Like the rising and ebbing of tides, companies’ fortune changes. King Wan Corporation is a perfect example of the vicissitude. Having previously been a shareholder of theirs, I am already conveniently familiar with their history.
King Wan of the Past
I first invested into King Wan in late 2012 at a share price of $0.195. Their 2011 balance sheet looked something like this.
At a market cap of SGD68.1mn, it had net cash holdings of SGD18.1mn.
In addition, they had stable and growing profits which were backed by a strong order book in their core mechanical engineering operations.
Based on these factors alone, King Wan would be considered cheap; but what made King Wan stand out was their announced disposal of their Thai sugar associates. These were recorded at SGD45.3mn on the balance sheet. The deal was a gain of SGD22.5mn (about 30% of market ......