Posted by: donmihaihai | May 3, 2014

3 years later.

Got into Haw Par Corporation three years ago base on this

At $6.00, return from operating businesses will be around 3%, assuming return from UIC and UOL to be 7% of their equity while UOB at 10% then return on will be at the range of 13% to 15%. The businesses in Haw Par Corp include outstanding businesses like Tiger Balm and Underwater World that have problem growing and average businesses in bank and property that has all kind of opportunities to grow.

Three years later, the weather is good so let me try to figure out what is the fair value of Haw Par Corporation.

UOB NBV @ 31/12/13 = 15.36
No. of shares = 67,952,169
1.8X NBV = 27.43
Total value = 1,863,929,995

UIC NBV @ 13/12/13 = 3.61
No. of shares = 67,558,000
1X NBV = 3.61
Total value = 243,884,380

UOL NBV @ 13/12/13 = 8.77
No. of shares = 41,428,805
1X NBV = 8.77
Total value = 363,330,620

Hua Han Bio
Total value as per BV at Haw Par = 115,845,000

Investment Properties
@ full value = 222,139,000

Healthcare products
@ 15X PBT = 388,000,000

Leisure
3.5M X 5 years = 17,500,000

Cash plus deferred tax liabilities less 50M for operations and 40M for dividends
=172,000,000

Total Value of Haw Par
= 1,864 + 244 + 363 + 116 + 222 + 388 + 18 + 172
= 3,387 M
Total no. of shares – 218,697,173
Per share = $15.49

No trick here. Getting $15.49 just by putting up some fair but not excessive valuation on these stocks. Call it sum of the parts method if you want. Is using NBV for UIC and UOL aggressive? Don’t think so. Neither do I think using 1.8X NBV for UOB is aggressive too. And with UOB making up more than 50% of the total valuation it is worthwhile to think what is the real valuation of UOB.

Really doubt that Haw Par Corporation will trade at $15 but well it has always been in stealth mode. Not just under radar stock but Haw Par is a stealth growth stock as well. Like company like that.

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