Tycoon Oei Hong Leong buys into mainboard-listed A-Smart Holdings

The purchase makes Mr Oei Hong Leong the second-biggest shareholder in A-Smart. PHOTO: SHIN MIN DAILY NEWS

SINGAPORE – Tycoon Oei Hong Leong has emerged as a substantial shareholder of printing and recycling specialist A-Smart Holdings by buying a 20 per cent stake in the mainboard-listed company for around $5.37 million.

A-Smart announced after the close of trading on Thursday that Mr Oei had bought 29.8 million new placement shares at 18 cents apiece – a 50 per cent premium on the 12 cents volume-weighted average price of the stock on Tuesday, prior to its trading suspension.

The purchase makes Mr Oei the second-biggest shareholder in A-Smart, after Chinese entrepreneur Ma Wai Dong, who bought a 52 per cent stake in 2016.

The company was founded by entrepreneur KK Fong as Xpress Print and listed on the mainboard in 1999. It was rebranded in 2016 following a restructuring, which saw Mr Ma emerge as the single biggest investor. A new management team led by chief executive Lim Huan Chiang was also installed.

A-Smart has expanded beyond printing and has become a specialist in the industrial-scale food-waste recycling business. In 2018, it expanded its core businesses to include property development and property investment.

Mr Oei’s investment comes within a year of A-Smart acquiring two parcels of freehold land for property development in Timor-Leste, also known as East Timor.

The maiden development project, Timor Marina Square, is a prime seafront mixed property development comprising two 23-storey buildings housing retail, residential and office units, as well as serviced apartments, in the capital Dili. Mr Oei told The Straits Times that he was attracted to A-Smart because of its ambitions to expand into the potentially lucrative property development business in the relatively under-developed East Timor.

“I see in East Timor, and Dili in particular, what I saw in Indonesia and Jakarta in the early days,” said Mr Oei, who was born and brought up in Indonesia.

“The Dili property market is still in its infancy. The Chinese are already here, developing infrastructure such as roads and ports. It is the right time for a Singapore player to get into the residential and commercial property space.”

Mr Lim, who is a Singaporean, said A-Smart had been doing its due diligence on the Dili property market for more than three years.

“We did a lot of homework and carefully built up relationships there,” he added. “East Timor is a young and underdeveloped country, but with huge potential, especially in oil, gas and commodities such as coffee, gold, copper and minerals.

“There are over 8,000 expatriates there, mostly living in makeshift homes and purpose-built dormitories. There is huge demand for decent rentable properties and good hotels.”

Timor Marina Square is expected to fetch around US$86 million (S$117 million) in the market. Mr Lim declined to disclose the margin his company would enjoy, but hinted it would be substantial. He expects sales to be brisk when the project is launched in 2023, with the initial batch of buyers expected to be mostly nationals from China, Singapore and possibly Australia. The project is expected to be completed by early 2025.

A-Smart did a 40-into-1 share consolidation in 2017 and its stock had risen to as high as 80 cents prior to the Covid-19 pandemic.

But the hit the businesses took from lockdowns and other restrictions over the past three years has sent the stock down sharply, closing at 12.1 cents this week prior to the suspension.

But Mr Oei remains upbeat on the company’s prospects: “East Timor is a very new nation and I am confident that it will develop and grow.

“I am also confident that A-Smart is moving into the right segment there at the right time. It will have first-mover advantage.”

Timor-Leste, which became independent in 2002, has a population of 1.5 million. But 20 years after independence, it remains the poorest and most under-developed nation in South-east Asia.

Its rich resources have, however, attracted many individuals and corporations, especially from Australia and China.

The country has applied to join Asean, and is widely expected to be granted membership within the next few years.

Follow ST on LinkedIn and stay updated on the latest career news, insights and more.