Why Tan Kin Lian Keep Talking About Buying Apartments in Malaysia Forest City? Is He Out of His Mind?

 

Not sure why my Facebook will frequently show me Tan Kin Lian’s post. He has been talking about Forest City I recalled from 2017 till now. So what if Forest City is freehold condo and cost just S$300K relative to S$1.5Mil+ Singapore condo right now? Beside the issues of foreign exchange depreciation risk as well as ghost town issue, the MM2H (Malaysia My Second Home) scheme is also fraught with the ever changing political climate risk. One moment Malaysia politicians welcome foreigners like Singaporeans and Chinese and then the next moment they may just decide to ban foreigners or raise up the anti-foreigners sentiment to score political points. 

Hence I am shocked that he even mentioned that it maybe a good idea for retirees to sell one’s property in Singapore and then use part of the proceeds to buy an apartment in Forest City. One will always be a second class citizen in other countries and that is the cold hard truth. 

The Silence of the Lambs Part 2- Venturing Into the Tiger's Den.

This is actually an update on my personal career since a restructuring exercise at my workplace approximately 2 years ago. To recap, those were poignant moments then when some of my colleagues were let go by our Headquarter (based overseas). My local Singaporean director heading the local business unit also left after disagreeing with the new remuneration package on offer by the HQ Big Boss. This was strange despite the business still being profitable.  There was no replacement and I was asked to be the lead General Manager for the local business and do double-hatting for both commercial and financial functions to save cost. Fast forward 2 years and the cat is finally out of the bag: The reason for what had transpired was due to an upcoming Merger and Acquisition ("M&A"). The Big Boss at our Headquarters had decided to sell away his business to a giant Global MNC. No wonder there were so many lambs being slaughtered over this period as he was so busy trimming cost throughout the entire Group. Apparently, he was striving to get as high a selling price as possible with magnificent profit numbers by roasting the lambs. 

1. Most dramatic turn of event.

My local Singaporean director who left previously is now in the acquirer Company HQ. Interestingly, it was revealed that he was recommended his current role at the new acquirer company by my current overseas Big Boss who connected him to the new business owner/acquirer. So, it turns out that eventually, I will still be working with my ex-local director albeit each of us in a different role capacity under the new owner. 

2. Venturing into the unknown- M&A Integration.

Many fellow managers and staff were extremely worried about the upcoming integration albeit much assurance from the HQ Big Boss (who is selling away his business) and also the new business owner that there will be no retrenchment within the next 2 years due to the upcoming integration exercise. It is like a Ripley's Believe It or Not moment. :)

In addition, I have no doubts that the usual higher level fight over control by the senior management will soon start. The new organisation is so humongous that a Manager is just a small fry inside. There seems to be plenty of Director level staff. The higher up "food chain" even have different Vice-Presidents and Presidents in different clusters.  

3. Going back to global MNC.

With such a big structured organisation filled with so many headcounts and departments, navigating through the complex human spider-web will be fraught with challenges. Not to mention the clamouring for credit during project work and pushing away of blame to other department or other personnel when there are screw-ups. So not exactly looking forward to it. Worked before in some of these big organisations but find things too structured at times. So went to a smaller organisation. Now I am back to square one it seems....hmmm. 

4. Importance of passive income during such moment.

Although I have not achieved financial independence, but the interest and dividend income from my half baked tiny investment portfolios do come into handy. At least I will be able to pay off basic housing mortgage and the kid's living and educational expenses if unfortunate events were to strike later on.

Parting thoughts

I am not sure one gets wiser as one gets older, But one does learn to dodge a certain amount of hell. :p

Haw Par Corporation Delivered Another 1st Half 2024 of Excellent Results-17.1% Growth in Net Profits!

Haw Par Corporation is on its way to another year of extraordinary good results coming off FY2023-an impressive S$122Mil 1st half profits being generated!  Its 1st half 2024 Earning Per Shares (EPS) is at 55.1 cents and I think it should eventually hit more than S1.00 for the entire FY2024. This is amazing given that its historical EPS are 82 cents (FY2019); 54 cents (FY2020); 50 cents (FY2021); 67 cents (FY2022) and 98 cents (FY2023) respectively. The huge earnings for 2023 and 2024 is mainly attributable to its investment income from its strategic stake in UOB and also interest income from government debt securities.

Tiger Balm Still Doing Well.

Revenue top line from its main business of Tiger Balm healthcare have also been doing well recently and gradually recovering to pre-COVID level. It grew an impressive 6.3% year on year basis for the 1st half. Furthermore, the Management of Haw Par Corp has been looking out to deploy excess capital on hand via the acquisition of a new business. However, from management last update, they still have not found a suitable business for Haw Par Corp to acquire. 

For those interested to know more about Har Paw Corporation, I will recommend you guys to read up on an interesting deep dive of Haw Par Corporation by our Incipient Investor friend from Passive Loss's blog in 2023.

Parting Thoughts

Shareholders who are hoping for a "special dividend" payout will be extremely disappointed. The interim dividends is at 20 cents which is a miserable pay-out ratio of approximately 36% only based on the current earning of 55.1 cents. Management has previously indicated that they will continue to look out for suitable business investment opportunity. 

It is also strange that despite the better results of Haw Par for 2023 and 2024, its share price never recover to its former glorious price of S$13.60 per share in July 2021 and has continued to languish at the S$10 per share price range. 

Divestment of Properties at Premium of 8.8% Over Book Value- United Hampshire US REIT.

Great news! United Hampshire US REIT ("UHREIT") has announced that it is disposing its Freestanding Lowe's and Freestanding Sam's club property within Hudson Valley Plaza for US$36.5Mil. The Divestment Consideration of US$36.5 million represents a premium of US$2.9 million, or 8.8%, above the book value of the Properties, and US$1.5 million, or 4.3%, above the Independent Valuation. Furthermore, the Divestment Consideration is US$5.4 million, or 17.5%, higher than the purchase price of US$31.1 million of the Properties. The estimated gain on divestment based on  the book value of the Properties is approximately US$2.0 million, after taking into account the transaction-related expenses of approximately US$1.0 million.

1. Use of Divestment Proceeds

It is stated that the proceeds from the Divestment may be used to repay existing debts, finance capital expenditure, fund potential higher yielding acquisition opportunities and/or for other general corporate requirements. 

Taking into account the super low market pricing (US$0.43 per unit) relative to its Net Assets Value per unit (US$0.74 per unit), the realised value of the capital appreciation is actually benefical for retail investors of UHREIT. It will also reduce the leverage ratio from 41.7% to 39% and improved its interest coverage ratio from 2.9 times to 3.2 times. 

2. Pro forma Financial Effects of Divestments.

2.1 DPU effect if assume UHREIT had completed the Divestment on 1 January 2023:

2.2 DPU Impact:

2.3 Aggregate Leverage Ratio and Interest Coverage Ratio effect:

Parting Thoughts

Above is good news as many investors of UHREIT have been lobbying for a reduction in its leverage ratio which have been hovering over 40%. Good job by the management team of UHREIT. Today (14th August 2024) also happens to be the results released date (before trading commence) for UHREIT. Keeping my fingers crossed that the distribution per unit will not be reduced drastically due to the high interest rate environment.

Opportunity To Acquire This Quality Non-Banking Blue-Chip That Has Dropped 20% from its Peak.

I thought that now is a good opportunity to accumulate more shares of this blue-chip on SGX which has dropped 20% from its peak this year albeit the not too bad operating results.  Accumulated 2 tranches at S$6.20 per share (700 shares) and S$5.93 per share  (1,000 shares) on 2 Aug 2024 and 8 Aug 2024 respectively. 

Please see below for my latest video on YouTube channel. Going forward, I will be posting various exclusive investment contents onto my YouTube channel only. Please subscribe to my YouTube channel also to get the latest content for sharing.

NTUC Income Already GG 20 Years Ago- So Not Sure Why So Many Old Men Coming Out to Bash The Allianz Offer.

I hope I don't get roasted too badly writing this post. I get the nostalgia that many old old men such as Tommy Koh, Tan Kin Lian and Tan Suee Chieh have about NTUC Income and its goal to help the lower income secure insurance coverage. This was indeed the grand vision of one of the founding fathers of Singapore, Dr Goh Keng Swee. Nevertheless, my personal thoughts and experiences are that NTUC Income Insurance has already lost track of this goal 20 years back when it was run by Mr Tan Kin Lian. 

The sucky parts about NTUC Income Insurance:

At that time (20 yrs ago), NTUC Income kept selling those traditional whole-life policy that one has to pay premium until one's death bed or for 99 years. I wrote to Mr Tan Kin Lian before telling him that other insurers already started offering limited premium paying plans for only 10-20 years (and then become fully paid up) but NTUC Income was still selling its policy holders pay till 99 years old type of stupid traditional insurance plan. His immediate response was a disappointing whether I am another insurance agent from another competitor insurance company. NTUC Income products were already losing innovativeness and relevance to the real market. On a social level, it is actually harming consumers with an inferior product relative to other insurance companies.

NTUC Income was also selling to heartlander customers its investment linked polices- the NTUC Ideal Plan. One would have lost almost 15% of one's invested capital as sales charges before the remaining capital gets invested into unit-trusts. I will leave the link to a post here from 2 March 2012 on my experience with a NTUC Income Insurance agent. 

I also encountered a lot of extreme questioning by NTUC Income assessor trying to get Hospitalisation and Surgical coverage for my aged parents about 15 years ago. They are the pioneer generation that worked hard for Singapore during the early days. I only succeed in getting coverage for my father (with various exclusions) but none for my mother. So what social goal is Tommy Koh, Tan Kin Lian and Tan Suee Chieh talking about that NTUC Income is helping the lower income get insurance coverage? This is Bull-SH*T by these old men. It is clear that NTUC Income is trying to reduce coverage for low income workers while aiming to preserve as much profits as possible.  

Bear in mind that it is Mr Lee Hsien Loong and his government that came up with the Pioneer Generation and Merdeka Generation medical packages to help aged Singaporeans like my Father and Mum generation who most needed the medical coverages but NTUC Income is not keen to cover at all...period. Without the Pioneer generation and Merdeka generation subsidies, my sibling and I would have been saddled with hefty hospitalisation & surgical bills for my aged parents. 

Is NTUC Income Insurance still relevant?

Personally, I thought that it was definitely relevant during the days of Dr Goh Keng Swee when many workers are struggling to get adequate insurance coverage. However, it has since lost its social goal decades later and at current time where for decades, they are very profit driven. Worst still is that Income Insurance is struggling with relevancy for its products and pricing relative to other insurance competitors. I have moved away from NTUC Income many years back due to its inferior products. So I do not understand why so many old men are coming out to stop the Allianz deal which actually has more pros than cons for the future of Income Insurance Ltd.