to paste the news here? Anyone still holding onto boardroom shares?

[ghchua]

Hi pianist,

Some report here:
https://www.theedgesingapore.com/news/co...-us300-mil

As for the reason why they are looking to sell one of their operating businesses, I think if you track back through the years, the company had not been shy in divesting assets when they deem that the offer is attractive and rewarding long term shareholders with special dividends. They have divested their core brokerage business last time and also their futures business, just to name a few. I guess as an investment holding company, they have a duty to deliver returns to shareholders and if divesting an asset at a good price achieved a higher ROI than holding it for long term, I think it makes sense.

Privatization of Boardroom in 2019 and trying to sell it now? I think you have to look at things from the perspective of an operating asset. They are not flipping Boardroom if that is what you are trying to ask. They have been controlling Boardroom even when it was listed before buying up a small percentage of minority shareholders to delist it due to SGX free float rule. But if you track back when they first bought a stake in it, they have been holding the asset for quite sometime.

[pianist]

Hi pianist,

Some report here:
https://www.theedgesingapore.com/news/co...-us300-mil

As for the reason why they are looking to sell one of their operating businesses, I think if you track back through the years, the company had not been shy in divesting assets when they deem that the offer is attractive and rewarding long term shareholders with special dividends. They have divested their core brokerage business last time and also their futures business, just to name a few. I guess as an investment holding company, they have a duty to deliver returns to shareholders and if divesting an asset at a good price achieved a higher ROI than holding it for long term, I think it makes sense.

Privatization of Boardroom in 2019 and trying to sell it now? I think you have to look at things from the perspective of an operating asset. They are not flipping Boardroom if that is what you are trying to ask. They have been controlling Boardroom even when it was listed before buying up a small percentage of minority shareholders to delist it due to SGX free float rule. But if you track back when they first bought a stake in it, they have been holding the asset for quite sometime.

alrite, today i have fully divested my gkgoh shares
whilast for my existing boardroom shares, since it is unlisted, i just leave it to the goh to execute whatever its best for the boardroom's shareholders.
it has been a pleasure holding onto boardroom even as it is unlisted shares, still get to enjoy the consistent dividends after its privatisation albeit it is short-lived if this transaction were to pass through

[BlueKelah]

Hi pianist,

Some report here:
https://www.theedgesingapore.com/news/co...-us300-mil

As for the reason why they are looking to sell one of their operating businesses, I think if you track back through the years, the company had not been shy in divesting assets when they deem that the offer is attractive and rewarding long term shareholders with special dividends. They have divested their core brokerage business last time and also their futures business, just to name a few. I guess as an investment holding company, they have a duty to deliver returns to shareholders and if divesting an asset at a good price achieved a higher ROI than holding it for long term, I think it makes sense.

Privatization of Boardroom in 2019 and trying to sell it now? I think you have to look at things from the perspective of an operating asset. They are not flipping Boardroom if that is what you are trying to ask. They have been controlling Boardroom even when it was listed before buying up a small percentage of minority shareholders to delist it due to SGX free float rule. But if you track back when they first bought a stake in it, they have been holding the asset for quite sometime.

alrite, today i have fully divested my gkgoh shares
whilast for my existing boardroom shares, since it is unlisted, i just leave it to the goh to execute whatever its best for the boardroom's shareholders.
it has been a pleasure holding onto boardroom even as it is unlisted shares, still get to enjoy the consistent dividends after its privatisation albeit it is short-lived if this transaction were to pass through

I was just planning to buy this for a punt. NAV is $1 plus rite? and Boardroom divest will be 60c extra added to NAV. then they will give mega dividend. 

What is the reason you are selling instead of HODL for the payout?  Do you think this is just a news and they wont actually sell it?

[pianist]

Hi pianist,

Some report here:
https://www.theedgesingapore.com/news/co...-us300-mil

As for the reason why they are looking to sell one of their operating businesses, I think if you track back through the years, the company had not been shy in divesting assets when they deem that the offer is attractive and rewarding long term shareholders with special dividends. They have divested their core brokerage business last time and also their futures business, just to name a few. I guess as an investment holding company, they have a duty to deliver returns to shareholders and if divesting an asset at a good price achieved a higher ROI than holding it for long term, I think it makes sense.

Privatization of Boardroom in 2019 and trying to sell it now? I think you have to look at things from the perspective of an operating asset. They are not flipping Boardroom if that is what you are trying to ask. They have been controlling Boardroom even when it was listed before buying up a small percentage of minority shareholders to delist it due to SGX free float rule. But if you track back when they first bought a stake in it, they have been holding the asset for quite sometime.

alrite, today i have fully divested my gkgoh shares
whilast for my existing boardroom shares, since it is unlisted, i just leave it to the goh to execute whatever its best for the boardroom's shareholders.
it has been a pleasure holding onto boardroom even as it is unlisted shares, still get to enjoy the consistent dividends after its privatisation albeit it is short-lived if this transaction were to pass through

I was just planning to buy this for a punt. NAV is $1 plus rite? and Boardroom divest will be 60c extra added to NAV. then they will give mega dividend. 

What is the reason you are selling instead of HODL for the payout?  Do you think this is just a news and they wont actually sell it?

I may buy this for a punt as well. I sold mainly it mainly gkgoh other mix of portfolio didn't really excite me