Note 19: Curious Case of Hotel Grand Central


Hi Guys,
I have been monitoring Hotel Grand Central (HGC) that is listed on line Singapore Stock Exchange and is currently invested with around 10,000 shares. I first invested in it around 4 years ago and have slowly accumulated over the years. I was very attracted to the business due to an innate interest in the hospitality and travel business. The macro factors are clearly in favour of companies/businesses that are able to capture the trend and growth of global travel.
Hotel Grand currently manages hotel in Singapore, Australia, New Zealand, Malaysia and China. As shown are their locations




The current NAV is also valued at 1.92 and at the current price of 1.30 as at 7th Dec 2018, it’s around 32% discount to NAV. Not a huge discount in my opinion. However, what has been interesting to me is the consistency of the dividends and the insider buying.
My conclusion is that the owner is looking at taking the whole business private at a later stage, the purchase over this period is for them to build up their base. They have more than 79% share of the company, and it will take some time for that to be triggered.  However, I won’t be sure of when will that happen. However, at around 5-6% dividend yield, I will be more than happy to have a bet on it and have it tracked on the radar

PS: It’s not an indication to buy or sell.

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