From hospitality to the hospital industry, OUE Limited is certainly going places, But the question now is whether the share price of the real estate company is grossly undervalued? It certainly seems so as current trading price was $1.85 while Net Asset Value (NAV) amounted to a staggering $4.46.
In my opinion, the laggard share price performance could be due to legacy issues. Not many investors may be aware of the story of OUE and how it had unfolded through the years.
The company was formerly known as Overseas Union Enterprise Limited and changed its name to OUE Limited in August 2013. Read on to find out how corporate events had changed the destiny of this revered SGX-listed company. Recent developments may shed some light on its falling share price.
History of OUE
Founded in 1964, OUE had a rich history. The real estate developer started life as Overseas Union Enterprise Limited when legendary banker, Lien Ying Chow decided to enter the hotel industry. Many Singaporeans, especially those older folks, would remember Lien as the founder of Overseas Union Bank (OUB), the smallest bank among the “Big Four” in the 90s.
Like many family-owned businesses, OUB and OUE had cross-shareholdings. Thus, when OUB was acquired by UOB in 2001, it was briefly managed as a subsidiary by UOB.
In the early 2000s, the government of Singapore decided to consolidate the banks. This subsequently led to a wave of banking consolidations which saw DBS making a hostile bid for OUB. However, UOB upstaged the bid and made a successful takeover of OUB in 2001. As OUE was part of UOB back then, the company became part of the bank’s stable of companies.
However, Monetary Authority of Singapore further mandated that local banks to hold no more than 10% of non-core banking assets by 2006. The move was aimed at local banks such as UOB and OCBC, which tend to [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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