Company prospecting: Fallen angels

Some ideas for 2017? LOL

Fallen angel initially is used to describe the downgrade of bonds to junk status. I remember attending the fifth person's invest X congress that define fallen angel security to that that fallen 90%

I take 50% from its PEAk for it and I have the following:

90% fall Parkson Retail Asia

 

70% fall - APPT

 

About 50% (thereabout), the following:

Sabana

 

Yangzijiang

 

Silver lake 

 

All of them face varying challenges. With the exception of PRA, all are still profitable.

PRA

While PRA has no debts,  its balance sheet is weaker than it seems. It's current ratio is only about 1. Also there is no proper closure to its misadventure in Vietnam. There is emphasis of matter on the amount provided for compensation, and the AR didn't shed much light either. Hence it didn't score well in Coporate governance, especially in the area of manpower (i.e resignations and appointment of very young daughter to very senior post, but such practices is not uncommon for Malaysia companies) 

It faces over-expansion problem. Even it's home turf Malaysia is not doing well. Structurally, it faces Macro-political instability and weak ringgits. Weak currency should boast tourist dollars, but it is not happening and I Suspected it got something to do with the political situation as well as the onslaught of e-commerce

It's star performer, Indonesian's market, has also dulled. 

There is efforts to diverse its product and service offering to appeal to more mass market, if I read the AR and brands they bring it correctly. However, this diversification is carried not from the position of strength and I am skepetical. 

However, if u believe the change in product offerings, reduced pace of stores expansion and year-end festival spending can be the turning point, even for the short term, this could be a meaningful short term trade.

This is no alpha company of cyclical recovery play, but the price is making it interesting.

Verdict: Not vested, watchlist level interest only.

APTT

If u ask me, this company's valuation is interesting. At current price, if u demand a 10% yield, u need 3.8 cents. The current dividend of 6.5 cents is not sustainable, but Mr market is thinking even 3.8 cents might not be sustainable. LOL at 40% cut in payout is already factored in. 

I used to owned it, and I did ask my wife to exit around 68 cents. Still profitable if u take into considerations dividends. Heng.... 

However, I am not touching this. Direct opposition to PRA, APPT's  Taichung expansion  is really too slow. Also, I personally think PAY TV business is dead in terms of Growth prospect. That is why I bought and later sold off M1 but never touch starhub. I consider pay TV a liablility not diversity.

It is so pervasive, the use of apps in streaming of channels or movies/ series; whatever. I am sure all of u heard of VIU, minx etc ... 

I walk past Singtel Mio TV advertising a particular movie, but I have already seen the show. Also pay TV in both Singapore and TAIWAN where APTT operates is not cheap. Basic cable is about $25 a month, and as the name suggests, it's just basics. The broadband business is not growing either. The catalyst has to come from TAi Chung. 

Verdict: Not vested, not interested.

Sabana

Even dogs should have its day or price. But personally, having gone through the fustration with what the management is doing, I will just give this a miss. 

Yangzijiang

I already bought a small stake in this. The reason I bought into this is direct opposite of Sabana, Ren Yuan Lin has successfully push YZJ yard up the value chain of shipbuilding and has shown his business acumen in reading the industry conditions. An alpha company not doubt. 

Textbook theory shows that we are near or at the bottom of shipping cycles. Big names have burst, Hanjin, the remaining in Korea and China are restructuring. BDI and Freight rates have bounced off historical low (this is the worst cycle, with BDI at 200s) 

There is requirement for greener engine and lower emission of sulphur etc, all these possibly creating demand for newbuilds as supply reduced through closure and early scapping of ships

Below is just a screen shot, I have reading such articles more than twice. 

 

There is a clarison research which I can't find now that show how 2016 is a year with abnormal year with high scrapping of ships.

Of course, HTM is a concern, but it is a reason why it is coping in the downcycle.

Also, Ren has hint that he is ready to increase dividend payout to maintain a decent yield (some analysis says 4%) as he reward shareholders to wait out the storm with him. 

Verdict: Vested. Small amount. 

Silverllake

silverlake is another out of favor company. It has stop growing and profits is dropping if u strip off the one-off disposal gains. 

It's recent acquisitions have also cause expenses to increase much faster than both revenue and profits. 

However, the lower profits is due to lower software project revenues, due to the lower capex, the more important maintainance revenue is still growing. 

Also, barring unforeseen circumstances, the milking of GIT can go on longer than what most people think, if Silverlake sell another 6 million shares every quarter, they could go on for 9-10 quarters.  

One catalyst could be a solid EY special dividend.

Verdict: Not vested, but very interested. Keeping my powder dry for a volatile 2017, but will

Most probably get it if it falls further. 

So that's all folks. 

What's your radar for 2017. Share lei. 

Random thoughts: My report card for 2016

At the end of 2015, I Blog about the goals for 2016.

It's quite funny now when I revisit it. This is because I started with 2015 has not been an easy year for me. 

This year, my work in terms of KPI really sucks. My department had a "historic drop" is quality passes. My mum passed away, and the caregiving part is tough. But today, as I penned this, I thought "God" has been merciful and kind to me in 2016. This holiday, I only had a 8 days break, the shortest holiday, but I am still thankful. 

There is a window I felt I am at the verge of depression because I seem to see "suffering everywhere", but I thought in its totality, 2016 is awakening.

I digress. My goals this year, and next.

----------

Health:
Physical--
1) Have at least 15 minutes or longer Jogs at least 52 times
(Once a week, I will allow myself to cheat by jogging twice a week at the second half of the year to cover quota. LOL. Hopefully at least I keep jogging and do much better than 52)
2) Not use the lift in school
3) Cut down on breakfast at hawker centers before work. (not more than once a week)

Verdict: Fail in all counts. F

I am not going to give a number to this anymore. I will eat and indulge as I feel like it, exercise as and when I need it. Bite me.

Mental--
1) To reduce anxiety (Not giving a SMART goal for obvious reasons)

Verdict:

I still feel it. I think I passed. C+ 

I coping. 

Family/Social
1) Bring back the habit of reading to son before "to each his own reading"
2) Practice mindfulness, dun bring back baggage of  work.
3) Bring my parents for walks more often.
4) No using of phones to blog or play games during visits (bo liao right, should be talking to them more)
5) Meet with old colleagues, friends and bloggers.

Verdict: B

Did ok on most counts. Being spending a lot of time as compared to the past with my dad. Managed to meet new bloggers and ex-colleagues. 

Spiritual
1) Bring back the mental habit of "wishing everyone well" at the start of the day.
2) Practice/try mediation 

Verdict: F 

Didn't do both. Cannot even remember these 2 points LOL


Capital
1) Focus on human capital rather than finance/investible capital. Build up competencies by preparing for lessons earnestly and start doing literature review and research.
2) Read more on work related information
3) Stop comparing "money, assets, or networth"

Verdict: C+

Done most of it, although the quality and quantity might not be that good.

Work
除去心魔，找回热诚


Verdict: A-

While I did buckle and cried when my pupils' results are horrible, I recovered very quickly. I start to see clearly myself. 

I had really enjoyed teaching, and my pupils progressed. While targets are not met, it is a number game. While my confidence is shaken, it did not hurt me as badly as 2015. 

It is another "awakening". Looking back, I really enjoyed going to the classrooms most of the time, for both my P4 and graduating class. 

In conclusion:

My mission for 2017 （poem form)

顺其自然，我就是我。

魔是我，我傲视一切。

我修，去些傻气，

能悟多少就多少。

我放不下，就背着。

他妈的累了，就丢下。

丢不下，就坐下来休息。

能走多远，就多远。

想比一比，追一追前面的人，

就狠狠追。

不想追，就不追。

说我没恒心，我答复你：咬我啦

我什么也不是，我什么都是。

真的咬我，我扁你。

随心笔：虚荣心

 

记得念小学的时候，

学校要建生态花园。

校长叫我们都捐钱。

他说前人种树后人乘凉。

他叫我们鼓励父母慷慨解囊。

现在想起来，他应该也对老师施压了。

因为从不管我的老师，

突然知道我的父母是小贩，

叫我鼓励他们捐多一点。

小贩中有捞得风生水起的，我父母不是。

我把所有的积蓄拿了出来-十元。

我叫我爸爸给多一点。

我爸爸很不愿意，

我说校长、老师说的，

他就拿了十元。

我在回复表上写了20元。

老师在班上一个一个地问我们捐了多少。

我骄傲地说$20.

如果我没记错，已经是全班第三名了。

还有一两个也捐二十元，

一个捐了$50，最高的$100。

虚荣-就是想证明自己真的比别人强。

我的新校长还要把最好的25学生放在同一班。

我很想挤进去。我成功了。

我排二十几名。

虚荣-就是没有朋友，被排挤也没关系，因为名声好。

长大了，我学了投资，投资股票。

很多人听到我买股票，都觉得我很有钱或有智慧。

其实我两者都没有，就只有贪念，想赚多点钱。

后来网上很流行把自己拥有的股票价值告诉大家。

有些更棒，股息就已经几十万了。

那时候，为了出位，一拿花红就买股票，

想很快地“入榜”

虚荣-就是没钱也要打肿脸皮充胖子，

想比别人拥有的多。

后来知道自己比不来了，也不想比了。

在灵魂深处的角落，却还在比。

想比幸福，希望自己“与众不同”，希望自己花钱花得幸福，希望别人“吝啬”而失去更多，这样，又能“高人一等”

虚荣-就是不知所谓的卓越感。

都是虚的。荣华富贵。

说不比了，谈何容易。

你以为放下了，其实只是变相的缠绕。

我以为释怀了，以为心魔走了，

其实我就是魔，

魔就是我。

被驯服的狼，还是不是狼？

狼能像蝴蝶一样蜕变吗？

面对自己，才能看清。

看清后，才能接受。

接受后，才能释怀。

释怀后，再慢慢、慢慢地放下吧。

放下的虚荣，不必捡起来。

别回头。

小心它跟着你。

你爱慕虚荣吗？

 

Random thoughts: An online temptation

Lol.

Just talking about an email offer to become an aflilate for a particular subscription. I had always wanted to earn some kopi money from blogging if possible

I had really want to try my hand on it. Especially after some correspondences with the Marketing Manager, the product seems decent enough, and perhaps even of quality. The analysis are sharp and some could really be rather useful for some readers.

I was talking to a few blogger friends and after thinking over it during my holiday, decided to give it a miss. And most probably it will be a while before I attempt anything like that again.

Some reasons for letting the "opportunity" slips:

1) 自知之明（know my limits)

I know my traffic, those who visit my blogs are mostly regular, while some popular counters' analysis might attract higher traffic, I know it's a long way before I can monetize it properly .

2) Competition 

I know the Marketing manager sent a blanket invitation to all/ more active bloggers. I am

Not sure how many will bite. But I have a sense that my readers overlapped with the more popular or established one, so why would they pay through my blog? 

3) Neutrality

I always believe in everyone being responsible for themselves. I blog quite a bit about various companies, if ever, any reader followed my analysis and lost money, I will not lose a wink of sleep. Most probably those who read my blog knows better than me anyway. 

However, I do appreciate the fact that whatever I wrote is truthful to my own convictions, although my convictions might change. I find it a bit hard to trade my neutrality off perhaps for just one or two case of referrals' commission. 

There is advice from a renowned blogger that banner advertisement could still allow me to keep my neutrality. I was really very touched when he keep a lookout for me and kept me in the loop as he banters with the owner. I appreciated it a lot although to him, it is just asking (举手之劳）But, after sitting on it, I dun think anyone will want to put a banner with my traffic. LOL. So ... it goes back to point 1, I know my weight.

4) 初衷（why I started blogging)

Before I started blogging, I was quite inspired by AK ability to earn some "peanuts" just from writing. I though how nice it is to earn some money from writing 

When I started writing, I am so happy when I do get readers. Hey, there are people interested in my blabbing.

Then I start to know a few bloggers, and the community become slightly more friendly.

As it progress, my blog become my personal diary of sorts.

Adsense was the milestone for me. It means I have enough readers to be accepted. Never mind I have not even gotten a single cent for it.

So it came full circle. I think I will continue to just write for fun, to bo Liao, to vent ...

While it's tempting to know "how much" sillyinvestor is worth, I decided to go for "priceless", there is no

Monetary value attached yet, then see "in my face" when I go all out to canvass for online income to realize it is "worthless". Ya, I scare to lose, my skin thin, bite me. LOL

It is a fun experience, and perhaps also an opportunity for me to know myself better. 

All the best to the rest. I think I will earn by selling my expertise ... (give a bit of tuition)

Investment rules for myself to obey in 2017

I realized I have been rather trigger happy. I am going to set these rules for myself for 2017

1) Any buy entries must fulfilled one of the three investement theories. A cyclical recovery play, growth drivers play or strong FCF, negligible debt yield plays.

 

2) All entries must come with a potential exit plan with potential reward. POTENTIAL reward should not be lower than 35% in a entry, to accord for the macro risk that this bull market it marching into its 9th year. 

3) 2017 to exit when potential is met regardless of how well market/ sentiments is doing. 

4) If there is no potential buys that meet the above one or more 3 criterias, than 2017 should be the year where cash goes to 50% of portfolio. 

5) Final most important rule: Obey all rules and accept opportunity cost loss, aka money not earned. Treated it as emotional/ zen training test. 

I have been trimming dead leaves (borrowing and adapting from Farmer), I have sold Lippo Mall Retail Trust and M1. Cash is slightly above 40% of portfolio with the sale and small capital injection of 2K (winks)

Random thoughts: A wonderful Tai Zhong Trip

I didn't have much expectations for the trip. Our family trip overseas are usually stressful more than anything else, when I need to plan for this and that.

This time round, we went together with my wife's cousin. It is a trip planned by them. I thought it's one of those boring trips with commercial demonstration and buying

But, This is a trip that I always wanted. Getting close to nature. The Feng Jia night market isn't too bad too. But really what recharges me is the beautiful scenery.

When I am having lunch at 纸箱王，a restaurant with all furnitures and cutlery are made of papers, I have this grateful feeling that I am able to afford this. I always feel like a waste of time and money when I goes overseas, but not this time. 

 

The Taiwanese has a sense of humor. Their male toilet is call, 观鸟室，and female toilet call 观鸡室。it's not a cheap naming, but really birds and chickens on display inside the toilet. Obviously there is a reason why I can't show photos in the 观鸡室。

 

 

The view at 清境is really nice, we went to the top of the mountain, it is really frecking cold, but the view equally breathtaking.

 

  

 

I feel at the top of the world. I tease my wife and feel like we are dating again. 

One of the moments, I would like to turn back clock.

 

The words at the back is "时光隧道”，my wife ask me why not take a photo at the train station instead?

I said, I wish I can turn back clock and be with you all over again. LOL ... 

Seldom have the mood to “siao Kian" my wife. 

Accordia Golf Trust

I didn't see much views about the potential privatization of sponsor by MBK.

Reading about the tender offer, offer a few insights that I think are important but not reported by the various news agency.

1) “Year 2020 problem”
It means a problem that may cause a reduction in golf demand in circumstances where a majority of postwar baby-boomers who lead the current golf demand will be over 70 years old.

My thoughts: It is a direct conflict with AGT's management claims that the seniors have more time to play golf and it is a opportunity. Also, 70 years old is arbitrary figure isn't it? 2017 could well be the problem if 67s are not healthy enough to play golf.

2) It is stated that "MBK Partners Group was interested in investing in the Company, had agreed to the Company’s management model including the Circulating Business Model".

The Circulating Business Model consist of the asset light strategy, but the focus is on the upstream expansion of golf courses and upgrade of existing courses, and also with a look to overseas expansion for strategic alliances.

So, if the sponsor-to-be if going to buy assets at a quickened pace, the greater the probability of asset injection, isn't it? That is when the puzzling statement came in:

"However, after the implementation of the asset-light strategy using the business trust, although the Company prepared for selling to AG Asset the golf courses owned by the Company, because the unit price of the business unit of AG Asset remained low, and it took time to discuss and coordinate with related parties, AG Asset is unable to raise funds for acquiring the golf courses owned by the Company"

Stripped off the corporate structure, AG asset basically refer to the Accordia Golf trust. It is very obvious management 's intent is to raise funds through placements or rights, instead of debts. Otherwise, why does the low unit price matters?

My final thoughts:

Will MBK be able to find partners? Will AGT become a dumping ground? A strong sponsor is good only as far as it willing to be fair to shareholders. Case in point is the difference the past LMIR and Ascendas Reit. Both have strong parents. Look at Ascendas's recent acquisitions, while the purchase price might appear pricey, there are reasons to explain it. Lipuit Village, anyone? 4-5 years after it is acquired, it occupancy still did not cross the nation average of 85%. But Kemang Village is finally yield accrretive.

AGT's price has been retreating abeit very slowly while STI is going strongly.

I thought such pessimism is rather uncalled for. First, the privatization might not go through, the major shareholders just owned less than 30% of Accordia Golf Japan.

Assume the deal goes through, it will again take a while before the "upstream" actions flow "downstream".

  

Random thoughts: Human capital

Human capital? 

What comes to your mind? 

The amount of money your skills and network can generate, payoff? Right? In simplicity, our work. 

My work for the year 2016, is drawing to a close, as usual,I am going to review my human capital.

When I started 2016, I wrote E3. I want to do be effective, efficient and engaging in my teaching. I think I done all three. I do not want to review how effective, neither do I want to put a value to it, I know I have make a conscious effort in these areas and I made progress. Period.

That is the capital part.

Now the human part. 

That is the high point.

I never thought I would almost break into tears talking about a pupil. She did very well for my subject. In the past, she would already be a asset to my KPI, a plus, a cause for joy. But because she did badly for the rest, she couldn't get into even normal stream. Whenever I think of her, my heart aches. Human... 

I have a colleague just gotten married. We discuss work even late into the night, and it will go on to philosophical views on teaching, people and expectations etc. 

On the day after her wedding, she texted me to thank me for attending the wedding. She told me she felt like crying when she saw me. 

She said she wanted to take a picture with me, made me feel like her father. Human... She said she really appreciate the trust and confidence I have on her regarding her work.

On the last day of school day, my co-form organized a class party. My pupils ask me for ice-creams LOL.

I remembered jumping with joy when running towards them at the canteen. Human... I felt like a little kid again. My pupils start bringing food to me, some told me their mother prepare it with them, so just wanted me to taste more food. I felt like a star.

I remember telling a mother during end of year meet parent session, that her daughter is visibly unhappy from semester 2 onwards. And in term 4, even more visibly so. I was rather afraid that I might make things worse. But luckily the mum felt apologetic and when I checked with my pupil the next day, she told me her mum did sayang her and told her that she is sorry for pushing her so much. But the weirdest thing is, I felt no positive energy from her. 

I even manage to have some exchanges about work, life, philosophy about academic pursuit with a parent, something that never happened in my past decade as a teacher. She even send me videos about a wonderful teacher, how that teacher touched life. That video is how we use human capital not to prosper, but help others. 

My supervisor ask me, what is my high point. I told her help my colleague get a good appraisal grade and see her smile when I told her she finally made it... 

The dark side of human.

I lost quite a bit of self-confidence, self-doubts about my capabilities as a manager has set in. 

I remember, only ticking "communication and team building" as strength in the list of areas in my review paper. I can't honestly think of other strengths.

In fact, this post on review of human capital, I can't find anything else to write, except people. Can't write results, systems set up, culture etc. 

But it's ok. Its what that matters most to me. 

How has your work been?