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The circular and IFA opinion has been released and a couple of interesting stuff.
(1) Regardless of listing status, the dividend policy and disclosure requirements will be very similar. Besides the Company Act, OPMIs holding GEH as an unlisted company are also "protected" by the FHA Act on paper as well. But in practice, OPMIs who may hold unlisted GEH shares are ultimately protected by the fact that OCBC is listed and has a reputation to defend/protect.
(2) A shareholder of GEH gets ~1-1.50sgd increase in embedded value per year. And adding the dividend yield of ~4%, the paper return is a 9-12% sort of annual return. But in practice, the only folks who can monetize those returns are OCBC and the descendants of some trust/estate of your ancestors.
(3) The same IFA, E&Y Corporate Finance has been employed and used the same methodology as 1 year ago. Very coincidentally, the exit offer price of 30.15sgd is 5cents above the IFA's lower range of 30.10sgd. As a result, the IFA has deemed the price to be fair. But after all, a bitter taste is left as IFA reduces the range of values by the 45cent dividend paid out last month. I thought some "goodwill" could be shown by OCBC by disregarding the 45cents dividend though.
CIRCULAR TO SHAREHOLDERS
Barring unforeseen circumstances, the Company aims to maintain each dividend amount to be no lower than the preceding one. As at the Latest Practicable Date, the Company has no intention to amend its stated dividend policy even if it is delisted. In addition to complying with these statutory and regulatory requirements, the Company intends to maintain a high standard of financial transparency and governance disclosure. With a wide range of stakeholders, including Shareholders, policyholders, distribution partners, reinsurers, debt investors and regulators, it is important for the Company to practise good financial disclosure to ensure adequate transparency and accountability to gain and retain the support and confidence of its stakeholders. The Company intends to continue to make available key and relevant financial metrics on a quarterly and annual basis, to ensure that its stakeholders are kept informed of the Company's financial performance throughout the year. On an annual basis, the Company will continue to publish an Annual Report, which will include the financial statements of the Company and the GEH Group for the financial year, as well as other pertinent information and disclosures to enable Shareholders to have a better understanding of the GEH Group's business and performance. On a quarterly basis, the Company will continue to provide summarised updates on key and relevant financial metrics. These updates will be published on the Company's corporate website.
As reported in the AR2024 and using the same best estimate, reserving and capital requirement assumptions as those used in the calculation of Embedded Value as at 31 December 2024, the Economic Value of One Year’s New Business of the GEH Group as at 31 December 2024 is SGD621.5 million (2023: SGD682.8 million) or SGD1.31 per Share (2023: SGD1.44 per Share) as reported in the AR2024.
We note that only one of the Comparable Transactions has information on the Embedded Value of the target. The P/EV Ratio of the GEH Group implied by the Exit Offer Price of 0.8 times is below the implied P/EV Ratio of 1.5 times for the Aviva-Singlife Consortium transaction. It should be emphasised that the stake acquired in the Aviva-Singlife Consortium transaction is approximately 75.0%, to which a control premium may be ascribed.
We note that the average P/EV Ratio of the Comparable Companies which have consistently reported their Embedded Values over the 10-year Period is 0.8 times. When the multiple of 0.8 times is applied to the reported Embedded Value per Share of the GEH Group as at 31 December 2024 of SGD38.08 and after adjusting for the dividend of SGD0.45 per Share paid on 6 May 2025 (being after 31 December 2024, which is the date used for the reported Embedded Value of the GEH Group), the resulting value is SGD30.10 per Share.
GEH delisting circular + IFA opinion
https://links.sgx.com/FileOpen/GEH%20Cir...eID=848383
(1) Regardless of listing status, the dividend policy and disclosure requirements will be very similar. Besides the Company Act, OPMIs holding GEH as an unlisted company are also "protected" by the FHA Act on paper as well. But in practice, OPMIs who may hold unlisted GEH shares are ultimately protected by the fact that OCBC is listed and has a reputation to defend/protect.
(2) A shareholder of GEH gets ~1-1.50sgd increase in embedded value per year. And adding the dividend yield of ~4%, the paper return is a 9-12% sort of annual return. But in practice, the only folks who can monetize those returns are OCBC and the descendants of some trust/estate of your ancestors.
(3) The same IFA, E&Y Corporate Finance has been employed and used the same methodology as 1 year ago. Very coincidentally, the exit offer price of 30.15sgd is 5cents above the IFA's lower range of 30.10sgd. As a result, the IFA has deemed the price to be fair. But after all, a bitter taste is left as IFA reduces the range of values by the 45cent dividend paid out last month. I thought some "goodwill" could be shown by OCBC by disregarding the 45cents dividend though.
CIRCULAR TO SHAREHOLDERS
Barring unforeseen circumstances, the Company aims to maintain each dividend amount to be no lower than the preceding one. As at the Latest Practicable Date, the Company has no intention to amend its stated dividend policy even if it is delisted. In addition to complying with these statutory and regulatory requirements, the Company intends to maintain a high standard of financial transparency and governance disclosure. With a wide range of stakeholders, including Shareholders, policyholders, distribution partners, reinsurers, debt investors and regulators, it is important for the Company to practise good financial disclosure to ensure adequate transparency and accountability to gain and retain the support and confidence of its stakeholders. The Company intends to continue to make available key and relevant financial metrics on a quarterly and annual basis, to ensure that its stakeholders are kept informed of the Company's financial performance throughout the year. On an annual basis, the Company will continue to publish an Annual Report, which will include the financial statements of the Company and the GEH Group for the financial year, as well as other pertinent information and disclosures to enable Shareholders to have a better understanding of the GEH Group's business and performance. On a quarterly basis, the Company will continue to provide summarised updates on key and relevant financial metrics. These updates will be published on the Company's corporate website.
As reported in the AR2024 and using the same best estimate, reserving and capital requirement assumptions as those used in the calculation of Embedded Value as at 31 December 2024, the Economic Value of One Year’s New Business of the GEH Group as at 31 December 2024 is SGD621.5 million (2023: SGD682.8 million) or SGD1.31 per Share (2023: SGD1.44 per Share) as reported in the AR2024.
We note that only one of the Comparable Transactions has information on the Embedded Value of the target. The P/EV Ratio of the GEH Group implied by the Exit Offer Price of 0.8 times is below the implied P/EV Ratio of 1.5 times for the Aviva-Singlife Consortium transaction. It should be emphasised that the stake acquired in the Aviva-Singlife Consortium transaction is approximately 75.0%, to which a control premium may be ascribed.
We note that the average P/EV Ratio of the Comparable Companies which have consistently reported their Embedded Values over the 10-year Period is 0.8 times. When the multiple of 0.8 times is applied to the reported Embedded Value per Share of the GEH Group as at 31 December 2024 of SGD38.08 and after adjusting for the dividend of SGD0.45 per Share paid on 6 May 2025 (being after 31 December 2024, which is the date used for the reported Embedded Value of the GEH Group), the resulting value is SGD30.10 per Share.
GEH delisting circular + IFA opinion
https://links.sgx.com/FileOpen/GEH%20Cir...eID=848383