Sing Holdings

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Dear all

I too have sent the letter earlier to the company and received the reply below. Further to that, I sent another email to the company. See below. You may want to also send a follow up email to the company to tell them reserving money for acquisition is not excuse not to do a share buyback.
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Dear Puay Kuan

Thank you for the reply. I noted that Sing Holdings share price has come down. I would like to ask for the remuneration of directors and key management over the same period, including the latest FY. In addition, I kindly request the Board Remuneration Committee to explain how the remuneration of key management are determined and what is the policy.

On your/ the Board stated reasons under point 1 to 4, I wish to highlight that the Board should view share buyback on the same basis any other land acquisition. This is because substantial value of Sing Holdings now is in the Robin Road site, as you are aware. Buying the company shares now will be no different from buying any other raw land, except that the Board is most familiar with the Robin Road project & the company's status and the company can buy at a substantial discount to NAV/ RNAV. In fact, on risk/ reward basis, from the Board's perspective, share buyback should be most attractive compare to other land acquisition. As such, the need for business expansion is no argument to reject a share buyback, from shareholders's perspective.

On that basis, the Board should also consider tapping on bank debt for share buyback, as that is what the company will do for land acquisition. Be that as it may, I will be grateful if you can share what is the company's cash position after full collection from The Laurel project.


Thank you.

(18-03-2014, 05:58 PM)ngcheeki Wrote: Reply for CFO of Sing Holdings:

We refer to your email on 6 March 2014.

The Company shares your concerns and appreciates your suggestions. Following requests received from a group of shareholders recently, the Board convened a meeting to discuss on the suggestions mentioned in the emails. We would like to assure you that it is the guiding principle of the Board that for every decision it makes, it should be in the best interests of the Company and all shareholders, and to ensure sustainability and continual success for the Company in the long run.

The Company’s share price has been moving upwards steadily for the past three years to a high of 52 cents before declining around July 2013 (please refer to the Company’s 3-year stock chart attached). The decline in the share price corresponds to the introduction of the Total Debt Servicing Ratio (“TDSR”) framework by The Monetary Authority of Singapore in end June 2013. The impact of the TDSR on the Singapore residential property market was harsh, which in turn resulted in the fall in share prices of companies with substantial exposure to this segment, of which the Company is one.

With regard to a share buyback scheme, the Board is of the view that the basic criteria is that a company must have cash in excess of its operational and expansion needs. A share buyback mandate, when exercised, may not address the under performance of the share price as seen in the case of some local property / construction companies where the effect on share price is minimal. In fact, share prices of some of these companies are lower than before the shares were bought back.

In the context of our Company:

1. The Company’s core business of property development and investment is capital intensive. For long-term sustainability, the Company has to continue to expand its business amidst the tough market condition now. Even with external financing, much equity is needed to fund any acquisition and subsequently, the development and construction of projects. As such, ready funds are required to embark on any acquisition opportunities.

2. All our projects are funded through a mix of internal cash and bank borrowings. With the prevailing challenging market conditions, in order to withstand any downturn in the property market or the macro-economies as a whole, it is critical that a healthy cash balance is maintained to provide assurance to the banks for their continuous support.

3. The Company is in a net current assets position. However, assets such as development and trading properties are relatively illiquid, especially in this challenging environment where sales are slow. Furthermore, the receivables due from The Laurels project will be required for payment of outstanding construction costs, income tax and for profit distribution to our 30% joint venture partner in the project.


4. The Company’s cash position as at 31 December 2013 stood at about S$27 million, some of which were project accounts’ money with restricted use.


In view of the funding requirement as explained above and without a large cash float, the Board is of the view that it would not be appropriate for our Company to deploy its financial resources to embark on a share buyback scheme or to distribute a sizeable dividend, as these may curtail its ability for business expansion and compromise its financial position.

Notwithstanding the current property market condition, the intrinsic value of our Company remains strong. With this fundamental value in place, the Company believes that market forces will determine the fair value of the Company when market sentiments improve.

Yours sincerely
Tay Puay Kuan
CFO
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Thx header for your email to the company. As what CY09 said we do not want immediate gratification.

I think the company will be launching Robin soon. If the sales are good, that would be a sizeable inflow of cash. When a project TOP, they will receive 40% of the total project sales within a year....so Waterwoods and Robin if all sold when TOP will have a total project sales of around $650m to $700m(Waterwoods around $375m and Robin around $275m). So 40% would be around $260m($650m used) meaning it can fully cover the long term debts. (Assuming that all sold when TOP)

http://www.ura.gov.sg/lad/HBG/progressPayments.htm

And presently the company's net debt to equity is 0.9. They can comfortably draw down more loans if there is any interesting buy.

So with the receivables from The Laurels and expected cash inflow from Robin when launched, the company will be flushed with cash although the company might want to be 'conservative' by paying off the long term debt. As explained this is not necessary as they will collect 40% of the total project sales when TOP.



(18-03-2014, 09:51 PM)CY09 Wrote: Understand the company's stand that at 27M, it is unable to issue special dividends or do share buyback, however with an impending 117M of receivables, the company will have 144M cash (inclusive of 30% JV for Laurels it does not own).

Perhaps shareholders should make it clear that we do not want immediate gratification. What we want is that the remaining receivables from the Laurels sale; a portion of it is given back to shareholders to do something about the depressed share price.

For the reply " cash is needed to fund outstanding construction costs." We can point out that :
a) The EC development is capable of self-funding (current sales proceeds [est $180M] now exceed the 112M construction contractor awarded to UE E&C),

b) the sale of the Robin project is capable of self-funding. This is because the company has already used cash to pay for the putting of the foundation etc. The cost of constructing Robin site is estimated $50M. If Sing Holdings only sells 50% of the project GFA at avg $2110 PSF, it will collect $42.8 upfront since foundation is ready. The remaining progress payment of up to $100M Mil (assuming a 50% sale success) is more than able to cover the construction cost from start to end.

Thus the assurance needed is that once the remaining Laurels proceed is collected, Sing Holding uses the 144M by setting aside 20M for land bidding, 5M for working Capital, 5M for contingency, 14M to pay down the remaining short term debts, set aside 30M for the profit distribution to our 30% joint venture partner (which I believe is more than enough), 50M for "acquisition opportunities and exploring opportunities overseas", and 20M to reward all shareholders of Sing Holdings (buyback or special div).

Will appreciate if fellow valuebuddies confirm the remaining 117M receivables shown on FY Balance sheet all belongs to The Laurels proceeds. If it is not, please highlight so that argument is recrafted

<still vested>

Edited: For easier understanding and clarity
You can find more of my postings in http://investideas.net/forum/
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Hi Behappyalways

I prefer to get Mr Lee to lay his cards on the table, or make a decision if he is undecided.
Not sure how the sales of Robin project will turn out but I believe the mgmt will have a better feel.
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Hi header


I wrote to them personally but I guess the email did not reach the board. So the concentrated efforts by us made them convened a board meeting. The emails by us are kinda wake up call for them that people are unhappy. Not sure how many shares altogether we owned but I believe that there are many more who are unhappy. If they are not willing to accommodate shareholders' concern, they should consider delisting the company.

Even though they did not accept our suggestions but I think the event makes them take a good look at themselves. When they prepared the 3 year chart of Sing Holdings, they should have seen the underperformance of the share price. I believe they also prepared the charts for other property counters and should have seen the relatively weak performance of Sing compared to others. Hopefully that will made them realise how the share price has been underperforming. We hoped that the management will do something positive to benefit shareholders when the Robin and The Laurels' cash come in as Robin when launched will add a lot of clarity. They can no longer assume that people are satisfied with the current situation. I think this AGM we might need to reinforce the view that more can be done towards the share under performance. Hopefully they get the message.
You can find more of my postings in http://investideas.net/forum/
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Good morning everyone.

just sharing with VB
**Qualifying certificate is not applicable to Waterwoods. With respect to Robin Residences, the qualifying certificate requires the company to complete the construction of the whole housing development and obtain Temporary Occupation Permit (“TOP”) by February 2016. In addition, the company shall sell all the dwelling units comprised in the housing development within 2 years of the issue of the TOP.**

<vested><not a call to buy or sell>
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
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(24-03-2014, 09:37 AM)kbl Wrote: Good morning everyone.

just sharing with VB
**Qualifying certificate is not applicable to Waterwoods. With respect to Robin Residences, the qualifying certificate requires the company to complete the construction of the whole housing development and obtain Temporary Occupation Permit (“TOP”) by February 2016. In addition, the company shall sell all the dwelling units comprised in the housing development within 2 years of the issue of the TOP.**

<vested><not a call to buy or sell>

Guess most of us are unsure of the current progress at Robins site. They have started some works in 2nd quarter last year.
What are the implications if they fail to complete the construction and obtain TOP by Feb 2016 ?
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(24-03-2014, 07:34 PM)cyc Wrote:
(24-03-2014, 09:37 AM)kbl Wrote: Good morning everyone.

just sharing with VB
**Qualifying certificate is not applicable to Waterwoods. With respect to Robin Residences, the qualifying certificate requires the company to complete the construction of the whole housing development and obtain Temporary Occupation Permit (“TOP”) by February 2016. In addition, the company shall sell all the dwelling units comprised in the housing development within 2 years of the issue of the TOP.**

<vested><not a call to buy or sell>

Guess most of us are unsure of the current progress at Robins site. They have started some works in 2nd quarter last year.
What are the implications if they fail to complete the construction and obtain TOP by Feb 2016 ?

If they do not obtain TOP by Feb 2016, If I am right, penalty fees will occur. That is why the Robin site is undergoing construction now before the units are launched. Sing holdings understands this urgency and has proceeded to add the foundation etc. Sing holdings is technically able to collect 30% cash proceeds straight away from owners instead of the usual 20% of the unit price since foundation is ready.
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Good evening everyone.

170 units Waterwoods sold. Left 203 units


http://www.executivecondominium.sg/Waterwoods.html
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
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Good afternoon everyone.

171 units Waterwoods sold. Left 202 units.

http://www.executivecondominium.sg/Waterwoods.html
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
Reply
Good morning everyone.

173 units Waterwoods sold. Left 200 units.

Bigger units are moving slowly. 1 more 4bd sold



http://www.executivecondominium.sg/Waterwoods.html
Not a call to Buy or Sell

Mr Bump: All I Can Smell Is My FEAR
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