Hai Leck does not provide breakdown of its profit except for full-year results.
In FY 12, pre-tax profit from projects was $1.42m on turnover of $46m, down from $8m of the preceding financial year when turnover was 38m. In FY12, assets increased to $64m from $38m to provide EPC projects.
Undertaking EPC projects is tough in Singapore as it is getting more onerous to employ foreigners.
It was explained during AGM that a dividend could not be paid because of the investment for EPC projects.
If cash had to be conserved, acquisition of Tele-centre costing $2.75m does not to make good sense. Tele-centre's meagre profit of $0.23m is not going to have an impact.
By the way, Hai Leck sold Tele-centre to Mr Cheng and Mr Lee just before IPO. Was the retaking of Tele-centre by Hai Leck triggered by Mr Lee wanting to sell his stake in Tele-centre?
Glad to see more participate in discussion in this thread.
Management refused to pay a dividend in last FY and the buying back of Tele-centre could be a sign that privatization is near.
A dividend of 0.5c would have only cost 1.6m to the company. HL has no debt and sitting on cash of 48m.
Lee has very small stake in Tele-centre and Cheng should be able to buy him out personally.
Not paying a dividend when the company can well afford will dissuade shareholders from hanging on if and when privatisation is announced.
The slight reduction in cash holdings resulting from the purchase of Tele-centre may not have much influence on shareholders' decisions.
Someone may just plan to have the best of all. Minorities are at their mercy.
I like the fact that Hai Leck is not just expose to O&G but can undertake other civil, marine and utilities engineering projects as well. Where to find an EPC company trading below book value and is net cash?
(26-11-2012, 01:40 PM)propertyinvestor Wrote: [ -> ]I like the fact that Hai Leck is not just expose to O&G but can undertake other civil, marine and utilities engineering projects as well. Where to find an EPC company trading below book value and is net cash?
PEC, Rotary and Hiap Seng also can do that , but on bigger scale.
(26-11-2012, 01:51 PM)Stocker Wrote: [ -> ] (26-11-2012, 01:40 PM)propertyinvestor Wrote: [ -> ]I like the fact that Hai Leck is not just expose to O&G but can undertake other civil, marine and utilities engineering projects as well. Where to find an EPC company trading below book value and is net cash?
PEC, Rotary and Hiap Seng also can do that , but on bigger scale.
But they are not trading below book values(only PEC is). What I forsee is some form of M&A coming in the industry. PEC can swallow up Hai leck anytime. Both companies has synergy to me. They both have projects on the same island too.
A takeover offer of Hai Leck at 26c per share will only cost PEC 85million which is peanuts to them. And they get to expand their capacity and order books at the same time too.
Also agree that some form of M&A is brewing within the ind. BTW , believe Mun Siong is also trading below book val.
HL used to be a sub-con of PEC ( FNA, Tien Siew ).
What do you think of Mun Siong ?
Hai Leck has been associated with Rotary, MTQ and Hiap Seng before.
Rotary and MTQ used to own more than 4% of Hai Leck each. On the other hand, Hai Leck, if my memory still serves me well, used to have a stake in Hiap Seng before its own IPO.
Someone just booked one lot from seller at 0.21.
S$210.00 but minimum brokerage is 25.00 or 40.00 .
Does it make sense ?