Wolf Money(10 things you need to know about Boustead S’pore agm 2023)
The 2023 edition of Boustead’s agm took place in Suntec City Convention on the 28th July 2023, the first time in 3 years a physical meeting was held. One could feel the excitement, the camaraderie between the shareholders and management were on full display. The vibe was similar to a family reunion. I was just as excited to see Mr. Wong, the BODs and other shareholders. This was the best shareholders’ meeting I had attended this year, period! Management was straight to the point, no beating around the bush and no bs. The questions asked during the agm were top notch. I am mightily impressed by the sophistication of some questions asked by shareholders. Below are the 10 things you need to know about Boustead S’pore agm 2023.
1.) Let’s get the buffet out of the way because there was none. Each shareholder was given a snack box with a bottle of Orange Juice. I gave the snack box a Lone Wolf agm buffet rating of 6 out of 10. Although it was a snack box, I did enjoy my munch with fellow shareholders and getting to know their prospective on Boustead.
2.) The legendary Chairman and CEO, Mr. Wong Fong Fui was the first to address the shareholders. He mentioned the main reason for Boustead Singapore to privatise Boustead Projects was due to lack of appreciation for Boustead Projects by the investment community. A combine entity will help to attract more institutional shareholders into BSL. BSL is working with SGX on how best to go forward with the privatisation offer for BPL. He was not in his liberty to discuss the privatisation due to regulation and sensitivity surrounding the offer. He is working hard for the benefit of BSL’s shareholders.
3.) Managing Director, Yu Loon was next to do a presentation. He mentioned energy engineering had done well with contract from Saudi Aramco totalling $11m. He also acknowledged his team for their effort in securing a $36m contract from Qatar LNG. The project was for installation of well head control panel. He was quite sanguine about the energy engineering business given order book for energy engineering division is currently at its 2nd highest in the history of the company. The rising oil price is going to have a positive impact on the business. Yu Loon gave a good account of himself, he was very composed when running through the presentation. The presentation was enlightening, it gave a snapshot of the opportunities and the challenges of running a 195 years old company.
4) Healthcare division did not do well for many years, shareholders were reassured by management, they are on top of things. They hope to achieve breakeven or a smaller loss for the healthcare division this year.
5.) Geospatial division had a flat year due to lack of staffs. The staff turnover hits 25% last year with many of its brightest talents got poached by their Geospatial customers. Mr. Wong FF had been in talk with local and foreign Universities to set up Geospatial courses to address the talent shortage. He hopes to work with his Alma Mater, UNSW to develop a Geospatial centre in Australia. They are confident of achieving profit growth in FY2024.
6.) The Chairperson has a favourable view on the conglomerate business model. He like the stable profit shown by Sembcorp and Keppel Corp. He is modelling Boustead S’pore into 4 key business units which could weathered any uncertain business environment. Warren Buffett had been buying Japanese trading houses which are modelled as conglomerates. (Private conversation)
7.) I managed to participate in the QnA with me asking on the treatment of negative goodwill gain arises from the purchase of the additional 21% stake in BPL through the VO. The gain will be booked as a balance sheet item.
8.) There were questions by the shareholders on the lack of technology innovation at their energy engineering division. Management is exploring new technologies in areas of reformer design. Application involves the production of Hydrogen which they are keen to expand further.
(Newly designed reformer for wider application)
9.) The Chief Investment Officer, Keith Chu did an amazing presentation on the shareholders’ value created under the current management since Mr. Wong FF took over the company in 1996. If the shareholder had invested in the company since 1996, every dollar that was vested yielded a 715% return, a return of 26.5% annually over a period of 27 years. Simply Magnifique! Link to the presentation
10.) The atmosphere of the agm was cordial that lasted more than 3 hrs. BODs and management stayed after agm to mingle with the shareholders and patiently answered their questions. One could feel the resurgence of this 195 years old company, going about their business with new vigour that is both powerful and purposeful. The company also set a high standard on how any listed company should engaged their shareholders. I am glad to be part of the family.
My wish is for the company to challenge themselves with a 2028 vision, achieving key milestones in sustainability and a billion dollars worth in market capitalisation by 2028, in time to celebrate the 200th years founding of the company in style. God bless 🙏
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