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Is A Possible Spinoff from Yoma Strategic Holdings Ltd In The Works?

Yoma Strategic Holdings Ltd (SGX: Z59) has been the best performing billion-dollar stock in Singapore over the last five years, generating a total return of more than 1,100%.

Over the years, the company has transformed itself from a property developer focused on Myanmar into a diversified conglomerate with a focus on Myanmar.

Although Yoma Strategic’s non-property-related businesses (these include automotive, consumer-related, and tourism interests) are still relatively small, they all provide strong growth prospects, according to the company.

Earlier this month, the company revealed further plans for its tourism business. It announced that a 70%-owned subsidiary, Chindwin Holdings Pte Ltd, would be fully acquiring the Balloons over Bagan business.

Prior to this transaction, Chindwin Holdings already owned 75% of Balloons over Bagan. The move also effectively pushes Yoma Strategic’s interests in the Balloons over Bagan venture from 52.5% to 70%.

According to a media report, Yoma Strategic is planning to merge more of its tourism assets to form a new entity. This new tourism-focused entity would then have a separate management team from Yoma Strategic to independently scale up the business. This would also require the new entity to raise its own funding for expansion.

In the report, Yoma Strategic’s chief executive, Melvyn Pun, mentioned that a possible option is to list the new entity in Singapore to tap into the capital markets here. However, Pun did state that a listing in Singapore is only one possible option.

This development at Yoma Strategic highlights the growth potential of its tourism business and maybe of Myanmar as a whole in terms of being an investment destination.

Having said that, it is still too early to know how the whole plan might benefit Yoma Strategic’s shareholders. Developments in the company’s tourism business – of both the good and bad variety – are certainly worth following for investors interested in Yoma Strategic.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn’t own shares in any companies mentioned.