TICKER H22.SI
ISIN SG1F76860344
Market cap. SGD
2,513,754,828
Shs outstanding 748,141,318

website

Hong Leong Asia Ltd., an investment holding company, manufactures and distributes diesel engines and related products, building materials, and rigid packaging products in the People’s Republic of China, Singapore, Malaysia, and internationally. Its Diesel Engines segment offers diesel engines and automobile spare parts. The company’s Building Materials segment manufactures and supplies cement, pre-cast concrete elements, ready-mix concrete, and quarry products for public housing construction. The Rigid Packaging segment provides plastic packaging related products and container components. It is also involved in hospitality and property development activities. The company was founded in 1941 and is headquartered in Singapore. Hong Leong Asia Ltd. is a subsidiary of Hong Leong Corporation Holdings Pte Ltd.

Strategy:

Return at exit: -2.4%
Margin pressure amid governance concerns
• Rotated out as our model identified stronger alternatives in the industrial sector • Recent 3-month return of -5.9% lags peers despite strong yearly performance (173%) • Thin operating margin of 1.9% and declining EBITDA (-5.3%) signal profitability challenges despite healthy revenue growth of ~13% • Executive detentions at 48.7%-owned China Yuchai subsidiary introduce governance uncertainties and potential regulatory complications • P/E ratio of 19.1 appears relatively expensive given the profitability metrics and operational risks • Still demonstrates strengths in revenue growth (25.7% quarterly) and impressive dividend growth (150%), suggesting fundamental business resilience • This change reflects portfolio rotation based on relative metrics, not a sell signal
Strategies