Are The Major Shareholders Of Poh Tiong Choon Logistics Limited Selling Out?

According to its website, Poh Tiong Choon Logistics Limited (SGX: P01) is one of the largest land transport providers in Asia’s logistics industry.

The company has a long history given its founding in 1950. Over more than six decades of operations, Poh Tiong Choon has been a family-owned and family-managed company, even after its listing on Singapore’s stock market in 1999. But things might change soon.

The company halted trading in its shares on 20 September 2016. This morning, it lifted the halt and announced that its major shareholders are “seeking a strategic review relating to their shares in the Company.” It appears that the shareholders in question, including the family managers, are planning to sell their shares in the firm. The shareholders are:

  1. Poh Choon Ann (Pte) Ltd
  2. Poh Sin Choon (Pte) Ltd
  3. Pho Choon Her Investment Pte Ltd
  4. Nelly Rolles
  5. Ho Kim Lee Adrian

Poh Tiong Choon had a great year in 2015, with its net profit almost doubling to S$15.0 million from 2014. Moreover, a recent Business Times article highlighted that the management team is still trying to grow the company by increasing its warehouse and office spaces.

These begs the question: If profits are up, and there are clear plans for growth, then why are the main shareholders planning to sell their stakes? And for a company that has been family-owned for 66 years, what would happen to it if the main shareholders leave? Will the deal lead to a buyout of the whole company? All these are still unclear at the moment.

The market is not too worried about any implications. Since the start of September 2016, even before the company had made any announcement relating to its shareholders’ intention to sell, its shares have been climbing. From a close at S$0.79 per share on 1 September, Poh Tiong Choon’ share price has gained 65% to S$1.33 at the moment.

At its current share price, Poh Tiong Choon has a trailing PE ratio of 19 and a trailing dividend yield of 2.3%.

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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.