I was doing research on Haw Par Corp recently and was surprised to discover that the company hold large amount of shares in UOB (68 millions), UIC (67.5 millions) and UOL (41.4 millions).
According to Haw Par Corp’s website, their substantial investments consist “mainly of strategic holdings in United Overseas Bank Limited, UOL Group Limited and United Industrial Corporation Limited. They have been a stable source of funding – through recurring dividend income – and financial strength – at marked-to-market valuations – over the years.”
Based on the annual report, these shares contributed about 60.2% of the profits in 2013. This is a significant amount of income source from a non-core business segment. After all, Haw Par has always been regard by many investors as a healthcare company which manufactures the famous local brand, Tiger Balm ointment. Who would have guessed that it is actually an investment holding company with billion dollars worth of shares in blue chip companies? It seems that investors may not fully understood the true value of Haw Par Corp. Read on to find out more about my personal view on this often overlooked stock.
Before you become too excited about the stock, it is important to examine the concept of companies with investments in other companies.
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