September 02, 2018 - 4:01pm EST by
2018 2019
Price: 13.55 EPS 0 0
Shares Out. (in M): 221 P/E 0 0
Market Cap (in $M): 2,992 P/FCF 0 0
Net Debt (in $M): -446 EBIT 80 90
TEV ($): 2,546 TEV/EBIT 0.5 0.5

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  • disrespectful write-up to get off



I recommend the purchase of Haw Par (ticker symbol HPAR SP on Bloomberg.)  This is a family controlled holding company in Singapore. It is trading at a price roughly equal to its cash and marketable securities, so that you are creating a profitable and growing healthcare business for free.  I estimate that the "fair/intrinsic" value to be around 50% above the current trading price of 13.55 SGD per share.


Description of the business

The company has three businesses - the consumer healthcare business, the leisure business, and real estate business.  

The consumer healthcare business sells a herbal based analgesic ointment that is over a hundred years old and is sold in a number of countries.  It is marketed under the Tiger Balm brand.  The business has grown revenues from SGD 69.1 million in 2004 to SGD 201.7 million in 2017 and EBIT from SGD 15.6 million in 2004 to SGD 68.6 million in 2017.    ROA = 60% in 2017.

The leisure business consists of the underwater park and the real estate business rents out several properties.  The leisure and real estate business less holding company costs generated SGD 12 million of EBIT in 2017. 


NAV calculation

Cash - debt = SGD 446M on 06/30/2018

Marketable securities = 2.5bn on 08/31/2018 (Owns 73,245,368 shares of United Overseas Bank and 72,044,768 shares of UOL Group.)

Shares o/s = 220.8 million 06/30/2018.

Cash + investments per share = SGD 13.34 versus the SGD 13.55 stock price.

So one is paying SGD 44 million for the consumer healthcare business and leisure and real businesses, which have generated SGD 80MM of EBIT in 2017.

Consumer healthcare business  has grown revenues from SGD 69.1 million in 2004 to SGD 201.7 million in 2017 and EBIT from SGD 15.6 million in 2004 to SGD 68.6 million in 2017.  Return on assets = 60%.  How much is it worth?  I don't know, but 20x 2019 EBIT would not be unreasonable for such a rapidly growing  and high quality business, which would result in SGD 1.5bn value for the segment.  

What is the leisure and real estate business worth?  I am not a big fan of this business, so say at 8x EBIT (purely arbitrary) = SGD 100MM.

Total NAV: operating businesses = SGD 1.6bn or SGD 7.2 per share.  Cash + marketable securities = SGD 13.34 per share.

Total: SGD 20.54 or 51.5% upside versus current stock price of SGD 13.55



Family control. The family does something really stupid or steals money from minorities.  First Eagle owns 13.7% of shares outstanding so might be able to prevent theft, but may not be able to prevent bad capital allocation.

The underlying marketable securities suffer a permanent impairment of value.  While the bank seems to have a decent reputation, I have not examined the loan book and I am not an expert on the Asian real estate.







I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.



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