Chuan Hup Holding Ltd - An Overdue Update

It has been a long long time since I did any update on Chuan Hup Holding Ltd.

The last post was dated 13 September 2015.

I will not be long winded and talk about Chuan Hup Holding Ltd (Please read through the previous post).

Based on the Triple S Scorecard:

Although I suffered paper losses, but...

1. Still very rich - The Group still has $93.442 Million in cash. Note that although most of the cash is still with PCI Ltd, but Chuan Hup Holding Ltd can request for high dividend from PCI Ltd. The Group also has investment securities, which can be easily converted to cash. During this downturn, the Group can also utilized the cash and purchase many undervalue assets.

2. Pass Triple S Scorecard - The Group still pass the Triple S Scorecard with flying colours. Based on the current lower price, it fares even better.

3. Dividend of 1 cent - We should still expect a fixed dividend of at least 1 cents from the Group. Although this is just 3.7% of dividend yield, but its still a good yield in this downturn. Hopefully the company will announce at least another 1 cent of special dividend!

4. No borrowings - The Group totally has no borrowings! 

What are the question marks?

1. Australia Property - Having 18% of direct equity stake in Finbar Group Limited, the Group is heavily involved in Australia Property Industry (esp Perth). Australia Property Industry seems to be on a downhill from a VERY HIGH PEAK. If this happens, there maybe some losses from Finbar Group Limited that the Group need to be accounted for and FY16 income statement may present losses.

2. Investment Securities - What are the Investment Securities that the company is vested in? That is always the question in my head. Without knowing, I will not be able to know how much of the balance sheet maybe affected by the world news.

In Short

Please expect the Group to suffer losses in FY'16 due to possible fair value loss from the investment securities and possible provision on the Development Properties on the balance sheet. 

Nevertheless, I believe the current price is still a steal. Somehow I have a feel that this Group could be a very slow pace "Berkshire Hathaway" within the SGX - the best investment firm in the exchange. BUT PLEASE GO SLOW and ADD SLOWLY. 

Expect the share price to continue to go downhill. Once the bull returns, the stock should rises significantly. If it doesn't, you still have the dividend

I will not be adding any of the shares at this point as I believe I am vest enough in this Group. However if it falls below its NCAV price of 0.236, I may consider.

Current Price: 0.270 as of 25 Feb 2016

Please do your own due diligence before you invest in this stock.

Do note the author is vested in this stock/company.

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