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Hi,
We can do something about this. In fact, we can consider sending another round of letter. This is because the mgmt has mentioned in their previous letter:
"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." and "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."
Their statements were true at the time of their writing. However, with the collection of the Laurels proceed which will be reflected as cash on the B/S and proceeds from Waterwoods EC, their stand will weaken a lot. In addition, we may have to counter argue that the aim of us is not primarily for a better share price; But to create value by using the excess cash to buy up Sing Holding's shares in the open market and cancelling it (if possible). This will increase the NAV/value of the smaller pool of shares.
My worry is that Boss Lee may preempt this move and move quickly to deploy the excess cash in a industrial property acquisition or investment instruments. Therefore as minority shareholders, we may have to act quickly once Sing Holding's Q2 result is released in Aug and a high cash balance is shown. In our letter, we will have to explain how buying Sing Holdings shares will be a better investment decision than some property acquisition.
For example, If Sing Holdings NAV is 55 cents and market price is 40 cents, the company will "earn 15 cents for every 40 cents invested into its own shares". P.S I am not very good in explaining how a share buy back can be linked to increasing returns to current shareholders.
We can do something about this. In fact, we can consider sending another round of letter. This is because the mgmt has mentioned in their previous letter:
"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." and "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."
Their statements were true at the time of their writing. However, with the collection of the Laurels proceed which will be reflected as cash on the B/S and proceeds from Waterwoods EC, their stand will weaken a lot. In addition, we may have to counter argue that the aim of us is not primarily for a better share price; But to create value by using the excess cash to buy up Sing Holding's shares in the open market and cancelling it (if possible). This will increase the NAV/value of the smaller pool of shares.
My worry is that Boss Lee may preempt this move and move quickly to deploy the excess cash in a industrial property acquisition or investment instruments. Therefore as minority shareholders, we may have to act quickly once Sing Holding's Q2 result is released in Aug and a high cash balance is shown. In our letter, we will have to explain how buying Sing Holdings shares will be a better investment decision than some property acquisition.
For example, If Sing Holdings NAV is 55 cents and market price is 40 cents, the company will "earn 15 cents for every 40 cents invested into its own shares". P.S I am not very good in explaining how a share buy back can be linked to increasing returns to current shareholders.