Thursday, December 16, 2021
Friday, December 10, 2021
I owned shares of the below mentioned counters, and hence have my biases and ulterior motives for writing this post (Evil laughs)
- 1H earning beats 2020 earnings. UOBkayhian biggest earning segment is trading commission.
- SGX trading volume and value for the last 11 months beats 2020 (11 months)
- US market is seeing new high, Thailand trading volume and value for the last 11 months are also significantly higher than 2020.
- If the 50% payout holds (which is the case for many years), there is a high probability that dividends will exceed last year 9.5 cents. (1H EPS is already 11 cents.)
- 2020 EPS is 5.42 NT$, and 1H 2021 EPS is already 3.28NT$
- 2021 there is frequent share buybacks, and this is NOT a yearly occurernce
- 2021 there are 2 vested companies of Hotung that are listed. (None in 2020)
- 2021 NTS$ has strengthen against SGD as compared to 2020
- DPS in 2021 already exceeded 2020
- QOQ deterioration of earnings is not unexpected due to Heightened alert
- Q4 results should bounce back.
- Please read the wonderful article by Squirrel Drey. (One of the best analysis by bloggers for a while)
- As rightly pointed out, steel cost has come down, and with record order book, margins should recovers.
- Management has said the newer contracts has accounted for possible higher costs, and if the steel costs continue to be low, the mix of good and poor margins of contracts would enable better earnings
- Main reason for increase is expectation of special dividends due to spin off of investment business
5) Lung Kee (0255 HK, dual listed in SG )
- 1H 2021 EPS already grown more than 70%
- However Lung Kee did not have a fixed Payout Ratio (Although it is consistently high in the last 4 years)
- Record operational earnings in 1H
- Intern Dividends already increased
- Inflationary environment favours the agri-commodity sector
Silly Inc has a new subsidiary. It is venturing into live streaming channels. Competition is stiff, but SillyInc believed it has a several orginal titles that are going to be a hit, and give other streaming platforms a run of their money. Here are the trailers and introductions of the productions that took place in 2020/21
Sad soap operas:
1) DiaryFarm goats could not be milked
The story takes place in the early 2020, when the Covid-19 pandemic is wrecking havoc and panic in every corner of the globe. The virus caused mutations in some people's brains, and they turned into Covidiots, a state some said are worse than Zombies, because they are actually still living.
The Covidiots cleared supermarkets of food, toilet papers and whatever they can lay their hands on. The opportunists saw runaway demands in the supermarket businesses.
However, sadly, some of the goats in Yonghui China cannot bear milk, and where others supermarket chains are roaring with businesses and rewarded their staff with 16 months bonus, the opportunists got burnt in the market.
2) E.S.R and green is red
The climate change has gather renewed impetus among the political elites and also the investing community. The corporate story began in China, where and listed Company known as TianNeng Power captured the imagination of a silly investor. The company boarded the E.S.R bandwagon, it produce batteries for electric bicycles and mini-vehicles, and spins off the battery producing company in STAR exchange of ShenZhen, and keep the parent company for recycling and trading of renewable materials.
Green is the future, and the silly investor thought his portfolio will be green too, with the addition of this future proof company. Every time the company exhibited price weakness, the silly investor accumulated the stock, believing that he knows better than the market. Will the story of David and Goliath be replayed, or will the market wipes out the confidence of the main character, silly investor?
1) Alibaba and the Magic Carpet that flies in only one direction-Down
This 2021 Remake of the Alibaba Story is not without controversy. Alibaba is a well-known character who beats the odds, outwits the 40 bandits, the Genie.
The 2021 Alibaba show is a collaboration with the Marvel Studio, and Alibaba partners Ant Man in his adventures. It is a bold remake and meshing of Hollywood and CCTV.
However, when many thought that the duo would be invincible, Ant Man got crushed when he transformed himself into a Giant, and is crushed by another Giant Wheel. No one even saw it coming, Ant Man is a 23 billion foot Giant and when it is crushed, all one can see is a axis rolled over Ant Man! Alibaba discovered to his dismay, that he might he have accidently utter the ancient words that unleash the Heavenly Axis.
As the Giant Axis destroyed everything in the path of Alibaba and came towards Alibaba, Alibaba hops on to his Magic Carpet and dives into the deepest Valleys to avoid the crush of the Giant Axis.
Will Alibaba ever raise to see the light again, will Ant Man survives? Stay tuned to Silly Inv Streaming.. …
Wednesday, November 24, 2021
There lived this poor boy, who always passes the gift shop on his way to help his hawker father to clean up his stall. His parents worked hard to provide for him and his siblings. He never had to go hungry or endure the cold. Yet, whenever he passed the shop, he would looked at the Christmas Tree with envy.
From the display windows, he would see images of his classmates, celebrating Christmas, exchanging Christmas gifts, and the adults bringing out the feast for the children.
Christmas, was just like any other days for him. It was just busier than usual at the Hawker Center. He will have to help his father with the business. He would spent the night washing the dishes and serving the customers. Somedays, he would see his classmates on their way to their Christmas Party. They would ask if he would be joining them later, and he would always replied:" I might, if business is good, and we clean up the stall earlier." Yet, he would never join them, he did not know how to ask his dad for money to buy the gift for exchange.
He worked hard, and graduated from university. He made a decent a living, and his aged parents retired. He could now enjoy all the indulges that he could not afford in the past.
One day, he decided to buy a Christmas Tree, and invited his friends over to his house. He played music, was a good host to his guest, and serve his friends with the best food he could find. He thoroughly enjoyed himself, and felt he had arrived.
A few years has passed, he found the Christmas Tree a nuisance.
It was difficult to fit the Christmas tree back into the box after Christmas celebration was over. And the Christmas Tree would have to be replaced after 2 years of use, otherwise the Christmas tree would not look nice.
He also found shopping for the decorations for the Christmas Tree a nuisance and no longer enjoyable
He started to wonder why Christmas Tree always look so pretty in the display windows and not in the house. His neighbor suggested that there are different sizes and models of Christmas Tree, and it is an Art to choose the type of decoration for the Christmas Tree.
One day, he decided to pay a visit to his parents. His parents have continued to lived in the older estates. He saw 4 kids playing at the playground.
They are stacking up rocks and stones, and planting twigs between the cracks. They sang Christmas Songs and hug one another.
He suddenly felt a wave of intense emotions cruising through his whole body, and he could not describe what it is.
He went to a nearby shop, bought some snacks. He went to the kids, and said:" Merry Christmas, what a beautiful Christmas Tree!" He took a photo of it with the kids and pass them the snacks.
Monday, November 22, 2021
Ok... This is a self-cheering type of post.
Not too long ago, I was busy preparing pupils for PSLE, and I requested my pupils to send me their Oral recording. Many of them needed reminders.
So I did this:
Sunday, November 14, 2021
Keppel was out bid by Cuscaden in SPH offer.
I am happy for that. Personally, there is some synergy with the reminding stake of M1 from SPH that comes with the deal beyond property
Given that the bidding is at PB 1, I dun see why Keppel cannot bid for other companies that are trending at much lower valuation,.
HK land is at 0.4 PB, capitaland before restructing at 0.8, and City Dev also below 1.
I do understand SPH properties are mostly investment properties and the capital-intensive part of the business is the part of the business that affect valuation, and the REITing SPH properties would have gotten most of the money back, but that is if the REIT properties can fetch valuation above 1, to worth the battle playing out now. Ascendas and MIT is at around 1.1 and 1.2 PB, I can't see the scale and scope of SpH properties to guaranteed them commanding a premium valuation.
My reactions was "Yes,! Just walk away please, not like u dun have the scale to grow organically or there are no better properties to be bought, if u cannot buy cheap, dun buy."
I am mindful my opinions are usually not mainstream, you can have your differing views
Thursday, November 11, 2021
I have not been blogging for a while. I am not that busy, and I realized I have 2 drafts of blog posts that never get published. I guess the main reason is that I feel these blogs does not value-add to my readers in any way. I can't see how this post is different, but I guess I shall "talk to myself" once in a while.
What a year of teaching in 2021. I never expect a secondary 3 pupil to visit and say "Hi" during teacher's day. The meeting outside the school gate is boring, I felt "loss" when that group of pupils of 2018 came back to visit, I knew they came for others. I received a message to ask me to come to the gate to meet them, but I guess I am never good at socializing (What ironic statement, isn't it), after a while, I just left. The chat with the Secondary 3 pupil happens through whatsapp messages, and we chat for almost an hour. Truth to be told, I used to hate Teacher's Day, it is a very awkward day. I am particular happy this year, that I can have a proper chat with a student. I do not like small talks, but deep, engaged talk. There are so much to talk about, her secondary life, and how she is coping and thriving in a top secondary school, and her attitude towards life. I only taught her for a year in P4, and I am very surprised when I continue to receive well wishes from her this year. Well, almost all pupils will stop visiting or send well wishes when they goes into secondary 2.
The high point is I also had a heart to heart talk with her mum. Although we have known each other for years (She have 2 children), it is only this year we became friends. She told me that her daughter felt that I am still her best Chinese teacher all these years. I was very touched by that sharing. I think I work well with parents, but very few became "friends", with that kind of trust, talking about anything under the son. That trust has a "expiry" date too, usually after their children graduate for a year or 2, contacts will be few and in between, but I am still very thankful for all the friendship built, even if just for a few years. I believed in 活在当下。
I also believe that teaching is about relationship building, about trust. Although that relationship and trust has a expiry date, I am always very thankful for any pupil whom I have the "缘分” to connect with. When they trust me with their problems/ life beyond academic work, I believe some level of trust is established and I am careful not to break it. I believe teachers should be life coaches, a trusted adult, beside imparters of knowledge. While I cannot solve problems of potential divorces, death and sickness of loved ones, low self-esteem, I take every such case that I come across as "God" (I am a atheist btw) arrangements. I will check on them, when they are feeling overwhelmed. Don't ask me how I have helped them in their life, beyond chatting, and referring some pressing ones to counselors, I am not sure what to do. I do not pretend to be a bleeding heart too, and unlike stories that I know, where there are home visits, and real tangible help given, I simply talk to them, and if necessary, also to parents. I seek to influence some of the parents' thinking by slowly engaging with them, but if I feel there is no connections, I do not pursuit the matter too. This, perhaps is a "parent" year, with parents updating me about their graduated children. I also managed to “话家常” with some parents, in hope of slowly planting the seeds of awareness regarding the stress their children feel, without being seem as being noisy. (Although the ironic here again is I am being super kaypo here).
My understanding of pupils also get challenged, this year. I am also happy for that. This is the year, I felt there really is a generation gap between me and them. The annual activity of making a business card for themselves, turns out occupations that shocked me. The activity is unlike the usual ECG lessons, I said upfront that NO doctors and lawyers, unless you are 100% sure that is what you like to do. I ask them to just think of what they like to do, what their ideal happiness is about, and what job would achieve those. I told them jobs that are imagined or do not exists counted too. I usually get 1 or 2 "evil" jobs, but this year, one third of pupils wanted jobs that see the "suffering of others", like squid manager, squid soldier, "body collector", demon slayers etc.
When I watch some of the shows they watch during their short break, I am shocked but the gruesomeness and gore of some of the videos. Of course, there are still many innocent and pure minds, but those are getting lesser and lesser. I ask them to create thank you notes and good bye notes for their friends, and I told them I will get them printed for them so that they can give it to their friends during graduation party. I am quite shocked that some pupils created templated cards, and a number of them can't even pen a personalized message for 1 friend. What I have taken for granted, is no longer true, I must remind myself to be mindful that every batch are different. And this year batch cannot be more different.
Last year, I had a lot of fun with the graduating class, we joke, talk about life, share about music in class, etc. I used to think as long as I keep an open heart and mind, and not be judgmental, I can easily connect with others. It is not really true. Some pupils just doesn't like small chats and are introvert. Initially, I thought they didn't like me, but I later realized they are just introverts. After the PSLE, they are more articulate, I guess the stress also play a part in they clamming up. But they will not and definitely can't talk about anything under the sun with me.
In short, it is a year of abundance of relationship building, the negative or positive.
Friday, September 24, 2021
Thursday, September 23, 2021
Thursday, September 9, 2021
Sunday, September 5, 2021
Friday, August 20, 2021
Monday, August 16, 2021
I finally decided to part way with Diary Farm.
Maybe years down the route, they might recover, or maybe mainland visitors will start visiting and give a boast to the health care and beauty segment. Maybe YongHui loss is one off.
Well, I need not bother myself with all these anymore.
The consolation from this experience is pays off to diversify, at least for a silly investor like me.
The loss of Diary Farm hardly make a dent to the overall portfolio, since DFI is less than 5% of my portfolio, am mindfully restricted any investment at cost to below the ceiling of 5% of total portfolio value. DFI is already close to 5%, I have many counters in the range to 2-4%.
The reverse is true too, if a few counters gain more than 30%, it also hardly move the portfolio.
I need most of the counters to concurrently run to make any meaningful gain.
I must admits the easy money period is over. Time to just sit back and enjoy the dividends.
Having some cash release, might not be a bad idea too.
I know concentration bets is the rogue in recent years. I do allow 1 counter to go above 5% if it is a highly conviction stock, but never will I allow it to breach 10%.
That is my own rule. No figures for comparison, but I am happy with the returns thus far, especially if I can sleep well, and it is not difficult to cut, as and when required.
Saturday, August 14, 2021
Just sharing some of my thoughts here.
Olam is a food commodity trader, processor, producer and distributor. There are a few pieces of good news that I thought but Olam shares are trading a recent low. (Post rights theoretical price should be around $1.6)
Friday, August 13, 2021
Thursday, August 12, 2021
Monday, August 2, 2021
Saturday, July 31, 2021
1) How is their lithium batteries production getting along?
Saturday, July 24, 2021
Friday, July 23, 2021
Saturday, July 17, 2021
It has been 2 years since a pupil I taught graduated.
Recently, I whatsapp her mum to wish her happy birthday.
Friday, July 9, 2021
Just had a conversation with my son and niece as we watch pokemon.
I told them my favorite character is actually Team Rocket. I am not too sure if you catch the series in Netflix, but Team Rocket is really a talented Duo.
They are great cook, engineer business owner, poets and masters of disguise.
They run a super successful masala stall, cook for school children and never failed to build a new innovative robot to catch Pikachu. Mind you, these are robots that can swim in sea, go under water, soar in sky. They even managed to build a robot that prepare wonderful deserts (In Sun and Moon Series)
Best of all, their resilience put Liu Bei in romance of 3 kingdoms to shame. They failed and get "blasted away" in almost EVERY episode, and never really had their "day". Yet come to the crux of major disaster/s, they always chip in their way, albeit insignificant, to help the main characters "Ash" prevent doomsday.
In fact, I wonder if they are moles planted in Team Rocket organization. LOL.
If ever, I could interview an character, I would interview them, instead of ASH.
Wednesday, June 30, 2021
Saturday, June 26, 2021
STI is near 3200. It is at or near pre-covid levels. My initial gameplay is to start to offload some counters to increase cash holding as STI goes 3200. I did not.
Whenever I made a sale, I would have redeployed funds back rather quickly. I struggled with an inner voice that is shouting "greed is creeping in", and cognitive dissonance that claimed there is still much to recovery.
1) STI recovery is lead by banks
A quick look at my companies under my radar, only the banks and YZJ are back to pre-covid level (in terms of price), many counters are still at 5 years low.
If you are thinking of "reversion to mean" as a way to play the recovery theme, I would think there are still meat out there.
Of course, each and every company has a different story, but CDG and CDL are both contemplating a sale of assets (Australia assets or in the case of CDL, injection to a reit), in normal time, these should act as a catalyst of sort for short term price gain.
2) The worst is over and yet no reflected in the share price.
CDL has fully impaired the investment on Sincere, Europe is opening up (Think Euro 2020), while CDL has plenty of issues and problems, I would think it would have put his worst behind it.
I am not talking about Covid, but China Tech companies. Alibaba in particular. Yes, ANT will no longer command an lofty valuation if ANT does a future IPO (a BIG IF), but the impact on Alibaba earnings is small, as ANT contribution to alibaba core commerce in low.
The fine on monopolistic practices is more of a closure than a harbinger of worse to come. If there is no exclusive clause for vendors and suppliers to be locked into a platform, how big will the damage be? I seriously do not see an exodus of merchants, since suppliers will be mindful of potential loss of customers. However, as an insurance, I also bought into JD, so together, there could be no hiding place if a supplier would like to participate in the e-marketplace.
Yes, margin for Alibaba e-commerce business is falling, and China e-commercial penetration might be at saturated point. There are the international wing (SEA penetration rate is nowhere near China), and the whether Cloud business can continue to stay profitability and grow it will be a key factor to watch.
3) Restructuring to capture the new economy.
How successfully companies captured new growth opportunities will determine how the market will start to rerate this companies as "growth" companies. There are plenty of examples, MIT increasing the percentage of data centers as a part of its portfolio, Olam, demerger followed by new IPO, Capitaland transformation into a lodging and fund manager, Tianneng Power increasing focus on New Energy Batteries for PowerPlant Storage and EV.
Most of the above mentioned counters have price well below their 52 weeks high. Tianneng Power is growing in double digits for a few years now, with earning visibility still good, yet it is commanding only a PE of 5. Its PE will compressed further if growth continues to materialize. I believe the company has the ability to increase dividends and put the shadow of the short selling report behind it, sooner than later.
I feel there are still opportunities abound for companies. However, market risk has increased for me, since I am almost fully vested with cash only at 10%, although I won't be losing too much sleep over individual company hit or misses since I am a proponent for diversification.
Disclosure: I have a position on the all the mentioned companies in my post except for CDL, yet.
Sunday, June 13, 2021
Read about this "silent protest" against the mad rat race or/and harsh working conditions(996) in China. It definitely resonates with me.
My few thoughts:
1) It is definitely not about laziness, but helplessness. If someone is just plain lazy, it is very unlikely to become a rallying call. So much so that censorship happens.
2) When we all started, most of us, would have dreams, ambitions and would like to try to climb the ladder, win the rat race. If we are starting businesses, I guess the dreams are even bigger, such as changing the world, making an impact on other lives.
There are others, who did not want a race at the very beginning, and opted to walk their own path. I believed these people will not bother to even write about “Tang Ping" or join the "protest"/ Movement.
These are people are not lying down, they are walking a different path. "Tang Ping" as the word suggests, is a protest or call out for help. Much like a tired child asking for parents to carry them when they are tired.
3) Before we pass any judgements that these people are "pampered" or "sore losers", I do think, most of us, and especially myself, "tang ping" at different points of time.
Tang Ping @ Investing
I remembered just perhaps years ago, I really would like to blog about a sizeable portfolio, and given how many bloggers who are much younger already had bigger portfolios, it is easy to feel disappointed or inferior. Truth to be told, although such thoughts are few and between and never as intense, it does still popped out now and then.
Tang Ping @Work
It is just in recent years, that I decided to walk in the rat race. I am still in the race, but walking instead of running, does give me more energy. I have tried my best to run in the last decade (I did more than 996 for a few years too) and did manage to get ahead.
But after a while, I realize I not interested in running ahead anymore. Hence, I am sort of also "tang ping"ING.
Tang Ping @Social life
I really do not feel like meeting friends, relatives and the sort. I know about balance of life and etc, but truth to be told, while I enjoy having a quick chat with my friends, f2f or online, I really did not like to visit or do any meals. Don't ask me why, maybe I am a hermit. CB or heightened phase 2, really has no impact on me, I kind of enjoy it, reading and sleeping. Tang Ping again
I hope all those who are reading this, you never feel the urge to "tang xia", but if you do, I hope you take it as a rest, but stand up soon enough. You might decide that you do not wish to run, and would like to take a walk instead. You might start seeing people whom you overtaken earlier, overtaking you, but keep walking, until you are ready to run again.
You might also decided that you had enough of that race, and decide to disqualified yourself and walk off without reaching the end. Find a meaningful journey, and walk, run, play along the way. If you find companions, good, if not, I hope you find solace in the journey alone.
I think I didn't Tang Ping for too long in my life. Sometimes, some "gui ren" gave me a hand, and pull me up. Sometimes, I just can't stand the stepping on by others as I lie down, and hence I just got up.
There are also occasions, where like a little child, hoping to hitch a hug and "ride", I protest by "tang ping".
Its Ok to be not to OK all the times.
Its not Ok to be not OK all the times.
Friday, June 4, 2021
My sister alerted me to a facebook group page known as "blessing for those in need".
She told me many people posted things that are still useable, and anyone can ask to collect these items for free. Some kind souls also offer to transport the goods at cost price.
I was invited by my sister to join the group. Recently, as we are doing some spring cleaning, I decided to try posting some items, such as jucier, vaccum flask etc. When happened over the next 2 days triggered a lot of thoughts, and I hope to organize them by writing a post.
When I first posted the items, I am quite surprised that within 1 hour of approval by Admin, someone did want to collect the items. I thought to myself "Great, things will not go to waste, and someone get help" The lady ask for my contact and arranged for Courier to pick my stuff. My thoughts that surfaced (I am cynical person) "Why is a person who is so efficient and resourceful in getting a courier (I didn't know Q express provide such CtoC service) asking for free item? Is she trying to resell the items? Isn't there a cost involved if courier service is purchased?" Nonetheless, I felt that even if she do resell the items, it is to her resourcefulness, and I still fulfilled my goal of reducing wastage. (Doesn't matter that when you first joined the group, one of the rules is no reselling of the items).
When I was posting another batch of items to be collected, I look through what are the items that are available for collection. I am quite surprised to find TV, furniture given away. On the other end of the spectrum, there are very cheap items such as a stuff toy and clothes hangers to be given out too.
I was looking at one post, where a lady is trying to help a friend give away old furniture. Another person claimed to be interested, but unable to pay for transport. I then offer to sponsor the transport and ask the owner if she could arrange. The lady insisted that I settled the transportation on my own, and hence I went about coordinating between the two. It is through this coordinating that I learnt about gogoX and LalaMove, and how transport cost has dropped.
I did not have a good experience, as I realized the person asking for furniture also start to ask for food, and mentioned several times her plight. I did some fact finding, and found out that she is real, and is helped by GiveAsia before. The sum raised is small.
When I left a comment on the post, saying that I am willing to pick up the tab for the person on the transport, to get her the coffee table that she wanted, another commenter who is queuing for the same item earlier, bring forward the possible date of collection. I felt quite uncomfortable about "fighting over" item.
I told the person wanting the furniture that I can cancel the request for the furniture and use the transportation costs to buy groceries for her, if that is "really what she needed" (her own words) She then told me she really wanted the furniture instead, and she could ask her cousin for food instead.
I am not sure about the whole experience.
How much help is enough, and how to make sure the help goes to the deserving.
For someone in need of long term help, constantly trying to get help. is it still dignified. I am not passing any judgement here. Just penning my many thoughts that are swirling around my head.
Deep inside me, the feelings of satisfaction and joy whenever I help someone in the past, is missing this time round. Of course, I am mindful my "help" is of little or no significance.
Just feeling weird that I might have pass the age, where I feel happy, doing a others a small favor. Maybe it is because I realized I might not really make a difference.
Wednesday, May 26, 2021
I read an BT article on 5 investment pitfalls. I thought I blog about it to crystallize my thoughts. I hope I will be able to illustrate the various points made by the author with my own examples.
"If something is too good to be true, it probably is"
I wonder what is considered "too good to be true"? Dividends yield of more than 10%? I remember I used to own APTT, LMRT, Sabana Reit and even SPH at $3.6. Most of them have yield around 10%. except SPH.
Even suspended Qingmei gave an yield of 15% for me, once.
I think there is big difference here between trailing yield and future yield. Looking back, buying counters with trailing yield of around 10% or more usually does more harm than good to my portfolio. There are indeed years where I harvest the above 10% yield, but it is not sustainable.
LMRT issues dilutive rights (present tense is not a grammatical error), Qingmei is a fraud, APTT could not sustained the payout. I was receiving about 11% yield from APPT and lucky for me, I got out of this counter before any damage. However, I wasn't so lucky all the time, and I suffered capital loss in excess of dividends received.
I do currently own counters of yield about 10%, like Hotung, Lung Kee, MIT. They grow into it, when I first bought them, they yield 6-7%, and it is during market correction that throws out such yield, before that, the yield is even lower.
In the area of growers, I get very excited when I find a company that grows around 20-30% in both their topline and bottom line for the last 5 years, and yet trading at less than 15 times PE. I am a novice in "grower" criteria and I do not own a single Tech Stock in my portfolio. Hence, I find it hard to come up with hits and misses. I bought into CSCP believing in their pipeline of drugs (More being developed over the years), and Raffles Medical Expansion into China. I have no track records for both yet, so I will reserve judgements.
"Turnarounds seldom occur"
My investment school of thought is influenced by Peter Lynch Turnarounds and Cyclical Plays. So, trying to buy a counter when it is out of favor is indeed something I do very often.
I remembered SIA Engineering, YZJ, Sembcorp Industries, QAF, Singtel, SingPost, Golden Agri and SPH, Pan United are all purchases based on cyclical upturn analysis.
I have both hits and misses.
Those that faced disruptive forces are counters didn't turn out well. SingPost, new growth area is e-commerce and SPH's property, both companies did not fare well. Both counters are in the red. I deliberately left out Sembmarine but bought into SCI. Nonetheless, I believed SCI will turnaround together with SCM. It is with a stroke of luck that SCM is demerged. I am betting actually on SCI doing infrastructure trusts like Keppel, but it turns out better than I expected. When they are demerged, I sold SCM.
The lesson here is clear, it is difficult to turn ship with a heavy load (baggage). It is easier for companies to outlast an oversupply situation or unfavorable market conditions, than overcome structural disruption. For example, with ESG becoming a corporate culture in boardrooms, I think fossil industry will likely face structural decline in the future. I think I will swear off fossils plays. (Although I did own SInopec, but China is a different story)
The next lesson here is management's alignment to shareholders' interest. LMRT is frequently doing highly dilutive rights and buying assets of questionable quality. Sabana bought a 50% occupied high tech building and has problem filling it up. and management Incompetence aggravated the problem. First Reit has the same owner as LMRT, and they also did a dilutive rights issue, but I see management competence the biggest difference between FR and LMRT. Sabana seem to be faring better now after Kelvin, its ex-CEO left.
QAF has a suffering pork business in Australia, Rivea (I hope I get the name right), it dragged the earnings down. I bought it as I believed that is a cyclical business and the high cost of feeds is due to weather factors that might not be recurring. True enough, the business did better, again (It is not the first time it happens, QAF has been trying to sell the poultry business twice without success). QAF is one of my better performing counter in SGX yielding 7% with capital gains.
Another factor to look at is profitability in the face of downturn. Yes, profits will fall, but keeping company profitability means the chance of permanent capital loss is low. YZJ is the star that comes to mind, having navigating the downturn well with its sideline of HTM business. It is not easy to get a good yield from YZJ and it is difficult to quantified the risk of it HTM business. Nonetheless, I believed these are accounted for in it valuation in terms of PB as compared to industry peers.
Source: DBS research
I also fare better with companies with information on industrial indicators aplenty. For example, in the analysis of Pan United, the price of RMC and construction demand figures are easily available in URA website, this makes modeling of earnings possible. And in the case of YZJ, freight rates, bulk rates, newbuild numbers, are also easily available in numerous websites. Even with these information, I am mindful it is still very much a guessing game. So I practiced diversification in investing.
So how do we know if a company competitive strength is intact. In the case of APTT, the last 8 quarters show a consistent fall in basic cable TV subscribers and while premium digital TV subscribers are increasing, the ARPU is falling. It shows a lack of pricing power with the industry. The broadband segment is touted by analysts as a growth area due to 5G rollout. However, ARPU is also falling and the EBITA is not growing. Taiwan at the verge of a possible lockdown, and I assume its premium TV might be do very well in such circumstances, but after looking at it numbers, it did not instill confidence.
Hence, I believe the better days of turnaround are far from near, although it is worth monitoring.
Selling a winner too early
Well, Venture comes to mind. What would have been a possibly 3 baggers became a 30% gain. For context, I bought Venture at average price of $8, and sold it off at $11
I have also seen Lee metals (Now bought over and merged with BRC Asia) 50% gains evaporated in front of my very own eyes when I didn't sell.
Lee metals earnings get a bump up due to its opportunistic and profitable EC venture. Given that is is non-recurring, I should have sold when the earnings improved as I expected it. The catalyst is non-recurring and I could not understand why I not sell then.
Cogent, which is privatized by Cosco, is another example. It is another 3 baggers. I didn't believe the rumors of an offer. I bought it at 28 cents, and the offer came 2 years later, iirc at 80 cents.
I think if the operating numbers did not deteriorate too much, it might be wise not to sell too early, unless it is OVER-valued compared to fairly valued. Since if the competitive strength is intact, it should continue to grow or recovers from the down cycle.
I am consistently tempted to sell some of profitable counters, but I now reminded myself to sell only if operating numbers show loss of competitive edge over a few quarters.
Buying into false promises
Silverlake Axis comes to mind. Granted, the false promises comes from both management and the delusional myself. I correctly predicted an upturn of earnings as the big projects scored by company seem to be underappreciate by the public and how usually IT system get obsolete after 4- 5 years. I predicted and upturn should come sooner than later. correctly in 2019.
I did make some good money earlier on, buying at 40 cents and selling at 55 cents. But I bought more than I sold, and I average down at 30cent at 24 cents. My thoughts is business will improve after Malaysia MCO is over, and the big projects win will continue. Yet, it is long wait without improvement
I am actually willing to wait it out, given that no one could predicted COVID-19. The red flag is the suspension of dividends. The used to give out dividends in 3 quarters, and while they promised during AGM Q and A that they understand dividends payout is important to investors, they skip an quarter of dividends and blame it Half-Yearly reporting. When is 1H reporting, they have the cheek to skip it again and declare that they will only give year end dividend.
So, I said "GoodBye" to the counter. Doesn't matter if they do better again. if I cannot understand a management or trust it to be aligned to shareholders, then it is a sell.
If you have reading until here. Thank you. My mind is slightly clearer, I hope you are not too confused. I welcome your thoughts.
Monday, May 24, 2021
I did another round of screening for dividend stock for both SGX and HKEX recently.
The criteria I selected are:
1) PE less than 10
2) ROE >20
2) ROIC >15
3) ROA >10
4) Net margin >10
5) Quick and Current Ratio >1
6) Debt to equity < 0.3
7) Dividend yield > 4%
Of the close to 40 counters that appeared, only 3 came from SGX. (Which is quite sad)
After that, I went on to check for consistency or improving trend of the above mentioned metrics, companies that do not give out dividends regularly, or have earnings that are doing a yo-yo are eliminated. I do allow earnings to drop in 2020, given it is a covid here.
About 3 or 4 counters are left.
China Resources cement is the only one that made me pulled the trigger today. First, some numbers
Source of data are from FSM Screener.
The numbers look great for a 7.5% forward yield company, isn't it, with payout ration of less than 50%, and FCF yield of above 10% if you take the 5 years average. 2020 and 2021 Capex is high at 5 billion HKD, company already guided for 2022 Capex of 2 billion which is more like the norm.
Going forward, Q1 results is good, EPS grow 15$ YOY. (https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0423/2021042300455.pdf)
It is my speculation, that post Covid, China will spend more on infrastructure, and this is the thesis, that lead me to buy into Lonking, which has pans out well so far.
Due to the low base effect of Q1 Covid on China, the numbers show a big jump, while margin is lower.
Wednesday, May 12, 2021
TianNeng Power is a company that I recently accumulated due to price weakness. It is the only company nearing the Threshold of 5% of my Portfolio now, and is particularly rare, as it is a Hong Kong Counter, but I find it too attractive to ignore.
First, a few pictures.
Monday, May 10, 2021
This year is the year my son is taking PSLE. Many thoughts keep swirling in my head, and thought I just pen down my thoughts, incoherent it might be.
It is difficult for him. My wife and I have pushed him hard, and I must say his attitude has improved compared to last year, and there is more effort from him. As a primary school teacher, I knew in terms of efforts, or/ and capability, he is nowhere near the top or comparable to diligent pupils who are hungry for success.
Yet, seeing him trying is good enough for me. (I speak only for myself)
We did discuss about a secondary school that he should aim for. I am not sure if he is really interested anyway, likely he is not interested in the school and more interested in the school where most of his friends would apply to.
It is a very surreal experience this year, teaching both my son and my pupils. I have been teaching graduating classes for many years, and this is the year where I really stop and ask myself, does a particular secondary school really matters?
I know it matters because the pupils of that school would become your child friends, you might want to stretch his capabilities by keeping him constantly challenged by other pupils equally smart or smarter. Given school tailored their programs according to the profile of the pupils, definitely different schools offer different programs. However, I am of the view, what he gets, is where he goes. If he did very well, good, and fine. If he slips, he go to a lower tier school, I am fine with it.
What I cannot accept is not putting in effort in the pursuit of academic excellence. Stress, is inevitable in my opinion, and the pupil who got the worst end of the deal and those who do not grumble. Those who are lazy whine the most, although there are always exceptions.
I went to a notorious school. However, it was the best experience in my life. Pei Dao Secondary School used to be in Toa Payoh. The school is a powerhouse in volleyball, there is no focus in CCA, no such thing as DSA in my time, we trained hard, and that means everyday except Sunday during the holiday, and we were duly crowned the National Champions in C division. As I need to help out in my dad stall, I decided to change my CCA in secondary 3, but that experience is really invaluable. I was made the head prefect in my school, I was a useless one at that, but I at least learn to talk to all pupils from both express and normal stream, and try to assist my teacher in whatever way I could.
Looking back, I believed my life is shaped by many moments, and Secondary School, is really about my social view, I never have a problem of a being a snob (I hope others feel the same), I find "ah bengs" rather nice people. If you ask me, the real "gangster" during my time is so much more "gentleman" than the gangsters nowadays. I enjoy the company of anyone, as long as they are honest with me. I had more problems with guarded "successful" people. Maybe It is sour grape mentality.
As I look at pupils in my school, and know of their "life stories" (some are pretty drama), I feel quite sorry for most of them. Are they living the dreams of others? Do they even have a dream? I didn't, but I studied for myself, and as and when as I wanted and feel like. I got 226 for PSLE. I do not feel ashamed about it, neither and I proud of it. It was what I could manage under the circumstances then.
I did volunteer work during my college days, I think that is one of those life-defining moments. Friends that I am still in contact with are friends I know when I volunteer at a hospital. I am still in contact with a few secondary school friends, but we do not meet up anymore.
NS also did shape some of my values.
So, my son, and my pupils. I love you regardless of your results. I hope all of you think academic excellence seriously, and overcome challenges that come in that pursuit. If life is a bed of roses, you need not study so hard. It is not for that last mark, it is to build up that reservoir of resilience. I wonder if you ever feel that the adults have ulterior motives in helping you. I really do not have any, although I do get disappointed when you do not do well.
All the best. It is still 5 months away, but it will be over in a blink of the eye. Take care