Should I sell Chuan Hup? ?( @ 82 cts CD)

Chuan Hup has been my favourite cash-cow counter. I invested into this company in Sep'00, acttracted by its high dividend yield and the prospects of having stable income due to the US1B coal transportation contract over 10 years signed in Indonesia.

This investment proves to be a fruitful one as the management has been very investor friendly by being generous with dividends (the fact that the top management are shareholders too) and finding ways of unlocking the value e.g. spinning off CH Offshore and giving existing shareholders of Chuanhup free shares. The results of the company has been fairly good and over these years with the dividends and CH Offshore shares, I have recouped all my initial investments.

The ultimate unlocking of shareholder value came recently with the announcement of sales of the core marine business to a Malaysia group, Scomi. In conjunction with this sales of business, a special interim dividend of 1.9055cts gross+42.4756 cts DPS will be distributed to the shareholders. After this exercise, CH will be a holding company of various associated companies e.g.PCI, CHO & Scomi. No doubt CH can still participate in the growth of the marine business via Scomi, CH would lose operational control and hence the cashflow from the business. Therefore, it is likely that CH will be more of a "shell" company and its ability to distribute dividend would be dependent on its associated companies.

What should a shareholder like myself do now? It is for certain that the share price will fall to adjust for the dvidend and the catalyst for future share price seem limited. My original plan of milking this cash-cow seem also to reach its peak with this exercise.

I feel that it may be the right time to take profit before it goes ex-CD on 1 Dec 05 and to divert the proceeds to other companies. Hopefully, I can find another company to the likes of Chuan Hup soon...