If you are new to investing on the Singapore Exchange (SGX), you may not know that some of Singapore’s biggest and most popularly traded companies are actually home-grown conglomerates which are run by some of Singapore’s richest families.
Besides playing an integral part in growing Singapore to become the successful city-state that it is today, these companies have also generated good returns for its owners and investors over the past years.
In this week’s edition of 4 Stocks This Week, we take a closer look at some of these local family empires to find out how well they have been performing.
Haw Par Corporation Limited (SGX: H02)
Haw Par Corporation and its subsidiaries is in the business of manufacturing and selling pharmaceutical and healthcare products. Its most recognisable brand is Tiger Balm, which has a product line that extends to ointments, plasters, muscle rubs and even mosquito repellent sprays.
The company’s property division owns and leases out investment properties in Asia, including Haw Par Centre, Haw Par Glass Tower and Haw Par Technocentre in Singapore, as well as Menara Haw Par, a freehold commercial building in Kuala Lumpur, which together make up 45,399 square metres of commercial and industrial space.
Since the start of the year, Har Par has seen its share price increased from $12.00 to $14.50. Over the past 5 years, it has generated a very impressive return of 99.7% for its investors. The company is currently trading at price-to-book (P/B) value of 1.050 and a price-to-earning (P/E) of 17.66.
Through Wee Investments Pte Ltd (27.55%) and UOB (9.82%), the Wee family owns significant shares in this home grown company.
United Overseas Bank (SGX: U11)
Singapore third largest local bank United Overseas Bank (UOB) has a market capitalisation of about $42.0 billion and was founded by Wee Kheng Chiang, father of Wee Cho Yaw (Singapore’s 4th richest man).
Today, the Wee family continues to hold about 18% of UOB according to a Business Times article. Both Wee Ee Chong (CEO of UOB) and Wee Ee Lim (CEO of Haw Par Group) are also on the Board of Directors of UOB.
Since the start of the year, UOB share prices has increased from $24.31 to $24.98. Returns for investors over the past 5 years stands at 34.2%. Its dividend yield is currently about 4% with its P/E ratio at 10.50.
City Development Limited (SGX: C09)
City Developments Limited (CDL) is one of Singapore’s largest real estate companies with a portfolio of residential, commercial, hospitality and retail space presence in over 26 countries including China, UK, US, Japan, Australia and many more.
Due to the unexpected cooling measures introduced by the Singapore government in 2018, most property counters experienced a poor 2018, which also saw CDL declining by 34% in 2018.
2019 has proven good thus far for CDL, with a total return of 6.8% since the start of the year. Nonetheless returns for investors over the past 5 years is -12.2%.
CDL is 48.4% own by Hong Leong Investment Holdings, which is in turn own largely by the Kwek Family. Kwek Leng Beng is also the Executive Chairman of CDL.
Far East Hospitality Trust (SGX: Q5T)
Far East Hospitality Trust (FEHT) is the first and only Singapore-focused hotel and serviced residence hospitality trust listed on in the Singapore Exchange, with currently 9 hotels and 4 serviced residences. Assets in its portfolio include Oasia Hotel and Village Hotel.
While its parent company – Far East Organisation, continues to remain as one of the largest private real estate group in Asia, a couple of its subsidiaries, most notably Far East Orchard and Far East Hospitality Trusts, are traded on the SGX.
Since the start of the year, Far East Hospitality has delivered a return of 10.6%. However, its 5-year return to investors stand at just 0.6%. The company is currently trading at a P/B of 0.73 and delivers a dividend yield of about 5.15% to its shareholders.
The four largest shareholders of Far East Hospitality are Golden Development Pte.Ltd. (31.0%, the estate of Ng Teng Fong has a direct stake in Golden Development), F.E. Holdings (15.0%), Far East Organisation Centre (10.0%) and FEO Hospitality Asset Management (4.04%).
To find out more about some of the year-to-date performance of other family empire plays on SGX, you can refer to the SGX market update here.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.