Haw Par share price danced with UOB

From $3.00 in 2009 to $14 in 2018, Haw Par share price enjoyed one of the most incredible bull runs in Singapore Exchange as it surged more than four fold within the span of a decade. The berserk run of Haw Par share price certainly created much wealth for long-time investors but its bullish run seemed to hit the skid for the past one year. What has changed that caused the malaise form of Haw Par share price? Since my last coverage on this counter in 2017, Haw Par share price continued to amaze me with its adventure.

Unknown to many investors, this counter is actually a proxy for UOB share price. This is because Haw Par Corp holds 73 million UOB shares under its Investments segment. If investors observed Haw Par share price carefully, it would mirror exactly that of UOB share price for the past 3 years. For example, Haw Par share price increased from $7.50 in February 2016 to a high of $14 in May 2018. Likewise, UOB share price increased from $17.20 in February 2016 to a high of $30 in May 2018.

Haw Par share price

While UOB share frequently enjoys the limelight because of its status as one of the leading Straits Times Index, Haw Par shares had somehow been under the radar for years. Looking through the data, the big boys had not bothered to short sell this counter. To top it off, even institutional funds had been giving Haw Par shares the cold shoulder. Currently trading at Price/Book Value of 1 and Price/Earning ratio of 15.7, is Haw Par share price a value trap or hidden gem? What is the narrative for Haw Par share price?

Haw Par share price to roar with special dividend?

Singapore will mark its bicentennial year in 2019. Likewise for Haw Par, 2019 marks the 50th year since Haw Par was incorporated and listed on The Singapore Exchange. It has been a fascinating journey as the past 50 years saw Haw Par Corp evolving from a family business to a conglomerate with businesses in Healthcare, Leisure, Investments and Property. Through the decades, Haw Par share price had also withstood the test of time as its businesses remained immune to interest rate hikes, technology disruptions and oil price volatility.

Despite the strong business fundamentals, the average three month volume of Haw Par is a startling low of 0.05mm. The free float amounts to 61.7% while Wee family and UOB have significant combined stake of 37.4% in Haw Par. With such strong backers, the risk for Haw Par should be low. But the problem with this counter is the extremely poor liquidity. So minority investors must have the right mentality when investing in this counter because they may face problem selling their shares due to lack of takers. So while Haw Par share price had appreciated substantially over the past few years, whether investors can encash their stocks at their desired price is a question mark.

Not that investors are complaining of course as management recently proposed a special dividend of 85 cents per share to mark Haw Par’s 50th Anniversary. This special dividend will be an one-time payout to reward shareholders for many years of support. Together with the ordinary dividends, the total payout for the financial year ended 31 December 2018 would be $1.15 per share. Will the special dividend propel Haw Par share price to another level? In my opinion, the special payout is [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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Updated: March 5, 2019 — 3:47 pm

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