Attractive Valuations @ Haw Par Corp: New Initiation

We, Evaluate Research, are an independent research firm which provides institutional quality research on public mid-cap companies on a global basis. We have recently initiated research coverage of Haw Par [HPAR_SP], a market leading company in Singapore with a market cap of US$1.4 billion. Haw Par is one of the leading manufacturers and distributors of healthcare products globally. The company’s most popular product, Tiger Balm, is amongst the world’s leading topical analgesics with over 100 years of proven success in more than 100 countries.  The company operates an extensive distribution channel located across Asia, America and Europe. Additionally, the company owns and operates Oceanariums (Underwater World in Singapore and Malaysia) and has investments in various listed equities.

We believe Haw Par has attractive valuations and is a strong investment opportunity. The value of investments and cash alone is worth nearly SG$10.24 per share for Haw Par [130% of its market cap] and the other operating businesses add another SG$5.00 per share. This effectively adds up to a share value of SG$15.00 per share. The stock is currently trading at SG$8.30 per share, so in effect, investors are getting the rapidly growing base business for “free” which gives a comfortable margin of safety and provides strong downside protection, in our view.