Wing Tai’s Cheng Wai Keung continues adding to stake; Sarine buys more shares as stock falls

THE Straits Times Index gained 2.7 per cent over the five trading sessions from Oct 30 through Nov 3.

There were 68 filings for changes in director interests and substantial shareholdings in that period, from 33 companies, as well as 46 filings for share buybacks by 16 companies.

Wing Tai

Wing Tai Holdings chairman and managing director Cheng Wai Keung continued to add to his deemed interest in the company, as his spouse Helen Chow acquired more shares.

From Oct 30 through to Nov 3, Cheng’s deemed interest in the real estate developer and retailer increased by 417,700 shares.

Over the five trading sessions, five transactions were reported. On Oct 30, Cheng bought 78,100 shares. On Oct 31, he bought 189,600 shares. On Nov 1, he bought 50,000 shares. On Nov 2, he bought another 50,000 shares. On Nov 3, he again bought 50,000 shares.

These latest purchases bring his total interest in the company to 61.33 per cent, up from 61.27 per cent prior to the transactions.

Filings on the Singapore Exchange (SGX) did not disclose the consideration for the purchases.

The transactions follow a steady pattern of share acquisitions by Cheng’s wife since Sep 8. Before that date, Cheng’s deemed interest was 60.2 per cent.

His wife has bought nearly four million shares over the period from Sep 8 through Nov 3. Over that period, Wing Tai’s shares have fallen slightly – from S$1.3406 to S$1.33.

The stock is down 11.9 per cent this year.

Cheng was appointed to the board of Wing Tai Holdings in 1973 and played a pivotal role in the growth and success of the group’s business. The company, which was listed in 1989, has core businesses in property investment and development and lifestyle retail.

It owns and manages a portfolio of quality real estate developments in Singapore, Malaysia, China, Japan, Australia and Hong Kong. Its retail business represents global brands such as Adidas and G2000 in Singapore as well as Mango and Furla in Malaysia. It also has a joint venture with Japan’s Fast Retailing to operate Uniqlo stores in Singapore and Malaysia.

For its FY2023 (ended Jun 30), the group recorded a total revenue of S$476.3 million. This was a 7 per cent decrease from FY22, attributable mainly to a lower contribution from development properties.

Net profit fell 91 per cent to S$13.3 million, from S$140.2 million, mostly due to its operations in Hong Kong. Wing Tai Properties, its Hong Kong associate, reported lower operating profit and higher fair value losses on investment properties during the year.

Wing Tai had flagged, at the start of August, that it would report a “significant decrease in net profit” for FY23. Its shares promptly began to slide, falling from S$1.40 on Aug 4, before the guidance was given, to S$1.31 on Aug 21.

By the time Cheng’s wife began accumulating Wing Tai stock on Sep 8, the counter had recovered to S$1.36. It rose as high as S$1.46 on Oct 19, possibly on the strength of the buying.

In the past, active share buybacks by Cheng and his family have fuelled rumours that Wing Tai would be privatised.

In 2015, for instance, a spate of share buybacks by the group led to speculation among analysts that the company would delist to avoid paying Qualifying Certificate penalties on its unsold luxury properties. Cheng denied at the time that the company planned to do so.

In 2012, the Cheng family, then a major shareholder, also made a successful partial offer at S$1.39 per share to bring its stake above 50 per cent. At the time, Cheng said that the offer was not to delist the company, but to boost the family’s shareholdings and gain statutory control of the company. 

More recently, in 2017, Wing Tai Holdings mounted a successful S$94 million bid to take its Malaysia-listed counterpart Wing Tai Malaysia private.

Cheng is raising his stake at a significant discount. Wing Tai’s net asset value per ordinary share as at Jun 30, 2023, was S$4.13.

Sarine Technologies

Dual-listed Sarine Technologies continued its share buyback spree over the last trading week. On Oct 31, it purchased 100,000 shares at S$0.29 per share for a total consideration of S$29,091.70.

The transaction brings the total number of share buybacks by the company for the month of October to 20.

The diamond technology company has bought back shares every week since mid-September, with the frequency of these buybacks increasing in October.

From Sep 18 to Oct 31, Sarine bought a total of 748,400 shares for a consideration of S$235,636.46.

Headquartered in Israel, the company is involved in the development, manufacture and sale of precision technology products used in the processing of diamonds and gems. It is also listed on the Tel Aviv Stock Exchange.

Its share price has been on a downward trend since May this year, but the fall has been steeper since October. In the wake of the outbreak of war between Israel and Hamas, Sarine’s shares have declined 9.4 per cent over the past month.

The counter closed flat at S$0.29 on Friday, close to its 52-week low of S$0.28.

Sarine sells tools that help diamond makers and sellers analyse a diamond, cut and polish it, and grade it.

On Oct 31, the company announced that jewellery retailer Stargems would be the first to adopt its Sarine AutoScan system. This is a registration system for rough diamond parcels, which are assortment packs of uncut diamonds.

The system makes it easier for diamonds to be registered close to source, which in turn helps improve traceability for the diamonds in the parcel.

In a press release announcing the development, Stargems chairman Shailesh Javeri said traceability for rough diamonds has become a “pressing necessity” due to policies in G7 nations and developments in the field of environmental, social and corporate governance.