SINGAPORE (Jan 31): Ong Bee Huat, founder, deputy chairman and CEO of property and agriculture company Hong Lai Huat Group, has resumed buying shares in his own company after a break of more than four months.

On Jan 16, Ong bought 36,000 shares at 18.7 cents each. The following day, Ong bought another 23,500 shares. For these, he paid 19 cents each for 23,300 shares, and 18.9 cents each for 200 shares. All in, he spent $11,197. Following the purchases, Ong’s stake, increased from just over 43.08 million shares to just over 43.1 million shares, which translates into a stake of 19.424%.

Regardless of which price Ong paid for the shares, he is buying them back at a time when they are undervalued. As of Sept 30, Hong Lai Huat had an NAV of 59.38 cents per share, up from 58.09 cents as at Dec 31 2018.

Year to date, Hong Lai Huat shares have gained nearly 11% to close at 19.2 cents on Jan 20. At this price level, the company is trading at about 13 times historical earnings and has a market value of $39.4 million.

On Nov 11, 2019, the company reported that revenue for 3QFY2019 ended Sept 30, 2019, was down 13% y-o-y to nearly $8.6 million. However, earnings in the same period was up 69% y-o-y to $1.48 million, as the company incurred lower administrative and financing expenses.

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The company says its agriculture division has started harvesting cassava in Oct 2019, and new planting, which started in the last quarter of 2019, would be completed by the end of 2019.

The company is developing a couple of property projects in Cambodia. One of them is D’Seaview, one of the first and largest mixeduse developments in Sihanoukville. It comprises 737 residential units and 67 commercial units. According to the company’s November announcement, residential units of the D’Seaview are targeted for completion by the end of 2019 while the commercial projects in the same mixed-development project have been completed and are being progressively handed over to buyers.

The company has a second mixed development project, Royal Platinum, also in Cambodia. Piling work is scheduled for completion by end of 2019 and subsequent construction work to start in “early 2020”. This project consists of 851 residential and 50 commercial units and the project site is located just 20 minutes away from Phnom Penh International Airport. “The Property Division continues to seek new business development opportunities,” says Ong Lai Huat.

AEM director trims stake

James Toh Ban Leng, non-executive, non-independent director of AEM Holdings, has trimmed his direct stake in the company. On Jan 16, he sold 206,000 shares at just below $2.20 per share. One day earlier on Jan 15, he had already sold 400,000 shares for $866,000, which works out to an average price of $2.16.

With the sale, Toh is left with just over 13.2 million shares. However, he has a deemed stake of nearly 7.2 million shares as well. That chunk of shares is held under ACT Holdings, an investment company of which Toh is managing director. Following the sale, Toh’s total stake in AEM Holdings is just below 20.4 million shares, or 7.561%.

Toh’s sale of AEM shares came one week after the company provided an update on its order book. On Jan 8, the company announced that the day earlier, it received sales orders worth $245 million for delivery in FY2020 ending this December. Based on the sales orders received so far and the business outlook, AEM expects its FY2020 revenue to be $330 million to $350 million. It expects to incur a capital expenditure of $4 million.

On Jan 7, AEM shares closed at $2.03, at least 6% lower than the price range of between $2.16 and $2.20 at which Toh sold.

For the three months ended Sept 30, 2019, AEN reported earnings of $13.7 million, up 20.4% y-o-y. Revenue in the same period was down 1% y-o-y to $83.8 million. At its Jan 20 closing price of $2.13, AEM shares are valued at 14.25 times historical earnings, implying a market value of about $575 million.