Thursday, July 09, 2009

My Last CK Tang Annual Report

Dear readers,

Be warned. This is an emotional post.

I have received my CK Tang annual report yesterday for financial year ending 31 March 2009. Happy to receive the report as I am a shareholder of CK Tang for more than 6 years. Sad to receive the report as I am going to part with my shares due to their delisting plan from SGX.

It is indeed an emotional ride with CK Tang for minority shareholders like me for the past few years. Two previous attempts to delist and privatise the company had not been successful, and this latest attempt should succeed since the free float of the shares is now at around 12% only. Having said that, it is a pity that the value investor in me which urges me to hold on and wait for the value of their Orchard Road property to be realized (which they do not wish to sell), while the growth investor in me urges me to take their delisting offer and re-invest into other better opportunities. In fact, with the upcoming StarHill Global REIT (which also holds Orchard Road properties) rights issue, I am tempted to re-invest into it.

After delisting, it would not be easy for me to sell my CK Tang shares if I wanted to. Also, the value in the stock might not be realized forever if they do not wish to sell their properties. There is also an opportunity cost to stay invested in a stock that pays little or no dividends throughout the years.

A value investor at heart, I am sad to make a decision but I would like to say so long to CK Tang!



Blogger David said...

[quote]After delisting, it would not be easy for me to sell my CK Tang shares if I wanted to.[/quote]

Hi ghchua, I do not understand this statement in your post. Do you mean that, you still hold the shares after the stock has been delisted? Or it has been forced sold??

10:12 AM  
Blogger ghchua said...

Hi David,

If one did not accept the delisting offer, then yes, he/she will continue to hold onto CK Tang as an unlisted company after it had been delisted from SGX.

It will not be forced sold as the offeror is not going to compulsory acquire your shares if you do not accept the delisting offer.

9:44 PM  
Blogger ZHU_GE_LIANG_PLAY_CS said...

a true investor indeed will have feelings after so many yrs of investing in the company.

ghchua has reached a level where the stocks he held is something like a longterm friendship.

loosing the stock after 6years is really emotional.

kudos to ghchua


1:30 AM  
Blogger ghchua said...

Hi newbie_george,

Thanks for your compliments.

Frankly speaking, I have developed a sense of belonging to some of the companies that I owned in my portfolio, especially those which I held for so many years. I know it is not good to get too emotional to a stock that you are holding, but being human, I can't help but being emotional sometimes.

I guess as long as one have an investment plan and follows through it, it is still ok to have some feeling on the stocks that one is holding. After all, you are still a part owner of the company, no matter how small your stake is.

10:10 PM  
Blogger ZHU_GE_LIANG_PLAY_CS said...

your level is too high...

wait for me... i am still studying EEE in ntu now.. =D

11:58 AM  
Blogger donmihaihai said...

Hi ghchua,

I bet you bought CK Tang cheap enough.

It was in the news that some shareholders hold it for 20, 30 years. Assuming that they did not buy at a high valuation 30 years back, what kind of return are they getting from holding on to CK Tang in the past 30 years?

7:16 AM  
Blogger ghchua said...

Hi donmihaihai,

I am not very sure about that. But I am quite sure that those who bought for the past 6 years should be able to exit with a good profit at the delisting offer price.

Anyway, I heard that some investors bought the stock at $3. I dunno how they did their analysis, but it might be overvalued when they bought it.

4:29 AM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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