HL Global's Cash Is Now 173% of Its Market Value
HL Global Enterprises (SGX: AVX) added to the pile again in 1H2026. Asked by SIAS about buybacks and dividends, the board replied that it has not earned enough.
Our April initiation on HL Global Enterprises ended on this: "The S$63.5 million sits in the bank. The question, as it has been for years, is whether it will ever find its way to shareholders."
HL Global Enterprises reported its half year results on 3 August. Cash and bank balances rose again, to S$64.07 million from S$63.48 million at the year end. The shares are S$0.385 [1], which puts the market capitalisation at about S$37.1 million across the 96,334,254 shares in issue. The cash is therefore worth roughly 173% of the entire company, or 177% excluding the 2.4 million shares held in trust for a dormant option scheme, as the company does when it reports net asset value per share.
That gap has widened, not closed. When the Securities Investors Association (Singapore) put its questions to the board ahead of the April annual general meeting, it cited a market capitalisation of about S$45 million against S$63.5 million of cash. Four months later the cash is higher and the market value is lower.
The operating half was fine and beside the point. Revenue rose 12.2% to S$3.19 million on a better first half at the Cameron Highlands hotel. Net profit fell 10.0% to S$406,000: interest income on the cash dropped 30.7%, or S$252,000, as deposit rates came down, which was more than the S$237,000 improvement in the hospitality segment result. No dividend was recommended, in the same sentence the company has used in each of the last three interim filings.
What is worth reading is the board’s answer to SIAS. Asked directly whether share buybacks, special dividends or a broader strategic review had been formally evaluated, and on what timeline, the board replied: “While the Group maintains a positive cash position, it has not generated sufficient recurring profits in recent years to enable the declaration of dividends.” It added that it had considered various capital management and strategic options from time to time, and that “to date, no options have been identified that meet the Group’s strategic and financial criteria.”
Asked separately what drives the discount, the board listed the group’s size, limited trading liquidity, earnings profile, the concentration of its operating assets in a single hospitality location, and “the absence of dividend distributions in recent years as the Group conserves cash for operations and investment.” It named the absence of dividends as a cause of the discount, and then gave the absence of profits as the reason for the absence of dividends.
Both statements are accurate. The listed parent does carry accumulated losses of S$55.98 million and has no retained earnings to distribute from. But a shortage of distributable profits is a solvable problem rather than a permanent condition, and the mechanism is a capital reduction, which does not require distributable profits at all [2]. Two SGX-listed small caps used it in 2024, one to clear accumulated losses and one to hand back cash while loss-making [3][4]. HL Global used it itself in 1990, and the S$12.47 million special reserve still sitting on its balance sheet is what remains of that exercise. It has not proposed another since the 2017 disposals that created the cash pile, and it did not put a buyback mandate to the April meeting either.
Our position is unchanged. The market is not mispricing the cash. It is pricing the chance that anyone ever acts on it.
References
[1] HL Global Enterprises (SGX: AVX) share price and market data, at the 6 August 2026 close of S$0.385. https://stockanalysis.com/quote/sgx/AVX/
[2] Companies Act 1967 (Singapore), Division 3A of Part 4, sections 78A to 78K, on the reduction of share capital, including the court-approved route and the solvency-statement route. https://sso.agc.gov.sg/Act/CoA1967
[3] mDR Limited, “Circular to Shareholders dated 25 September 2024” in relation to a proposed capital reduction cancelling S$27,397,446 of accumulated losses against share capital, the company’s third such exercise after 2019 and 2021. https://links.sgx.com/1.0.0/corporate-announcements/OO9M37GKC7L839S3/819699_MDR_Capital_Reduction_Circular_25September2024.pdf
[4] Global Testing Corporation Limited, “Circular to Shareholders dated 5 April 2024” in relation to a proposed capital reduction and cash distribution of S$0.05 per share. https://links.sgx.com/1.0.0/corporate-announcements/HQ8T8ZBUH7YGHUYT/794834_GTC%20-%20Circular%20to%20Shareholders%20dated%205%20April%202024.pdf
Primary filings (SGX disclosures, no inline citation): HL Global Enterprises Limited, unaudited half year financial statements for the six months ended 30 June 2026 (3 August 2026); full year results for FY2025 (13 February 2026); half year results for 1H2025 and 1H2024; Annual Report 2025; Minutes of the Sixty-Third Annual General Meeting held on 21 April 2026 (19 May 2026); and Responses to Questions Received from the Securities Investors Association (Singapore) (15 April 2026).
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