Teckwah Corporation

Teckwah Industrial Corporation (“Teckwah”) is one of the largest printing and packaging player in Singapore. It has also built up an attractive and growing logistic and warehousing business. Despite the firm’s ‘cash rich’ balance sheet and ownership of key properties such as its newly constructed headquarter (Pixel Red) in Tai Seng, Teckwah’s share price has consistently traded at a substantial 25% discount to its worst case ‘liquidation value’. Dividend payout has remained the same since 2011 with the firm generating a paltry estimated shareholder return of only 27% over the past 26 years. 

Engagement topics: 

• Return of excess capital back to shareholders 
• Clear Return on Equity target of more than 15% 
• Sale and leaseback of HQ to unlock development profit, return of capital to shareholders 
• Focus on growing logistics and warehousing business  
• Wind down and sale of shrinking printing business 

 Outcome: 

• Teckwah’s 3 biggest shareholder offered to privatize the firm at S$0.65, a 43% premium over the 12-month volume weighted average price 
• Quarz exited the position with a return on investment of 54%