HPL jumps 5.5% after announcing that Ong Beng Seng will step down as managing director

[SINGAPORE] Shares of Hotel Properties Ltd (HPL) surged on Monday (Apr 14) by over 5 per cent, following news that founder and property tycoon Ong Beng Seng is set to step down as managing director.

By 9.41am, the counter was up 5.5 per cent or S$0.19 to S$3.59. The counter gave up some gains and by 3 pm, it stood at S$3.55, still up 3.5 per cent for the day, with slightly over 9,000 shares traded. The company is usually thinly traded as it is a tightly-held stock.

HPL had announced in the morning that Ong, 79, will be relinquishing his position as managing director to manage his medical condition. The property magnate is receiving treatment for a form of white blood cell cancer. Ong will also not be seeking re-election as a director at the company’s annual general meeting on Apr 29.

The company has not named a successor for Ong.

Known for bringing the F1 night race to Singapore, Ong has been embroiled in the high-profile conviction of former transport minister S Iswaran for accepting gifts as a minister and obstructing justice.

He was also named in some charges to which former minister Iswaran pleaded guilty, including abetting a public servant in obtaining of gifts, and one charge of obstruction of justice. The Malaysian had previously been scheduled to plead guilty to both charges on Apr 2. The hearing was rescheduled to Apr 25 to give Ong time to obtain further medical reports on his condition.

Ong’s arrest had sparked talk about HPL’s key man risk. In HPL’s exchange announcement on Monday, he was described as being responsible for “all aspects of the group’s strategic planning and business development”. His stepping down would have assuaged some by removing uncertainty over HPL’s future leadership.

A majority of HPL’s properties are situated in the Orchard Road belt. Closer to Dhoby Ghaut is the Concorde Hotel and Shopping Mall, where it acquired the remaining stakes it did not own last November for S$821 million.

At the Tanglin stretch of Orchard Road, HPL owns properties such as Forum The Shopping Mall, voco Orchard Singapore and HPL House. Investors have paid more attention to HPL since it announced in August 2023 that it had received in-principle approval to redevelop this stretch into a massive mixed-use redevelopment.

Spanning 114,153sq m, the mixed-use project will have a hotel, as well as residential units across two tower buildings. It will also have retail and office space.

Other owners in the Orchard Road area are already in the midst of revamping their prime properties. Ming Arcade is being developed by the Royal Group. Not far from it, Tanglin Shopping Centre is being redeveloped by Pacific Eagle Real Estate, while Ngee Ann City is undergoing asset enhancement. 

For the second half ended Dec 31, 2024, HPL posted a net profit of S$32.1 million, a dramatic plunge from S$578.2 million in the prior corresponding period. It did however, reverse the hotel player’s net loss of S$4.9 million recorded for its first half ended Jun 30, 2024. This translated to earnings per share of S$0.0547, down from S$1.1024 in H2 FY2023.