A deep value play waiting by the wings. Tan Chong group is an illustrious old corporate name.
TCIL was listed in 1998 (as a result of a group corporate exercise) both in HKSE and SGX. Price last Friday was at hkd3.17 and has been firming over the past week. Although, limited stock liquidity is a drawback (Tan family controls about 77% of shareholding), but year to date price has steadily risen by over 40%. Of late volume has perked up a notch.
Last reported NAV was hkd 5.25. 1H performance was strong with EPS hkd0.76, supported by massive revaluation gain on listed investment. The sweetener is that TCIL owns vast freehold lands in Singapore, estimated 16 acres at various location (including 4 acres in Bukit Timah). These lands have good development value that could add materially to its NAV.
Investing angle is clear – privatise TCIL or restructure the group to unlock values. Last corporate restructuring was more than 15 years ago.
TCIL provides a good margin of safety for both value and growth investors.
