(Stocks Discussion) SGX: Haw Par Corporation [SGX: H02]?

The company is famous for its Tiger Palm business. Besides this, they are one of the key shareholders of UOB and UOL Group. So in terms of seniority, Haw Par group is like the grandfather in the empire while UOB and UOL are the children.
As mentioned by the others on this thread the company has very low liabilities because it is acting as an investment vehicle for the Wee family. Not much can be said about this stock, except that it is a stable dividend play due to its low debt, constant dividends received from UOB and UOL and a well-renown medicated product called Tiger Balm.

Being vested in Haw Par stock is akin to having exposure to 3 key sectors:

1) Healthcare medicinal products (Tiger balm ointment & sister products)

2) Bank (via stakes in UOB, one of the 3 blue-chip local banks)

3) Property (via stakes in UOL, one of the leading property company in SG).

The interesting thing about Tiger Balm is that its a age-old household brand name, which carried tons of brand awarness when it comes to pain-relief solutions. The Tiger Balm ointment recipe is also difficult to be replicated by its competitors. Hence, its heartening to know that the company had been effectively exploiting this strategic advantage and carried out product extensions such as mosquito repellent patch, pain-relieving patch etc. They also seek to distribute their products via 3rd party networks & partnerships, reducing/eliminating the need to set up storefronts which result in capital layouts & recurring maintanence expenses.

When it comes to their investments holdings in UOB & UOL, they are quite the shrewd investor. Quoted from their 2018 annual report "The Group elected to receive $47.6 million (2017: $25.2 million) of dividend income as scrip shares in lieu of cash dividends during the year. With the higher share base as the Group progressively opted for scrip shares in lieu of cash dividends, coupled with the increase in dividend rate, dividend income from strategic investments increased 64%". So at first instance, it might seem that in 2016 & 2017, their dividend income had shrank. But in reality, they are opting to re-invest and took advantage of lower share prices to hold on to more shares that had consistent dividend growth.

Last but not least, not only Haw Par had very low liabilities in total, it also had very limited interest bearing debt, such that its trade & other payables exceed its borrowings. This speak volumes on the conservative & prudent financial approach that the mgmt take. No fancy financial instruments, very straight forward, clean & lean debt profile.

All in all, H02 is not really an exciting growth or high yield stock. Its more of a "slow & steady" stock that rewards shareholders over the long horizon, with more gradual upward price movements than sharp downward movements.