My S.W.O.T Analysis For Wee Hur (E3B)

Wee Hur Chart

Wee Hur first caught my eye when I decided to play around with Benjamin’s Graham Net-Net filter after reading Deep Value Investing by Jeroen Bos. If you haven’t read this book, I highly recommend it! It features a lot of case studies where the author applied net-net filter and his thought process behind the investment. At first glance, Wee Hur wouldn’t interest you at all just by looking at its share price. To me, it’s good news because it means that most people overlook this company simply by visual filter alone!

For a start, here’s an interesting point: While share price has gone nowhere from 2011-2016, market cap has grown from S$182m in 2011(S$0.28 as at 14 Mar 2011) to S$239m(S$0.26 as at 26 May 2016).

Without further ado, let’s dive right in!


  1. Net-Net
  2. Current Asset Heavy, Fixed Asset Light
  3. Skin In The Game
  4. Prudent Management



For a start, Wee Hur has consistently been net-net positive and it’s net-net/share is more than it’s current share price! If you have read about the net-net concept before, this means that current assets alone can cover all liabilities. Essentially, every other part of the business is free. I finally get what it means to “profit when you buy”.


Current Asset Heavy, Fixed Asset Light

Current Asset HeavyAnother reason why I like Wee Hur is because it is current asset heavy and fixed asset light. I see them as a cockroach because they simply won’t die so easily! When markets are bad, they shrink. When markets are good, they expand. This is a business that can survive in harsh market conditions, and thrive when the market picks up the pace again! What boils down in this investment is patience, and I’m willing to wait.


Skin In The Game

Mr Goh Yeow Lian, Managing Director and Co-founder of Wee Hur, has an effective 43.48% stake in Wee Hur. I really like it because when management has skin in the game, they would think twice before making rash decisions that may not benefit shareholders.


Prudent Management

They have been in the business for over 35 years and have seen property markets rise and fall.  Truly, “With small companies, it’s all about management.” Wee Hur’s mission statement is “Prudence in our ways.” Over the years, we have seen examples of how Mr Goh applies this mission statement in his business decisions. I had to dig around a little bit before I could find the background story of Mr Goh and wasn’t disappointed by Wee Hur’s humble beginnings and Mr Goh’s story!

“Amazing as it sounds for a company that operates in a highly cyclical industry, Wee Hur has never had a loss-making year. Mr Goh explained that Wee Hur has avoided tendering at ‘suicide prices’ just to secure work. It has also been selective of clients to avoid problems collecting payment.”  – SharesInv 2009 Article

“Wee Hur tenders sensibly, instead of at ‘suicide prices’ just to secure work. And it would look for jobs only with clients that are deemed to be credit-worthy.” & “In scouting for landback in recent times, Wee Hur has turned away from several potential buys because the market prices didn’t made sense to it.” – NextInsight 2011 Article

“But the group is not exactly rushing into overseas projects, choosing instead to be prudent and cautious. “We will rest for a while until this (Australian) project is stabilised.” – BusinessTimes 2014 Article



  1. Lumpy Earnings
  2. Reliance On Property Market Cycle

Lumpy Earnings

In some years, there are many projects and in other years, there are very little. It becomes challenging to forecast future earnings of Wee Hur because size and frequency of projects cannot be forecasted. Earnings also tend to be lumpy in nature as earnings are recognised only upon TOP which could take 1-2 years. The combination of factors makes it slightly more challenging to make any forecasts about Wee Hur compared to companies in other industries.  Having lumpy earnings will also affect some financial ratios used to evaluate the company, and one such example is the P/E ratio. (Use average P/E instead)


Reliance On Property Market Cycle

Property markets are known to be cyclical in nature and Wee Hur being in this field of business, has no choice but to adapt to it. Because of the reliance on the property market cycle, projects taken up by Wee Hur in a particular year can either be very high or very low depending on the cycle.  In the next section, under Opportunities, I will talk more about how Wee Hur is trying to overcome this over-reliance on the property market cycle.



From Cyclical To Stability (Australia)

Revenue Breakdown

As the property market in Singapore begin to get more saturated with properties, Wee Hur eventually scoured overseas for investment opportunities. Not only is moving out of Singapore a significant move, it also marks a turning point in their business as they begin to focus on creating stable source of recurring income. All eyes are on this segment of the business, Dormitory. While we cannot be certain how much of an impact this segment will become, we remain hopeful with the words of Mr Goh who says “Upon completion and with a healthy occupancy rate, the student accommodation can contribute a significant recurring income to the Group.”

That’s not all. The student accommodation is only Plot 1 of 3 lands acquired in Brisbane. “The remaining two plots of land are still in their planning stages for residential development with commercial spaces at the lower floors. We target to obtain approval from the relevant authority for the proposed development by this year.” – Annual Report 2015

We’ll just have to wait and see how everything pans out!



  1. Poor Occupancy Rate
  2. Persisting Weakness In The Property Market

Poor Occupancy Rate

One of the major concerns going forward will be occupancy rate of Wee Hur’s Dormitories. “Our 60%-owned Tuas View Dormitory received the TOP for its Phase 2 in February 2015 and since has
been in full operation. Its occupancy is approximately 79% as at end-March 2016. Since commencement of Phase 1 operation in August 2014, we have been facing difficulties to attain the desired occupancy level and rental rates. We expect the challenges to fill the beds at desired rates to persist as the tumbling oil price has taken its toll on the marine and offshore industry with many companies in these sectors cutting headcount. Moreover, competition will be even stiffer with two new dormitories in the vicinity, together offering more than 20,000 beds, coming into operation in the second quarter of 2016. Nonetheless, we will continue our effort to improve the occupancy rate at desired rental” – Annual Report 2015

Oversupply of beds and a cut in manpower, a double-whammy indeed. We will have to see how Mr Goh plays this one out if he’s serious about going into Dormitories because what happens here, could happen in Brisbane as well albeit with lesser impact since students don’t just get cut off suddenly.


Persisting Weakness In The Property Market

Persisting weakness in the property market will negatively affect Wee Hur in the long-run. I’m glad Mr Goh saw that coming and thought about the importance of having a stable and recurring source of income from the Dormitory business segment.



Wee Hur is quite an unloved and overlooked stock that is trading at net-net level which its peers are not able to achieve. The Goh family has been in the business for 35 years and they have been showing prudence in their management decisions. Their financial position allows them to carefully consider decisions to protect margins rather than boosting revenue at the expense of having a lower margin. “With small companies, it’s all about management.” Having so many years of experience in the trade alongside with the high vested interest of 43.48%, Mr Goh gives me a sense of assurance that he will continue to lead the company to greater heights with it’s mission statement: “Prudence in our ways.”

Aloysius Lee

Aloysius has been investing in Singapore Equities from the age of 18 and is still madly enthusiastic about it. He strives to sharpen his edge while guiding others along the way to snowball their way to financial freedom!

18 thoughts on “My S.W.O.T Analysis For Wee Hur (E3B)

  • May 29, 2016 at 10:51 AM

    for people into value investing, one must also be wary of value traps. It may be a good company as in Wee Hur case, but share price can stagnant for a long long time. I am not sure if this is a good investment idea for most ordinary investors.

    • May 29, 2016 at 11:00 AM

      Hi mslee888,

      Yes, definitely be wary of value traps. What I see in Wee Hur is growth catalyst within this year, which can help alleviate the issue of value trap with growth opportunities. “What boils down in this investment is patience, and I’m willing to wait.” I’m not sure how long is considered long to you, but I’m willing to wait up to 3 years to see what happens. I believe 3 years is a reasonable amount of time to wait and see changes implemented and I’m sure value investors are minimally looking at that sort of time horizon.

      • May 29, 2016 at 12:52 PM

        I consider 3 yrs waiting time still reasonable though sometime I can be a bit impatient at times with my stock investments esp when other stocks are running except those I am holding. Wee hur has been giving yearly dividends record, so I guess this will make the wait more bearable.

  • May 29, 2016 at 12:04 PM

    What you think of CES and Lian Beng? Can post something about them too? Thanks

    I am vested in Wee Hur and both chip mention above.


  • May 29, 2016 at 12:15 PM

    Hi Victor,

    Yes, I think I might do one on Chip Eng Seng! I think it’s a better comparison to Wee Hur compared to Lian Beng. Lian Beng has low gross margin and doesn’t have that net-net I am looking for, for a more apple to apple comparison. Thank you for the suggestion!

  • May 30, 2016 at 10:37 AM

    IMO the only upside is that it holds a lot of short term assets compared to long term. I dont think its cheap enough. With a p/b of 0.7 and lumpy earnings/operating cf, there are other cheaper local property dev stocks.

    • May 31, 2016 at 7:42 PM

      Don’t we all wish it was cheaper? Haha. Personally I’ve missed a few good rides because I thought they weren’t cheap enough.

  • June 8, 2016 at 12:58 PM


    How some writing on TTJ ? This one is debt free and profitable. Though it may not be consistently.
    The major shrhgolder own 75%. So in any good news, the share price may soar ferrociously. Thanks. Pardon my english. I am a chinese educated from Malaysia.


    • June 8, 2016 at 1:16 PM

      Hi Victor, thanks for the suggestion. I’ll be writing on CES next probably as per your request the other time around first!

  • June 10, 2016 at 10:40 PM

    Hi Aloysius! Can you do a write up for Ditech holdings? Its seems like a good company but im not sure if now is the time to buy? Also would you prefer Isoteam or Dutech?
    Thanks for spending the time writing all these!

    • June 11, 2016 at 1:30 PM

      Hi Jack, thank you for the recommendation on Dutech. I will look into it! It’s my pleasure! It really encourages me when you guys leave me comments, so please keep them coming!

    • June 13, 2016 at 10:20 AM

      Hi Walter,
      It’s not different, we just present different point of views! And readers will benefit by having more opinions to make better informed decision. 🙂

      Thank you for sharing the article link, it’s a good read for myself as well. Perhaps I can offer some of my opinions on the article if you’re trying to make a informed decision.

      Point 1 says that it’s not net-net because current asset fell with the recent quarter. It’s true that it fell, because they made a 70m investment into the 3 plots of land in Australia.

      Point 2 talks mostly about corporate governance and I’m not sure if it’s worth worrying so much as it’s based on his opinion and if the Goh family will abuse their power or not is in question. But nonetheless, it’s good to look out for this warning signal.

      Point 3 mentions the Australia project. Management has already made clear that Plot 1 will be completed by end-2017, and plot 2 and 3 will “target to obtain approval from the relevant authority for the proposed development BY THIS YEAR.” The author also made the mistake of saying that Wee Hur is only in construction. In fact, Wee Hur has been in the Development business as well for quite a long time and has been a profitable portion of their business.

      Point 4 is the chart and it’s no doubt that property outlook in Singapore doesn’t look rosy, we all know that. But we also know that property markets are cyclical in nature.

      I applaud the author, Daniel, for looking into the corporate governance though! It’s well-written and the thought-flow makes sense, but author keeps thinking Goh family will ‘abuse’ their powers. Of course, take note I have a biased opinion of Wee Hur, while the author has a biased opinion towards Keong Heong (Wee Hur’s competitor), and you’ll still have to conduct your due diligence before making the purchase!

      • June 13, 2016 at 11:50 PM

        Yo yo guys, Daniel in the house.

        Since I was mentioned, kindly allow me to share my 2 cents.

        Firstly, I have not read Aloysius’s post before posting my thoughts, but having read the post now, I feel the 2 posts are different but not contradictory. Aloysius basically wrote an analysis on Wee Hur as an investment choice without touching much on corporate governance. In contrast, my post was almost solely about corporate governance (as Wee Hur was used as an example to illustrate my point about net-net firms, which was the original motivation for my post).

        Secondly, I feel misunderstood and hence mis-quoted. I would like to clarify on 2 points:
        1) “The author also made the mistake of saying that Wee Hur is only in construction. In fact, Wee Hur has been in the Development business as well for quite a long time and has been a profitable portion of their business.”

        I did NOT mention that Wee Hur is only in construction.

        I mentioned that Wee Hur is “Wee Hur is still predominantly a Singapore only construction firm”
        The emphasis is “Singapore only”, and my point was that until they actually begin profiting from their Australian operations, earnings come predominantly from Singapore. In my post, I have clearly mentioned that Wee Hur was in the business of developing dormitories as well (In fact, the 3rd warning point was all about development of dormitory). I was perhaps unclear and can see how this is instead interpreted as Singapore “only construction” instead of “Singapore only” construction so I would like just clarify on this.

        2) I do not understand the emphasis on “BY THIS YEAR” on the Australia part. I stated that “Development has not begun as of beginning 2016” and any development by this year would not change the fact that they had not actually begun working on the plot as of start of 2016.

        Thirdly, I am vested in Keong Hong but do not feel that I will hence be biased against Wee Hur. To me, I do not feel that Keong Hong and Wee Hur are in a dog eat dog world and hence, both can be successful. This is especially so since Wee Hur is focusing more on Australia while Keong Hong is developing in Maldives. Most importantly, I do not see how slighting Wee Hur can benefit Keong Hong. What I wanted to do was to present a factual (and cited via reputed sources) argument on their corporate governance and practices. But hey, I can see where you are coming from, so guilty as charged

        I agree with Aloysius that it is best if interested investors do their due diligence. Frankly, I would be quite pleased if a stock that I am interested in had multiple points of view. As I concluded, my feeling is that Wee Hur is still likely to be profitable. For me, through my work in the financial industry (no insider information, unfortunately), through my course in CFA and through my little experience as an investor, I am feeling the extreme importance of corporate governance. I do not feel proud owning a company where the directors enter into joint ventures with themselves, but that is me.. I also do not like to eat many things, but that doesn’t stop you from eating those stuff, no?

        Thanks Aloysius for the great insights!

        • June 13, 2016 at 11:58 PM

          Hi Daniel!

          Before anything, allow me to apologise about the misquotation! I must have interpreted it wrongly. It’s really good to have you in the house Daniel! I think we have made our points clear and our readers will definitely benefit greatly from our discussions here. I now understand your point of view and where you are coming from on the importance of corporate governance and I must admit, I have overlooked on such potential issues arising from improper corporate governance. I love these discussions, we get to improve on our investment abilities and learn something from a fresh pair of eyes!

          In fact, I think there are great questions I could pose towards the Investors’ Relations of Wee Hur and get some answers from them! It’s their job afterall! Leave your questions towards them in the comments section and I’ll compile them and ask them all at once! I’ll share my findings here with you, Daniel and Walter, when they get back to me!

          Thank you Daniel for taking time to share your insights and response as well! It’s good to have you here! 🙂

          Walter, we hope you gained a lot out of our discussions!

  • June 13, 2016 at 10:08 PM

    Hi Aloysius

    Thank you for the good thorough analysis as well. It’s good that they are more blogger writing on the same issue here, albeit in a different light. 🙂

    Keep up the good work!

  • March 14, 2017 at 7:38 AM

    Hello Aloysius,

    Thanks for sharing your excellent analysis! May I ask you a question?

    As I compared Wee Hur’s debt/equity ratio, current ratio, and quick ratio among Morningstar, Reuter, Yahoo Finance, and MSN money, the figures differ drastically! It’s in the shocking 30-50 range on Reuter and Yahoo Finance while within the .5 range on Morningstar and MSN money. Do you know why such a drastic difference exists?

    • March 19, 2017 at 3:59 PM

      Hi Siran,

      Thank you for your kind words!

      For these ratios, I believe some of them display it in the form of % while others in nominal figure. For example, on some website it shows 50% while others 0.5. But they mean the same thing. Also, there is a possibility that the formula they use in calculating the ratios might be slightly different as they might choose to include or exclude certain numbers in the calculation of the ratios. Hope this helps!


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