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Hong Lai Huat CEO buys more shares as company prepares to launch Cambodia project

Chan Chao Peh
Chan Chao Peh • 3 min read
Hong Lai Huat CEO buys more shares as company prepares to launch Cambodia project
SINGAPORE (Mar 11): Ong Bee Huat, executive deputy chairman and CEO of property developer Hong Lai Huat Group, has bought more of the company’s shares from the market, just before it gears up for the soft launch of its next property project in Cambodia.
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SINGAPORE (Mar 11): Ong Bee Huat, executive deputy chairman and CEO of property developer Hong Lai Huat Group, has bought more of the company’s shares from the market, just before it gears up for the soft launch of its next property project in Cambodia.

In a Singapore Exchange filing dated March 2, the company said Ong paid $401,925 for just over 1.6 million shares on March 1. That works out to an average of 25 cents a share. With this purchase, his stake has increased to 39.46 million shares, equivalent to 17.781% of the company, up from 17.056% previously. Ong also bought nearly 1.1 million shares, at between 24 and 25 cents, on Jan 25.

These recent purchases were made at a significant discount to the company’s net asset value. As at Dec 31, 2018, Hong Lai Huat had an NAV of 61.79 cents, up from 57.52 cents as at Dec 31, 2017.

At the March 5 closing price of 25.5 cents, Hong Lai Huat is trading at 10 times historical earnings, with a market value of $52.3 million. According to Bloomberg data, there is just one analyst covering the stock: Terence Chua of SAC Capital, who has a price target of 51 cents.

On Feb 25, the company reported significantly improved earnings of $7.94 million for the financial year ended Dec 31, 2018, up 287% from $2.05 million in FY2017. Revenue in the same period was $34.8 million, up 176% from $12.6 million in FY2017. The improvement was driven by higher property sales in Cambodia, the company said.

As at Dec 31, 2018, Hong Lai Huat had cash and cash equivalents of $25.2 million, up from $2 million as at Dec 31, 2017. Given the improved earnings and financial health, the company plans to pay a final dividend of 0.5 cent a share for FY2018.

Hong Lai Huat is riding its momentum in Cambodia. On March 5, the company announced that its subsidiary, HLH Development, would hold a “soft launch” of a new mixed development project in Phnom Penh in April. The project, called Royal Platinum, is a joint venture with a local partner called Royal Group of Companies.

The project consists of more than 800 freehold residential and commercial units. It is located on a plot of land measuring 8,221 sq m, which is centrally located in the heart of Toul Kuok district, described as one of Cambodia’s most affluent areas and a good class residential and commercial development zone. The development site is 20 minutes from Phnom Penh International Airport.

Hong Lai Huat has about three decades of history. Its previous projects in Singapore include D’Ecosia, D’Fresco, D’Castilia, D’Almira, D’Lithium, D’Kranji Farm Resort and D’Centennial. Its first property development in Cambodia was D’Seaview, a mixed-use development project in Sihanoukville.

“The group expects positive sales response for the balance units in the D’Seaview project… as we look forward to completing the entire construction project in 2019,” the company states in its commentary on its full-year earnings.

Besides property development, Hong Lai Huat is in the agricultural business. It has a 10,000ha plot of land in Cambodia, on which it cultivates tapioca. The company also produces tapioca starch, which is widely used in foodstuff production.

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