14 June 2014

G K Goh - who is this guy?

Came across this company recently and the financials sure look interesting.  The company is an investment holding company.

DPS (SGD) 0.0150 0.0300 0.0400 0.0400 0.0400
EPS (SGD) 0.0172 0.0916 0.1778 0.0609 0.0685
[Source: POEMS.]

Debt level below 40%.  Not over-leveraged.

High gross and net profit margins above 40%.  Looks like a business that doesn't suffer from competitive pressures. Possible moat?

Dividends above 3%.   Its 5-year trend shows that the dividends payout (DPS) have been steadily increasing from 0.015 (FY09) to 0.04 (FY13) while consistently maintaining its DPS below earnings (EPS).  

P/E ratio below 15.  P/B below 1.0.  Which means it is valued below its current worth.

From the information at its website (http://www.gkgoh.com/), the company owns brokerage businesses in Singapore, invests in various retirement services in Australia, with smaller stakes in networks in European cities, property and hotel businesses in Malaysia. 

  • G. K. Goh Financial Services (S) Pte Ltd (100%), a futures and foreign exchange brokerage in Singapore;
  • G. K. Goh Strategic Holdings Pte Ltd (100%), which invests in liquid markets;
  • Habitat Assets Pte Ltd (100%), which invests in retirement living assets primarily in Australia;
  • Boardroom Ltd (81%), an SGX-listed company, one of Asia’s leading providers of corporate and advisory services, providing clients with an integrated suite of Smart Business Solutions, namely Accounting & Finance, Corporate Secretarial, HR & Payroll, Internal Audit & Risk Management, Shareholder Services, and Taxation services in Singapore, Malaysia, Hong Kong, China and Australia;
  • Domain Principal Group (48%), an Australian aged care provider with 56 facilities totalling more than 4,800 bed-spaces in the states of New South Wales, Queensland, Victoria and Western Australia;
  • Eastern & Oriental Bhd (6%), a KLSE-listed property and lifestyle group;
  • euNetworks Limited (9%), an SGX-listed company which owns and operates fibre networks in 14 European cities.
Interestingly, it expanded its ownership of Boardroom and now owns 81% of it.  Boardroom itself is a SGX-listed company that provides support services for many publicly-listed companies and gives out regular stream of dividends. Looks like a very stable line of business.  Many letters that I received from SGX companies carry the Boardroom letterhead on their envelopes.  

    Domain Principal Abbey Garden
    There was a negative cash flow for FY13 and that was likely due to an investment in a 47.6% stake in Domain Principal Group, an Australian aged care services company, as indicated in its 2013 Annual Report. This investment was funded by a combination of cash and loans. Despite which, its gearing has maintained below 40%.  Seems sound and not a red flag.

    Its Malaysian hotel and property investments are centered in Penang and Iskander Region. A touristy place and a growth region. Holds potential.

    A bunch of very different businesses. But each with an interesting story which suggest prudent and stable income streams. Owners pay themselves handsomely, but also collectively own a large chunk of its own stocks.

    In recent weeks, GKG Investment Holdings appear to be buying quite a bit of this stock. On 3 occasions in Jun 14, they have bought 23000, 121000 and 29000 shares. Insider buying is always an interesting indicator for me.

    [Disclaimer: This is not a call to buy this stock. I am only recording this as a reminder to myself why I bought this stock.]


    Anonymous said...


    It is not suitable to use net profit margin to judge gkgoh. As most of the profit comes from associates contribution, I.e it is a one line profit contribution with no revenue contribution,the net profit margin will naturally be high. If a company has only associates with no subsidiary, then it's profit margin is theoretically infinite. So do take note.

    Wishing you well in your investing.


    Lizardo said...

    Thanks M for sharing this insight. Probably applies to all the banks and financial companies as well.