Wolf Money(10 things you need to know about Haw Par Corporation Annual General Meeting held on 25 April 2023)
10 things you need to know about Haw Par Corporation AGM held on 25 April 2023.
1.) The AGM was held physically for the first time in 3 years after Covid at the Grand Ballroom, Plaza Parkroyal Hotel.
2.) I estimated there were at least 150 shareholders in attendance which is quite impressive given there are only 222m outstanding shares unfortunately the Chairman, Dr. Wee was absent for the AGM on the advice of the doctor.
3.) No food is available after the meeting, a big disappointment for those annual general “makaners”. Although there is no food, shareholders were given a goodie bag that comprise Tiger balm, Mosquito repellent patch and Tiger Balm Plaster.
4.) The company was asked about its expansion plan. Going to Africa which Tiger balm doesn’t have a foothold is a possibility given the huge market for Tiger Balm products. CEO mentioning about the need to build up distribution network before thing can happen in Africa.
5.) The new plant in Johor is in the process of getting approval to start production. The increase capacity is helpful to meet demand and to diversify business risk as a hedge against production disruptions in other factories in China and Singapore.
6.) The CEO answered question on Haw Par Corp going into property development. “It is not part of our core business” he replied.
7.) Questions on increasing holdings in strategic investment surrounding UOB and UOL shares were asked. HPC didn’t buy more shares in both companies because there were no scrip dividend options for both companies when they declared dividend last financial year. The management is also keen to maintain a high level of cash for acquisition relating to their core healthcare business but currently there are no immediate target as asking price for healthcare related businesses are high.
8.) A few shareholders asked in what circumstances would the company considered giving another special dividend or increase normal dividend payout given the highly cash generating business? Without promising, the board will be considering higher dividend in tandem with the higher profit.
9.) Shareholders gave suggestions to increase Tiger Balm products range and also to leverage on Haw Par and the Singapore brand name to expand into other healthcare businesses overseas.
10.) I asked a question on the current economic condition in general and how the stubbornly high inflation, trade war and geopolitical risk impacting their business. The CEO replied ” Inflation had minimum impact on material input costs but wage and logistical costs are more likely to impact overall margin, so far they are able to maintain margin, recovery is taking hold, he is hopeful for profit of HPC to reach pre covid high soon.
Overall I think HPC is recovering quite nicely from covid disruption. There was a fair amount of optimism during AGM. Finger crossed for a better 2023. God Bless.
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