3 property developers with more than 60% insider ownership

Since the start of 2021, there has been a wave of privatization offers among the listed property developers. Some of them include:

• Fragrance Group Limited (SGX: F31)
• Singhaiyi Group Limited (SGX: 5H0)
• Roxy-Pacific Holdings Limited (SGX: E8Z)

Some of the common traits among them would be high insider ownership as well as significant discount to their net asset value (“NAV”), prior to the offer being announced. Therefore, these can be seen as factors that contributed to them being offered privatization.

In this article, we will be looking at 3 property developers with similar traits:

• Ho Bee Land Limited (SGX: H13)
• Sinarmas Land Limited (SGX: A26)
• GuocoLand Limited (SGX: F17)

1) Ho Bee Land Limited (SGX: H13)

Ho Bee Land Limited (“Ho Bee Land”) was listed on the Mainboard of the Singapore Exchange in 1999. Headquartered in Singapore, Ho Bee Land has property investments and developments in Singapore, Australia, China, United Kingdom and Germany. The real estate development and investment company has a portfolio that covers residential, commercial, and high-tech industrial projects.

Key Statistics

Ownership

The single largest shareholder for Ho Bee Land belongs to Chua Thian Poh Family, which owns a 71.30% stake in the company. It is led by Dr Chua Thian Poh, who is the current Chairman and Chief Executive Officer.

Apart from that, Ho Bee Land itself holds a 5.59% stake in the company. This translates into a total shareholding of 76.89% for Chua Thian Poh Family, as they deemed to have a stake being held by the company.

Ho Bee Land last traded at S$2.80, with a Price/NAV of just 0.50 times.

2) SinarMas Land Limited (SGX: A26)

SinarMas Land Limited (“SinarMas Land”) is the largest and most diverse property developer in Indonesia with nearly 50 years of experience. SinarMas Land has developed more than 50 projects in Indonesia.

The company is known as an independent city developer (through BSD City Development) and a pioneer in the cluster development or concept-clustered residential housing concepts. In addition, SinarMas Land is also a pioneer in developing innovative Strata Mall / Trade Center (ITC) projects in Indonesia.

Key Statistics

Ownership

The single largest shareholder for SinarMas Land belongs to the Widjaja Family, which has a 70.28% stake in the company. The Widjaja Family owns the SinarMas Group, which is one of the largest conglomerates in Indonesia. The Group has business interests in paper, real estate, financial services, healthcare, agribusiness and telecom.

With the 6.91% stake held by the company, the Widjaja Family actual ownership in SinarMas Land risen to 77.19%.

SinarMas last traded at S$0.25, with a Price/NAV of just 0.36 times.

3) GuocoLand Limited (SGX: F17)

GuocoLand Limited (“GuocoLand”) is a public company listed on the Singapore Exchange since 1978. The principal business activities of its subsidiaries are property development, property investment, hotel operations and property management. GuocoLand have established property operations in their geographical markets of Singapore, China and Malaysia, comprising residential, hospitality, commercial and retail developments.

Key Statistics

Ownership

The single largest shareholder for Guocoland belongs to Guoco Group Limited (0053.HK), which has a 70.8% stake in the company. Guoco Group Limited, listed on The Stock Exchange of Hong Kong Limited, is an investment holding and investment management company with four core business:

• Principal Investment.
• Property Development and Investment.
• Hospitality and Leisure Business.
• Financial Services.

GuocoLand last traded at S$1.52, with a Price/NAV of just 0.42 times.

Conclusion

All in all, the above property developers are majority owned by substantial shareholders. Coupled with the low valuation, these developers could stand a chance for potential privatization by the controlling shareholder.

Furthermore, with the significant insider ownership, the 90% privatization threshold can be reached with a higher degree of certainty.

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