Sunday 28 April 2019

Short AGM review + some personal thoughts on Sutl, Hanwell and Uni-Asia

SUTL Enterprise(BHU.SI)
-Attendance roughly 20 
-A shareholder mentioned about the vitality around the marina being 'low'. For e.g restaurants keep folding. Management says that its up to sentosa development corp to do the leasing and keep the area vibrant 
-Current lease left at Sentosa is about 19 years left , after which its probably a need to do some discussing to see if the leases will be extended, but similar to golf courses at sentosa, it will be 30 years basis. With the sentosa cove properties around the marina, its 'hard' to see the marina being changed into something else according to management. 
-Malaysia's new marina will be 2 times bigger. Interest checking has begun but pre-sale has yet to begin 
-For US and China's operations it will be management contract basis. Whereas in sg, msia and thailand(i think) its an ownership basis. 
-1 shareholder highlighted the need for local partners to avoid getting 'chopped' which the management replies they have been doing that and cited the msia one as a joint venture as an e.g 
-Lastly one asked when the foreign operations will reflect on P&L, the answer is that the proceeds of membership pre-sale should enter the cash flow this year but there is no clear infos. 
-Had a chance to have a 3-4 lines chat with one of the management guys who was seated at front row. He says us operations should start in 2 weeks.
Personal Thoughts: I believe 2019 should see some sales progress on the marina in malaysia as well as some management fees coming from the usa operations and hence we could get a better sense of its future operations. Singapore is likely to come in stable as the membership sales are on a long term basis. The cash on hand and cash flow from the marina is pretty decent at current price considering it has 19 years of lease left. The concern I have would be the business risk in Malaysia and possibly Thailand.

-Attendance roughly 50 
-A shareholder asked about the Capex in the upcoming year. The reply is that most likely its on the side of Tat Seng only 
-Tat Seng will cease operations at Nantong Hengcheng and move operations to new plant at Nantong Tatseng which is more hi-tech. The current land at Hengcheng is on rental basis. 
-Differing views among shareholders, one sees Tat Seng as capital intensive and would rather Tat Seng be divested while another has the complete opposite view. 
-Management said they are pretty satisfied with Tat Seng's results in what was a harsh and competitive environment. 
-Capital Reduction 100% passed, the deputy chairman says out of so many he chairs, its rare or was it the first time its 100% something along those lines and everyone can go celebrate.
Personal Thoughts: Hanwell still remains a very asset based play, this year has been a big breakthrough in terms of distributing cash and having a good dividend. As for Tat Seng, it remains to be seen whether they will continue to grow and contribute more profit to hanwell via the new plants. A key information in the auditor statement is that the fair value of the golf course is actually higher than the carrying value of Million Cube, the holding company. Therefore even if the money is not obtained and the deal falls, the risk is not big. 
Uni-Asia Grp(CHJ.SI) 
-Attendance roughly 50 
-Started with a presentation by CFO on the results 
-Proceeded with reiterating that despite the impact of leases they remain fairly confident of 1Q results which would be out in May. 
-Dividends will be distributed on a semi-annual basis. 
-1 shareholder asked if the asset for sale that has been sold in Feb according to AR will book a full 5+ million usd profit (which is roughly 10 cents eps). The answer was there will be a gain but its not full gains as due to the leases effect some of the gains will be deferred as well. 
-Another shareholder questioned the placing which is met with the answer of growing the pie for all shareholders. 
-Another shareholder suggested for share split as according to him the optimal number of shares should be 200 to 300 million but the current number of shares is about 50+ million only. This was met with the answer of options are being assessed. 
-A shareholder asked why the finance cost are quite low, the reply was that the company had good ties with banks in Japan such that even if they borrowed in USD it was low.
Personal Thoughts: Past few quarters i have many misses with the estimation of the company's different segments. I would really wait till the 1Q results to appear before knowing whats the impact of the new leases on the company's profit and loss statement. Having said that, the divestment of a hotel at above book value in February as well as gains from Hong Kong 3rd Office Property Project should still happen sometime this year. 

Just sharing kpop photos as usual below.

Buying thoughts for those who actually scrolled down :)
I probably would wait till 1Q results of Uni-Asia Group before deciding if I should add my position.
As for SUTL, i believe it would be a long wait and if i decided to go for a longer time frame i might add more of it.
As for Hanwell, i do not think that Tat Seng's results might be good in 1H due to high benchmark set in 2018. Its all eyes on the 2H. As Tat Seng's results generally decide most of Hanwell's profits that would be crucial. If the gap between share and book value continues to widen in Tat Seng, it could be good chance to add more Tat Seng. I bought Hanwell shares as i was unable to attend the Tat Seng Agm in the afternoon. 

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