HLH Group Limited (H27) - Hong Lai Huat

[SetsunaSoon]

Anyone looked at this company before?

Investment holding company with two main operations: property developer and agriculture company.

Based on AR FY 2016 (AR FY 2017 should be coming out on April 2018), it has good assest (cash, leasehold land, freehold land and investment property) and it is trading at a discount to NAV.


Link to AR FY 2016:
http://infopub.sgx.com/FileOpen/HLH%20Gr...eID=448020

[Kaimin]

It's not a functioning business. Excluding "Other income" which are fair value gains on its assets, it hasn't had net income for many years. Liquidation would be very profitable but it is unlikely to ever come. The founder owns 15% of the company, and no doubt the directors and the rest of the major stakeholders are golfing buddies. These kinds of senior management would much rather keep the company going and draw their six figure salaries instead of maximising shareholder value by liquidating. Unless there's some catalyst, you're not going to see that net net value.

[SetsunaSoon]

It's not a functioning business. Excluding "Other income" which are fair value gains on its assets, it hasn't had net income for many years. Liquidation would be very profitable but it is unlikely to ever come. The founder owns 15% of the company, and no doubt the directors and the rest of the major stakeholders are golfing buddies. These kinds of senior management would much rather keep the company going and draw their six figure salaries instead of maximising shareholder value by liquidating. Unless there's some catalyst, you're not going to see that net net value.

You are probably right.

I looked at their 2016 and 2015 AR and they both indicated negative operating cash flow.
Looks like a value trap to me.