HL Global Enterprises

[opmi]

HLGE cannot pay 3 cents every year.

If Hong Leong Group want to keep the company live, quite hard to see the rest of the cash.
IMO, the assets probably have to take a big haircut before can see any buyers.

Maybe should sell off the listed shell or stick to the original plan of acquiring industrial assets.
But look at track record of HLA's Xinfei. Competed to death by the PRC white goods players.

It looks like a value trap to me.

Maybe should take money and run, while there are still value investors looking to buy.

Not vested since around May 2017

HLA (HLGE's parent co) raising rights issue. http://infopub.sgx.com/FileOpen/Proposed...eID=521704

I guess their plan is to acquire businesses so unlikely HLGE will see much ordinary and special div.

[weijian]

So, HL Global Enterprise (HLGE) has ~67cents net cash/share but trading at ~40-45cents, meaning it has negative enterprise value. I suppose Mr Market is right in assigning "zero enterprise value" and because of how things have turned out over the last 20years, the negative EV got really huge. Interestingly, share price actually almost doubled in the past 1 year (probably thanks to EQDP?) and so the discount to cash reduced from ~60% to the current 40%.

HLGE is 49.1% owned by China Yuchai International (CYI), which in turn is 48.7% owned by Hong Leong Asia (HLA). In recent times, there has been a series of corporate actions at CYI and HLA side - Both are raising capital via new equity than maybe trying to monetize this HLGE stake, with the latter way the only way for deep value investors to be able to be proven right (eg. Morph Investments own ~3.08% of HLGE)

Minutes of the Sixty-Third Annual General Meeting

Shareholder C observed that the Group’s cash reserves exceeded its market capitalisation, implying that the Company’s shares were trading at a discount to underlying cash value. He expressed concern that the absence of dividends and a clearly articulated capital deployment strategy might limit investor interest and suggested that the Company adopt a more proactive approach in utilising its cash resources and communicating its plans to stakeholders.

The Chairman responded that the Company had, over the years, evaluated numerous investments but had elected not to proceed with them as they were not aligned with the Group’s strategic objectives or risk appetite.

The Chairman added that this cautious approach had, in hindsight, proven beneficial, as external factors such as the COVID-19 pandemic, geopolitical tensions and market volatility had adversely affected many sectors. He noted that the Group’s prior divestment of hospitality assets in mainland China had helped it to avoid exposure to a challenging operating environment.

The Chairman reiterated that the Company’s focus remained on enhancing its existing asset base, particularly in Cameron Highlands and its landbank in Malaysia, to generate sustainable and recurring income. While progress might appear gradual, it reflected the Board’s prudent approach in timing developments in line with market conditions.

https://links.sgx.com/FileOpen/HLGE%20-%...eID=889432