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HRnetGroup: What to Like and Dislike About its 6.5% Dividend Yield

HRnetGroup: What to Like and Dislike About its 6.5% Dividend Yield

Okay, at first glance, I never thought much about this Singapore stock.

This post was originally posted here. The writer, Willie Keng is a veteran community member and blogger on InvestingNote, with a username known as @Willie and has close to 130 followers.

Except for the fact it currently pays a 6.5% dividend yield.

Other than Singapore banks and REITs, you typically won’t see many Singapore stocks paying you that kind of dividend yield.

Yet, I was amazed how much cash HRnetGroup has. And almost zero debt.I mean, for a S$780 million market cap company, this is quite impressive.

Let’s take dive in, shall we?

HRnetGroup — a Background

HRnetGroup is an unassuming name.It’s easy to look pass this company. What struck me though, as I looked deeper, was how fast they grew.

Now, HRnetGroup was founded in 1992, then quickly expanded to Malaysia in 1994, and eventually got listed in 2017 — having raised S$174 million in an IPO. Even Temasek also took a stake during its pre-IPO.

Today, the recruitment giant has a stable of well-established businesses – including HRnetOne, Recruit Express, PeopleSearch, RecruitFirst , SearchAsia and PeopleFirst.

Even though it’s not a blue-chip, I found it remarkable HRnetGroup could dominate its market way before its IPO – beating other more prestigious recruitment companies.

Singapore-only revenues of key players in Singapore in FY2015 (in S$ million)
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Is SATS Playing a Dangerous Game?

Is SATS Playing a Dangerous Game?

This is bad. I mean, the SATS/WFS buyout was just poor communication to shareholders.

This post was originally posted here. The writer, Willie Keng is a veteran community member and blogger on InvestingNote, with a username known as @Willie and has close to 120 followers.

SATS’ shares plunged 20% in a day after announcing that the WFS deal was an “all-equity financing” deal in Sep.

This meant SATS shareholders would have to fork out the entire S$1.7 billion sum.

Well, it turned out that wasn’t the case. Later on, SATS clarified the buyout would be a mix of equity, debt and cash.

The funny thing is though, why hasn’t SATS shares recovered?

Disclaimer — I’m no longer a shareholder of SATS as shared in Diligence.

At first glance, I thought SATS made a good acquisition. But I realized there’s something more about the deal.

Anyway, let’s find out what exactly happened.

SATS/WFS deal timeline — What happened?

  • 28 September: SATS announced to buy Worldwide Flight Services (WFS) for an “all-equity” funding of S$1.7 billion. Later, shares plunged 20% in a day.
  • 6 October: SATS clarified how it plans to fund the deal – mix of rights issue, debt and using its own cash.
  • 7 November: The Competition and Consumer Commission of Singapore (CCCS) accepted the SATS/WFS deal application. Now assessing if the buyout would breach anti-competition laws.
  • 9 November: SATS said rights issue will not exceed S$800 million.
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Credit Suisse — Triggering Another Financial Crisis?

Credit Suisse — Triggering Another Financial Crisis?

Last week, Credit Suisse’s credit default swaps yield, or CDS spiked more than 5% (500 bps) in a day, rising more than Barclays’ and Deutsche Bank’s CDS.

This post was originally posted here. The writer, Willie Keng is a veteran community member and blogger on InvestingNote, with a username known as @Willie and has close to 200 followers.

Now, credit default swap is like an insurance policy against a default event on an asset – for example, a bond.

Investors pay the yield on the CDS, also called an insurance premium.

In some ways, a CDS measures an asset, or company’s default risk.

This implies — the higher the CDS yield, the more expensive insuring a riskier asset.

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