The 2 brothers -- Teo Ho Beng & Roland -- have to be on guard against an investor accumulating Hiap Hoe stock in the open market and then making a bid for their father's stake when (assuming) the Hiap Hoe Holdings investment vehicle is dissolved. Otherwise, suddenly, there emerges a new major shareholder! In an extreme scenario, an investor (such as another property developer or a private equity fund) can accumulate a big chunk and then buy out the Old Man -- and then make a general offer for the rest of HH Limited.
You are seeing it right! The earnings are jumping higher and higher.
In 1Q, net profit after tax surged 75.2% from $8.0m in 1Q2011 to $14.0m in 1Q2012.
When the family feud gets closer to resolution, the catalysts would be in place for a stock surge.
Not to be concerned about the drop in cash level of Hiap Hoe: down to $3.8m compared to $10.4m as at 31 Dec 2011. This is the part of the cycle where cash gets used up to fund the construction (of the hotels). The cash tap will turn on very hard in due course.
Resilient -- didn't go below 50 cents at closing. The vol traded of 2.6 m shares is no surprise, given the accumulation that is going on among investors which anticipate a catalyst for the stockj price when the family feud is resolved.
