Recently, I attended the AGM of Fragrance. I am a bondholder of Fragrance and hold 100 shares of Fragrance.
What I like about Fragrance and their CEO Koh Wee Meng
- Koh Wee Meng is Singapore 30th richest billionaire
- As Fragrance share price has been on slight downward trend the past few years, Koh has been buying. He now owns at least 85.66% of Fragrance.
- Koh showed great leadership in leading the AGM from start to finish. As chairman and CEO, he lead AGM from start to finish. He answered all questions asked, including those that went to details of financial figures and details. This demonstrated to me that he is really on top of his operations and business. I felt that he was extremely alert and in the pink of health. It was clear to me that most investors who invest in Fragrance, are actually investing in Koh Wee Meng.
- The debts are relatively low compared to similar property companies in its class. Debt to Asset is 0.487 and Debt to Equity is 1.013. I think these debt levels are nicely balanced.
Some interesting facts about Fragrance
- Fragrance Group does not own the Fragrance chain of local hotels. Fragrance Hotels are owned by Global Premium Hotels which was taken private by Koh Wee Meng last year.
- In 2017, Fragrance bought properties and hotels at the rate of 1 property per month. They now have a very long list of properties of properties under development. Koh Wee Meng urged his shareholders to be patient and to give time for the properties to bear fruit.
- Fragrance now owns 8 hotels in UK and 1 hotel in Australia. These should create a good stream of recurrent income when operational.
- 4 Singapore properties are listed for sale
- Fragrance has not been paying dividends for the last 2 years. They are probably on the growth path.
From the questions asked in AGM, I noticed investors seem to think that the Fragrance is expanding too fast. I felt the opposite. My view is that it is normal for good companies to grow – in a sustainable way. Their debts looks manageable for the time being.
As you may know, buying a bond is to lend money to a company. This means that as a bond holder, I am lending S$250,000 to Fragrance Group, which is 86% owned by the 30th richest man in Singapore. Somehow, this gives me some peace of mind to my investment.
If you have time to read, some nice links on Fragrance
Fragrance annual report 2017 can be found here : http://infopub.sgx.com/FileOpen/Fragrance%20Group%20Limited_Annual%20Report%202017_Final.ashx?App=Announcement&FileID=497853
Fragrance business update slides from Mar 2018 can be found here : http://infopub.sgx.com/FileOpen/Announcement__Business%20Update%20Presentation.ashx?App=Announcement&FileID=492445
Motley Fools wrote a good article on Koh Wee Meng a few years ago: https://www.fool.sg/2014/04/02/5-things-you-should-know-about-fragrance-hotel/
Koh Wee Meng bought a A$5.5M island in Australia: https://www.straitstimes.com/asia/australianz/fragrance-hotel-chain-boss-buys-australian-island-for-55-million
Forbes article on Koh Wee Meng: https://www.forbes.com/sites/forbesasia/2014/07/23/property-developer-koh-wee-meng-seek-terrain-in-australia/#3eb5f4b30c54
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