Posted by: donmihaihai | August 29, 2022

Haw Par 11 years later

Actually close to 11.5 years. Return is so so, just more than double from about $5 post split. About 7% annualised return, half of my expectation.

Main reasons for investing in Haw Par were it is a cheap way to indirectly invest in UOB, UOL and UIC plus getting 2 wonderful businesses leisure and healthcare and other so so businesses for free.

For the first part, after UIC acquired by UOL, only UOB and UOL remain. And I am doing pretty good here because this is the easier part as profit will flow through to Haw Par even if accounting standard doesn’t really show and Haw Par share price outperformed UOB & UOL by about 50%. Share price do swing and the gap has closed somehow if I ignored the other businesses. It can always swing the other way.

Then I got two negative surprises, first is Underwater Sentosa, a wonderful business that was being milked by Haw Par and got killed by S.E.A. I can write more about it but then the key is I have never foresaw it. None, not once. Lesson learned? Be careful of company milking their businesses. You can’t keep milking it without trying to or being forward looking. Management.

Second negative got to be Hua Han. Nothing to say here except that I wasn’t even paying attention on it. Haha, such sloppiness.

And finally, the biggest surprise, thankfully a positive one is healthcare business of Tiger Balm. It is a very good business, best among all businesses in Haw Par and the double digit annualised growth of revenues and profit before got hit hard by travel restriction in 2020 & 2021 with minimum capex. Way out of expectation and very impressive. So I no longer see it as healthcare plus other business worth another 500m of valuation. Healthcare worth way more now.

In summary, 11 years provide return of about 7% annualised return and valuation close to where I invested then if I offset the reduction in discount in UOB & UOL with a heavily discount but still higher valuation for healthcare.


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