Monday, May 25, 2020

Random thoughts: Hits and misses during HBL


1) Talking to the presentation screen instead of pupils. Sound silly, but it is not difficult to just minimize the presentation screen to check on the pupils, and just like in the classroom, crack a joke or two with the children

2) Didn't plan activity for pupils to participate in, if they can't listen continuously for more than 20 minutes in class, they most probably can't do that for more than 10.minutes through Google meet

3) Homework should be brought to a minimum. It is difficult to get pupils to do homework after already spending 6 or 7 hours facing a computer.

4) Peer execution of peer evaluation work, in fact, I am not sure if pupils actually even look at their friends' work and compare it against theirs

1) Focused small group sessions that require individual feedback and immediately corrections from me in a seamless continuous loop is quite effective, if done consecutively over a few days.

2) Analysis of pupils' work in details, and not cluster of work. Understand what is their problems.

3) Ensure feedback is actionable so that pupils can do what u say. For example, instead of saying "find the missing info that the Question required from the passage"

Break it down into specific steps
1) what are the key words in the qn, what are they asking?
2) Which are  the sentences that need to be replace, where are the answer area, etc.

4) U need to keep it simple to remember, but yet, able to break it down to smaller steps if they get struck without being seen as a confusing instructions menu

Monday, May 11, 2020

Company prospecting process: Maxi-Cash, Multi-Chem, Hotung, Overseas Family School

Duringthe CB, I have a lot more time. I did some active prospecting.

Lets get to it.

The criteria I used for screening is dividend yield, I set it at 7%, i then look at companies who are still profitable. When I read the companies' businesses, I then decide if it is sustainable, at least after this Covid 19

Several construction cum prooperty developers are giving juicy yield, like KSH and CES. However, they are expanding into hospitality sector to diversify, and I am rather worried about the hospitality sector. First of all, we know Covid19 affected the tourists number, beyond that, air BnB is also a problem. Unless you are an established luxury hotel manager, I would think air BnB is a direct competition to mid-tier short term stay. So I pass. Other companies that I think might be badly affected are Avarga etc

1) Yield is high, and I believe it will continue to be high, in order to feed the dividends upwards to Aspial, the parent company,which I am think is doing worse than Maxi-cash. The relationshop between Maxi-Cash and Aspial is like Vicom and CDG

2) Pawn broking busines should be relatively resilent in COVID-19 environment, when people have problems with cash flow but are still "asset" rich. Comparing to Money Max, and ValueMax, Maxi-cash has the highest revenue in the segment of pawn broking business. So, that is another plus point

3) However, all 3 companies have money lending segment and a jewellery/ gold retail segment. Of this, Maxi-cash did not have a good record, it made losses in the money lending segment in 2018, as compared to valuemax, with a sizeable proportion of profits.

4) The high gold price and generally increasing price of gold, should make pawnbroking a rather lucrative proposistion.

5) What worries me is the high debt to equity ratio. Also, even if I discount the money lending and jewellery retail segment to zero value, the truth is, this covid19 could swing both segments to losses, and the risk of permance loss is significant

1) Muti-Chem dividends is not attractive if you do not take into account the special dividends. Although the "normal" dividend yield of around 5% is still reasonable.

2) It is in the ICT cyber security business, dealing with hardware and software. Something I think the COvid19 will not have a big impact on. Equity to debt ratio is reasonable. But I would prefer a lower entry price (Better yield)

Overseas Family
1) When I realise they pay more than net profits, the story ends.

2) Moving to Pasir Ris from the prime location of Orchard is indeed a crippling move.

1) Hotung has been on and off my radar for many years already. It has for the last 5 years able to pay dividends in excess of 6%, unless you bought at the peak. Since 5 years ago(IIRC), there is always this concern about the lumpiness of their earings, because they are a VC business, abeit being a VC appointed by or working with the Taiwan Government does open up more opportunities.

2) However, if you look at their last 7-8 years of results, their "lumpiness" is perhaps less lumpy than any companies is a cyclical company.  The only year of loss is during 2008 where there is a record low of IPOs. If 2020 turns up to be a bad year, I think I can live with it.

3) Hotung is also debt free, although they did not have much retained earnings as most of it is paid as dividends

4) Also, I believe the "market" conditions might not necessary be bad for Hotung to find good deals to sow the seeds, as valuation comes down, it just not be a good time to harvest.

So after digging through all the notes. I decided to buy Hotung, which is still trading CD, and is just around 10% recovered from its recent low. Many of the counters I owned have made reovery of 20% or more.