Sunday, October 27, 2013

Updates on my counters- A reflection

Yangzijiang's main suppliers are steel suppliers and the engine parts supplier. Steel prices has been favorable for YZJ, although the fat margins orders of 2008 will not be back anytime soon, YZJ do not have to deal with the high steel price of 2008, maybe that partly explained why its shipbuilding margin can be still maintained at a decent 20%.

Shipbuilding orders are still aplenty, many China yards have been winning orders. I am not actually in a rush for YZJ to fill order book. I think the quality of the contracts are important as well. For example, the recent 10000 TEUs order from seaspan is of lower value than its first contract with Seaspan. Given the slots for shipbuilding is used till 2016, I believe Yangzijiang can afford to be a little more choosy.

Lippomalls next quarter report will be closely watched for currency weakness's impact on its operational numbers. If my analysis of the company is right, it should not affect the cashflow of the business, or the top and bottom line. Indonesia's import is growing faster than its exports, while the bunk of it is  due to import of energy needs, it also point to the fact that the consumerism in Indonesia is still very much alive. I read from lippo malls latest happenings (http://lippomalls.com/main/pages/about-us.html), there are new openings at Plaza Medan Fair, and there are not shortage of events at the malls, so I do hope the operational numbers bear this out. The refinancing of loan is also done at lower interest rate (too insignificant to contribute to DPU), but taken together, if DPU can improve by 10%, yield will be almost 8.8%. (Dreaming, because vested... )

One reason I bought into Lee metals is due to the big pie of construction till 2016 and the one-off Austville earnings. I believe market has not taken into account both events, but of course, there is competition risk. Steel demand is in doldrums since 2009, is 5 years now, if a turnaround is to occur, 2014 or 2015 may be a golden year where Lee metals can fire on both cylinders.

As for Sabana, sigh... Management competence is  a disappointment, but the yield is still supporting the price somewhat, lets hope they deliver on the 508 Chai Chee and fill up the spaces vacant due to the expiry of master leases. Next 2 quarters numbers will tell if the business story holds.

Namlee is another company whereby the business story has sour quite badly since I bought into it. Will wait for the full year report before deciding if I should sell.

Golden agri, I have been waiting to accumulate at weaknesses, but so far has no luck, (or should I say lucky), I will stick to my plan, since the outlook and story generally remain the same, I have no needs to accumulate at higher or same price.

 

 

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