Isetan Singapore

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From a die hard shareholder point of view, make the discussion more complete I guess

Held since IPO. He should be glad he get to see the end of the tunnel before he himself see the light

Buy and hold forever. Not for me. I prefer Keynes “When facts change I change my mind”

I’m just a spectator to learn something from the episode.

(16-04-2024, 07:10 PM)specuvestor Wrote: Hi ghchua

The idea of franked dividends is so that company can only pay dividends out of profits that they paid tax, unlike currently like you mentioned you can pay dividend out of profit even without paying tax from tax accounting. So yes they made a lot of taxed profits in the past but chose not to pay out to OPMI but subsequently bits of dividends under the non S44 regime. Whether retaining make sense or not will depend on what is your interpretation of a holding company discount.

So if you held it from the S44 days till before the privatisation you probably double your money over ~25 years or 100% MTD depends how you wanna calculate it. I'm not sure about your interest in this but I do remember the frustrated OPMI at the AGM Smile

In any case this privatisation is a close of this chapter and an interesting lesson for me while also highlighting that Japan culture and ethos is really changing in midst of Nikkei hitting all time high.

(16-04-2024, 05:07 AM)ghchua Wrote: Hi specuvestor,

(15-04-2024, 11:00 PM)specuvestor Wrote: My memory of Isetan is one that forfeited one of the most Section 44 Franked credits because paying dividends will incur a lot more tax for the holdco in Japan. Despite all the protests from minorities during AGM and many other companies demonstrating issuing dividends and raising rights to replace the cash outflow.

I think I have replied to you previously on the part about tax credits. Isetan Singapore did paid out some of them eventually via dividend. The fact that it managed to accumulate so much tax credit meant that it is not a bad company. If a company keeps on losing money, how could it had accumulated so much tax credits throughout the years?

And even if they paid out little dividends, profits will be retained in the company, which results in increase in NAV/RNAV. That will all be taken into consideration when IFA determines whether the scheme is "Fair and Reasonable" or not.

But if you look at the actual fact, recent years they have been barely profitable or making losses. That resulted in accumulated losses which meant that they could not pay out dividends unless they are profitable within a financial year. So recent years of low dividends is because of their performance, and not because that they purposely hold back dividends due to any other reasons.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)

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