(16-08-2023, 10:42 AM)weijian Wrote: [ -> ]@dreamybear,
The 2 founders bought out their ex-partner's 12% stake for 28cents - translating to around 10mil outlay. With this special interim dividend of ~11mil where they will be entitled 76% of, the proceeds can foot the majority of their 10mil bill. This mode of operation is not unlike many unsuccessful Mgt take-overs which eventually had to declare dividends to pay back their bridging loans used in the takeover.
Thanks for your reply.
Yes I am aware of this mode of operation. However, we are talking abt using 1/3 of the cash in possibly the next "sea change" environment. Why not use lesser e.g. 1/4 ? Cash flow is like the lifeblood of the company, and cash hoard its reserve blood bags ? (if I may put it that way). I believe HPIL is still a small player compared to the likes of Zuellig, DSKH, etc. Landing new distributionship from principals and expanding to more countries is quite capital intensive, involving "hits and misses". Also, how much firepower does that leave for accretive and sensible M&A to improve its profit margins ? Then there is the expansion plans for the digital healthcare platform. (
https://media.licdn.com/dms/document/med...iItmnHGWrE)
That said, I believe OPMIs are not complaining abt the present.
It remains to be seen how fast the cash hoard can be replenished.
Back to the mode of operation, I am getting rather concerned about more companies following a certain method practiced by a certain company - high pay and no dividends, to avoid sharing cash with OPMI. Is there anything that can prevent this practice ?
ED Tan was appted by idsMED on 1 May 2023* which was very shortly after HPIL AGM, which suggests it cld be a planned move. With ED Tan's previous HPIL stake, a mere 10 cents share price increase in the event of HPIL's future improved financial performance will net a cool few million dollars. This is excluding dividends as well as his ED remuneration. I think it is likely that he sold off to prevent a conflict of interest which seems a lot to give up for such a move and also considering he could have retained a small stake even if he retires.
*idsMED Group Appoints Mr. Tan Chwee Choon as the New Regional Director In-Charge of Vietnam
https://www.idsmed.com/news/idsmed-group.../1215.html
Vietnam's Real Estate just COLLAPSED! (goes Terribly WRONG)
https://www.youtube.com/watch?v=ZACF150vToE
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@dydx : Glad that you have joined the discussion for this stock. Hopefully HPIL interests you enough to continue sharing your wisdom and keen insights. It will be very much appreciated.
Yes, 2Q23 revenue has regained back to 2Q22 level*(which may/cld have been an exceptional year for HPIL going by past records), while PAT was a tad lower.
*HPIL 1H2023 Briefing (pg9)
https://links.sgx.com/FileOpen/Hyphens%2...eID=769590
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pricing power concerns ?
What you should know about Hyphen Pharma Latest Result
https://www.investingnote.com/posts/2665342 (emphasis added)
"...
Challenges Ahead:
- Mr. Lim See Wah, the Executive Chairman and CEO, commented on the challenging macroeconomic environment that has impacted their business, including supply chain disruptions. Although these disruptions are being actively managed, the
repercussions are expected to linger into the latter half of 2023.
- It
proved to be difficult to pass the increased cost to the customers...."
Do note the interesting comments on the above post :
"...
Company seemed unable to command a premium for its goods & services as shown by its low single digit PAT margins. Its strategies of growing their distribution portfolio are not likely to bear any fruit to improve its bottom line as the market the company is operating in is highly competitive and the company’s products & services do not offer any compelling differentiation from the rest of the market....
....The company needs to dig deep into the ecosystem it is operating in to uncover where the value resides and craft out appropriate business models to fully extract this value. Otherwise, it will be unable to break out of the shackles of mediocrity...."
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Also warmly welcome other VBs to join in the discussion.