Going by filings on SGXnet, the chairman of Wing Tai Holdings W05 views his company’s shares as an attractive investment. The chairman’s wife has been buying shares in his company regularly, including on Oct 13. The chairman’s deemed interest has crept up from 60.92% as announced on Sept 8 to 61.04% based on filings on SGXnet.
Wing Tai announced a set of dismal results for its FY2023 for the 12 months to June 30. Its full year net profit fell by some 91% to a tad above $13 million, although excluding fair value losses net profit would be a lot more, at $131 million. More than, in 2HFY2023, Wing Tai recorded a net loss.
Be that as it may, Wing Tai’s gearing is at a meagre 8%. Its net asset value (NAV) as at June 30 stood at $4.13 compared to its last traded price on Oct 13 of $1.43. The low this year was $1.30.
Some market watchers are wondering if the chairman and his family could make a further bid for Wing Tai. Back in 2012, the chairman and his family made a partial offer for the company at $1.39 per share.
Based on Wing Tai’s number of shares in issue, the remaining 38.96% or 329.06 million shares would be priced at $470.5 million based on the Oct 13 close of $1.43. However, any offer for the remaining 38.96% would have to be at a premium to $1.43. A respectable price, according to market watchers is a P/NAV of 0.5x. This would value the stake not owned by the chairman and his family at $679.5 million.
Separately, Frasers Property TQ5 (FPL) is trading at a mere 0.3x P/NAV at its last done price on Oct 13. Its gearing is a lot higher than Wing Tai’s, at 72.7%. Thai Beverage Y92 and TCC Assets owns 86.8% of FPL. The number of shares it doesn’t own are around 514.86 million. An offer for these shares at a respectable P/NAV of 0.5x works out at $661.6 million. While FPL is viewed as undervalued by some analysts, it is also relatively illiquid.
Of course there are other stocks on the SGX where major shareholders own 88%. These are Great Eastern Holdings G07 and Pacific Century Regional Developments P15 (PCRD). Of the two, PCRD has less liquidity. And it has a share buyback programme that is implemented regularly.
Whether it is one of these companies that are privatised or others remains to be seen. On the other hand, funding costs are high, so major shareholders may just wait out the high cost of funds.
