CHW's business strategy was initially focussed on origination in specialty commercial and consumer lending. Due to the rising rate environment over the last year, this startegy has of course been challenged while the broader financial services industry also took a hit. CHW did not put out many specifics but did state, "Alternatives may include the sale of certain assets, a wind down of portfolios as well as other strategic options." This review seems like the company is responding to what was a tough operating environment in 2023 and is trying to redefine its strategy to maximize shareholder returns. With limited information on the alternatives we will have to take a wait-an-see approach, but it is positive to see management reacting to what had been a weak 2023. BUT.. we find the dividend suspension a bit suspicious, and the timeframe of the review is indeed very short. The company has never gotten a premium valuation, but likely is worth more than current prices. It is possible that there is a suitor circling, but the dividend suspension is unusual if that is the case.
5i Research Answer: