Tuesday, May 13, 2014

Portfolio as of 13 May

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With the exception of Golden Agri, and newly acquired Singapore Shipping Corp, most of the counters have already reported their most recent quarter result. 

I sold Nam Lee, and Sabana Reit this quarter, and HPHT in the earlier quarter. I just added Singapore Shipping recently.

I think there is no need to talk too much about the gain or loss, as the table is self-explanatory, also, gains or dynamics, depending on market movement, I shall review more about the outlook.

Lee metals: Unstable

Lee latest quarter report show lower margin of Manufacturing and fabrication business, although business volume increased, the revenue decreased due to competition. As Lee metals usually have supply contracts of 12-18 months, I suspect we might expect more of such rough ride. Nonetheless, I believe the business is sound, with 1.3 cents EPS in a quarter, they can still safely payout 2 cents annually. I didn't include austville earnings that will be recognized this year, as this will be one-off.

Inventories has been increasing, it could be till to the fact that they have bigger business volume and also the expanded capacity is slowly coming into play, but we should keep a lookout for the inventories numbers.

APTT: Stable, growth prospect lowered.

APTT is stable, expect tax issue to be resolved, got approval to expand into Taichung. But with further research, I believe the expansion into Taichung will not be easy. Below is what I posted in valuebuddies:

AM fraser has a report on APTT.

Key point: 
1) There is TALK (only) of refinancing its 2020 debts so that they can payout dividends quarterly. Unless the "new" debts allow significant interest savings with the same runway to maturity (e.g.2020), I do not like the smell of it.

Quarterly, semi-annually, what is the big deal? interest costs savings should be the primarily reason, when management gave such lame reasons, I also gave me the creeps that there is something more than meets the eye. Or maybe the analyst just jumping the gun.

i find the forecast growth of AM fraser too optimistic.

If you look at slide 3 of JP morgan research,
https://markets.jpmorgan.com/research/em...-1258015-0

400K households at greater Taichung include all three franchise area Dali, Shalu and FengYuan. All three at its own, 133k to 188k household, as compared to its hometurf of 400k households. And APTT/TBC is already enjoying the highest 70% penetration rate at hometurf and is saturated (Growth is flat for a few quarters already.)

APTT is going in to "snatch" business, not link up households, it will not be easy. Assuming APTT entry can increase penetration rate of the 3 counters of greater Taichung to be 70%, it will be 18k, 13k, 16k(very rough estimate), about 47k more households, and there is rather a optimistic projection.

I also do not think APTT is striking 3 counties at the same time. 
If we take ARPU of APTT as a guide, 538 NT$ for cable TV,47K household will just yield 1.05 million S$ revenue.

It seems there is too much hype over its Taichung expansion... The growth should come from its "upgrade" to digital premium channels, or its broadband selling. 

But both are moving terribly slowly even in its home turf. 

Anything wrong with my line of thoughts? appreciate comments

Then again, spending capex of close to 60 million to greater Taichung for 1 million recurring revenue, managment cannot be so stupid right??? They are capable of gaining market shares at expense of competitors???

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Hence, I would not accumulate further unless prices fall by a lot.

Lippomall: Stable but overvalued

DPU is 0.68 cents,while nothing to shout about, I am quite happy.

Since, rental guarantee of about 2 million from Pluit Village has expired, but gross income and NPI has not fallen by the same amount as compared to Q4. In fact, occupancy of this biggest mall of Lippo has improved further.

Weak IDR is still a problem, but I am more concerned about operating weaknesses, which is not too bad.

However, at sub 7% yield, there are easy alternatives.

YZJ: Neutral, growth story intact.

Really nothing much to write about. Again the biggest spanner is its HTM, but they have reduced in the last quarter. They will have tax rebate writeback most probably in the next quarter, and relocation fees from their own yards. They are going into to property in a big way, and I believe they will be a meaningful contributor in the future, but the verdict in this segment of the business is still out.

SPH: Unstable

Their last quarter report of their core media business is horrible, but you can look forward to Seletar mall opening. The price is surprising strong too. 

SSC: Stable, visible growth

Readers should read the thread at valuebuddies. Basically, I just checked the fact and find them to be sound and correct. They have 2 long term charters, and a third PCTC are coming next year. They bought logistic Cougar business at a steal. Although yield is at a low 4%, it is sustainable and has high potential for increase by next fiscal year. One should not expect anything more than 1 cents dividend this year. The PCTC fleet growth is the most moderate compared to bulkers, tankers or containers,and yet automobile are in their upcycle. I believe the case for a oversupply situation in the case of BDI is low, Anyway, the third PCTC they are receiving is also on long term charter.

(Read Nick and Learner88 Post)

OK...see ya

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