Random thoughts: FIRE for 2 weeks.

For the past 2 weeks, life is like retirement. Since a long time, my mind is totally free from work, and the last 2 weeks is Netflix, Games, volleyball, reading and some investing prospecting 

It is kind of like achieving FIRE 🔥

But I am actually looking forward to go back to work. I know when the time comes, I will feel "Sian" and as the grinding starts, fatigue will makes me a grumpy person again

Yet, I am kind of happy that I no longer fears work, and I actually looking forward to know new pupils, I will be teaching a younger level of pupils next year. 

Because of Covid, there is also no big overseas trip to plan, and I can really "Nuan" at home.

It is a time of classics, I start watching "Naruto" with my son, "Lucifer" with my wife. With the me time afforded, I read old titles like "the best I could", "is easy to cry". Those are really nice books/ biographies.

Covid has changed me. It brought me the hermit in me. I have turned down several invitations to meet up. The funny thing is, I dun really feel "lonely" or "upset".

Spending time with my son, and my wife, and myself seems good enough. Maybe at my future funeral wake, my family members can't find visitors for me, but we'll, it would not bothers me then.

There were several occasions where I have heart to heart chat over the WhatsApp with ex-pupil, parents, and I find those conversations insightful and many a times, quite deep sharings. Somehow, I prefer those unreal virtual sharings than a crowded meal with superficial talks or reminiscing the "past"

Sadly, perhaps, I didn't really have close friends to begin with, and this Covid Pandemic just exposed the sad truth. But well, I wish to call myself a loner since my college days, so I guess it is subconscious awareness. Luckily, the fact didn't overwhelmed me with sad pity.

Random thoughts: These stocks will likely increase their dividends in FY 2021

NOTE: 

I owned shares of the below mentioned counters, and hence have my biases and ulterior motives for writing this post (Evil laughs) 

1) UOBKayhian

• 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.)

2) Hotung 

• 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

3) ComfortDelgro

• DPS in 2021 already exceeded 2020

• QOQ deterioration of earnings is not unexpected due to Heightened alert

• Q4 results should bounce back.

4) YZJ 

• 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)

6) OLAM 

• Record operational earnings in 1H

• Intern Dividends already increased

• Inflationary environment favours the agri-commodity sector

Conclusion:

It is important to note that the above POSSIBLE dividends increase did not take into account any price increase that has already taken place. However, most of the price increase with the exception of Lung Kee, seems modest. 

Random thoughts: SillyINC Streaming Channels

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? 

Thrillers:

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.. …

Comedies:

1) Hotung 

Hotung is a Hot Taiwanese Chic who came to work in Singapore. She is a filial daughter who gave money regularly to her parents, yes! Parents. She has daddy issues and do a lot of freelance works, some years she earn more and some years she earn less. 

When Covid struck, and many projects dried up, many of her supposedly "parents" dumped her, thinking she will no longer be the money tree. Yet, instead of dying, she thrives with her technological projects as hot as her looks... 

2) Ho Say Bo? Calvin 

At the height of the Pandemic, Calvin company went into troubles, or it seems. It has problems paying dividends to the shareholders and disgruntled shareholders whistle blow and spread rumors that Calvin have helped moved illicit funds. 

The seemingly distressed Calvin is however, a master tactician, who has everything under control. Ho Say Bo? Calvin? appeals to the dialect speaking region, and the humorous yet cunning Calvin always replied Bo Ho Say, who is the greater fool?

Romance:  

1) Yangzi and Ah long

The story of kawaii Japanese Jiu Jing Yang Zi who worked in a shipyard. The flower of the dock had a husband who is a "Ah Long", high interest creditor.

Contrary to convention wisdom, despite the many naysayers and objections, they have built on each other strength and loved each other. They overcome many obstacles, yet, just when Yangzi is doing very well in his company, rumors has it that they are planning to divorce. Yang Zi has confirmed that the rumors are true, but "Ah Long" is still not sure how the parted couple are going to be in their separate ways. Will they have a chance together again? The truth is, there are many suitors going after YangZi and Ah Long has also found a tai-tai that said she could help him expand his credit business. 

Is money always the cause of the end of love?

-----------------------------------------------------------------------------------------------------------------------

Silly Inc hope the highlights of the shows have got you intrigued. Do leave a comment or a rating after you have subscribed and seen the show. 

Random Stories: The Christmas Tree

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.  

 

Random thoughts: Touching Thank you cards

 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:

During the last day of school, I received this

It just brought a smile to my face. They do appreciate our efforts.

There is also this very dreamy girl, always drifting off or doodling in her book. She did this for me.

She is so talented isn't it? But when I am teaching, and see doodles in her work, I am not sure to laugh to cry. But true to her style. She also dreams or doze off when doing this card. 

 

Hahahahha... Funny hor... The little joys in teaching

Random thoughts: Keppel lost the battle but won the war,?

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

Random thoughts: The highs of teaching in 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.         

  

Timed the market or time in the market?

Actually, how about both?

Both are not mutually exclusive. 

If u got in at a market high, u need to spend a longer time in market to earn the MOS ( margin of safety), if u timed in correctly, u are less at risk leaving the portfolio to gain dividends. If u are able to get baggers, u can profit take and it became zero risk, until u put the money into use again.

CW call it trading around core positions. 

Doesn't matter the semantics, the important part is portfolio allocation into Cash or other equivalent asset class. The percentage of which is trial and error, until u find one that works.

But either way, u need to need some FA knowledge. Seriously, if u listen to Gurus talking about TA, like Gupta, ( not sure I get it correctly ), I think he can shame many FA wannabes with his analysis of macro themes. He just didn't box himself in semantics. Doing charts doesn't mean u are TA purist. 

Most things come with 2 sides. Pick a side to start, not to stay. I guess is sound advice. 

随心笔：烦

 烦是因为躲避。

不躲了，也烦。

累了，病了。

要的是关心，不是唠叨。

忙，是心甘情愿，要的只是珍惜。

累，可以适应，不能接受的是被当成理所当然。

关心的到底是别人，还是自己。

一步一步，慢慢走下去。

好的，好好享受，

不好的，让它来，也让它走。

随心笔：回忆

缘分带来了，惜福。

走了，留在回忆。

回忆是美丽的。

愿意和现实交错，

故地重游，找到初心，

然后就离开。

现实也是回忆。

时间罢了。

珍惜现在，活在当下，尽量过得精彩。

不要去渴望未来，

该来的，在于现在做了什么。

回忆，要在与现在做了什么。

不奢望回忆再出现在眼前，

让你在过那段日子。

就算时间能倒转，

你也不是当初的你了。

潇洒地留在心里。

毕竟感动是真的，

感恩活着。

随心笔：教师节2021

 这几年都提笔写教师节的感受。

这几年都很伤感。

今年不同。

交了一个朋友。

思念的毕业生，好多再“出现”祝福。

很满意的教师节。

好久了。

也许，要求低了。

但是，看到学生尽力用华文写出感谢的句子。

真是句句珍贵。

谢谢，本来越来越觉得迷惘。

现在从外在找到了一些动力。

感恩。

其他辛劳的教师，也教师节快乐。

假期好好休息。

Random thoughts: Right valuation usually appear only during the wrong time

In investing, if we want to manage risk, there are a few ways.

Last week, I talk about diversification. I was referring to diversification into more counters as compared to concentrated bets. 

That is just one side to diversification. The other side is diversification across asset classes, so u are not heavily vested in just equity. Textbook theory talks about Bonds and Equity. I guess for me, my only meaningful asset class diversification is CASH. 

Today post is more about valuation.

It is a key part of FA, a great business with good fudementals must go hand in hand with a great valuation.

The ironic is, given market is effecient most of the time, u can only get great valuation at the wrong time.

2 ways IMHO, and both happens in the wrong time.

1) You get the good valuation in the future.

The company valuation seem high by today standards, but u projected the earnings for the next few years (I could only do it with confidence maximum of 1 year projection, beyond that is usually just a good guess) and see a compressed valuation.

So u dun get a good valuation NOW/ YET, u let the company grow into a good deal.

2) When bad news that do not really affect a company structurally in the medium to long term break, and sentiments are weak, u get a good valuation NOW, but u have to wait out the poor results that u expected (yet overly punished in terms of shares price) and for sentiments to normalised to get your good valuation.

Conclusion:

The company (mainly, although I could find a lot more examples) I have in mind when I write this article is Alibaba.

It is more of 2) Than 1)

Of course, regulatory risks is scary. Would they suddenly declare all platform companies should be for "non-profit", like what they did for the education and tutoring sector? 

If the tutoring sector "dies" parents still get tuition, they just can't go to the centers. If a significant number of pupils do not have tuition, it is aligned with making education more equitable.

As for platforms, they are a "livehood" for many workers. The cost for big internet companies should increase, as the central pushes for more benefits and safety net to these gig economy workers. 

While without doubts, as this trend unfolds, margin will get squeeze and some merchants might quit the platforms ( with data restriction and privacy issues, it might not be as easy to find customers ), but net net, improving the lives of gig workers is a worthy cause if u ask me. Merchants, platform owners and consumers should be able to find a compromise to share the "social cost"

Tencent, Alibaba and other big internet companies are also pushing into various strategic areas that the CCP hold dear, AI, cloud etc. Will the CCP deliberately make them weaker? I seriously doubt so. 

Of course, there are other political reasons beyond the balancing "invisible hand" and "centrally planned hand" of the economy, but to say is all about toeing the line, it is properly untrue, since Tencent is the quiet poster boy and had it equally hard. 

I did accumulate more of Alibaba when it hits the trigger rule of 25 percent drop. I am not sure how it will turn out. Guess if I fail, there are lessons to be learnt again.

Cut loss: Diary Farm 30 Percent loss.

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.

Company prospecting: Olam

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) 

Yet, they recently announced record earning and has firmed plans for demerger of OFI to primary list in LSE and secondary listing in SGX. 

Given commodity prices has a good run, and with 1H earning of 11 cents, even if they only 4 cents in 2H (Which is highly unlikely given the elevated food prices, as well as worries over supply disruptions and inflation etc), Olam will be in the PE range of 10. 

Olam also increase dividends in 1H, signaling the confidence of management. 

In terms of valuations, this is the first time in a decade that you will have a chance to get a "discount" in terms of PE of 10 (Lowest), and with PS and PB below 0.15 and 1 respectively. (Barring big writedown of assets due to big swing down of commodity prices.)

If earnings is good, expanding, and there is no obvious dark clouds in the horizon, why such low valuation?

Next, when Capitaland announce it's restructuring, everyone cheers!

When Olam announce it's restructuring, people cheers then start dumping? 

Next, is commodity super cycle coming?

Since June 2020 the price of food is on a tear, 

Even the high prices continue, it is a bonus, if it doesn't, I hardly think with the restructuring going on, the new IPOs will command a valuation that is lower than the 3 metrics I mentioned earlier.

So in conclusion, I think Olam is underappreciated by the market now.  

 

Random inner demons

In just a few weeks, it will be Teacher's Day.

Truth to be told, it is one of the days I dread.

When I see some of my colleagues showered with gifts and I have less. When I see long messages filled with thanks and gratitude but couldn't find mine.

When I see my pupils showing appreciation to others but not me.

I feel pretty lousy and sad

Laugh all u want. This is a random inner demon post, what do u expect. 

Perhaps it is a time of self-reflection. But truth to be told, the self-reflection already started years ago. I do not think I have not tried my best for pupils under my charge, and I believe that I  have cared for them holistically, beyond their grades. 

It is a inner demon and well, one I could live with. Having dread a day but being happy for most of the year is still a good deal.

The PSLE oral examination is finally over. I used to grab hold of pupils along the corridor and do 1 to 1 practice with them. Listen to audio recordings one after another, having zoom sessions to practice with the weaker pupils. 

When I am doing it, I can't wait for it to be over. It is tiring, a 3 minutes recording takes more than 5 minutes to return and track for corrections(another 5 minutes) and u multiple that by 30, it is hours and hours of focused "marking" a few times a week. 

However, it is also during this period I build bonds with the children and our conversation sometimes goes beyond the curriculum and they start to ask questions and share problems. Maybe they feel comfortable and safer in those 1 to 1 session and many a times, I get to know them as a person, understand the challenges they are facing at home.

Children are indeed a marvel. Some of them could be having a difficult time at home, and yet when they laugh and smile, u would think that everything is fine. I am not quite sure I could be as "happy" in their shoes, maybe a trait of child is "forgetful" and it works both way.

Sorry, I digress. 

In my past years, given how much hard work I put in to prepare them for their PSLE, I always appreciate it when my pupils update me how they feel about their exams.

It could be a "yes! I did it", "Cher ! We practice that before!" Or "老师，我很紧张，我觉得我考不好！” it doesn't matter, but I just like to hear from them. 

Usually, quite a handful will give me a update voluntarily and I feel appreciated that I am one of the first thing in their mind when their exam is over. 

This year, none gave me a update.

I guess I have been too pampered in the last few years and I reminded myself it is my job to teach, and their jobs to learn. Professional and transactional. Full stop. 

I wonder if I will post this and will this be a draft? 

Quick Updates on portfolio and follow up actions

Most if not all, Singapore companies under my portfolio has report their results. In general, I expect better results or at least stable results for most companies, except Koufu due to heightened alert phase that prohibit dining in. 

So there are 3 categories of companies. Below expectations, which should be followed by a stop loss limit imposed, and a sell action when price stabilizes. Within Expectations means earnings are stable, or growing as expected. Hold, will suffice. Above expectations, look for opportunities to add when market pull back.

Pretty much most of the companies are in Cat 2

Cat 1   

Diary Farm. 

Multiple disappointments in various fronts. The reasons behind buying is the groceries business will turnaround, and the pandemic will make the business even more resilience or even sticky. When the reopening the starts, the healthcare and beauty segment will then pick up the pace of recovery, and it will be firing at both cylinders.

To be fair, the groceries business turnaround is still intact, and I accept the reasoning that the panic buying create a high base for YOY comparison (Is the same for Sheng Siong). However, Yong Hui swing to loss is not properly explained. It could be something structural about this associate. I mean goods can be flying off the shelves less quickly, but how did you swing to a loss?

I also wonder aloud if HK beauty and Healthcare business is ever going to recover. It is one to the major contributor to bottom line although it is light on the topline. I wonder when will mainland tourists flock to HK again, and even if they did, are they welcomed such that they would want to come back

Numbers wise, they did the nuclear option of cutting the dividends AGAIN, and the double whammy is the cut dividends of 3 cents is still lesser than net profits. 

CSE

Order book is on a downtrend. Topline and bottom line too. Oil price recovery did not lead to more contract wins, although they made some improvements in the infrastructure.

I believe there is a lag time between actual oil price and commitment to CapeX. But with Biden trying giving mix signals on his renewable energy agenda (promising to spend big and go big in renewable, and yet asking OPEC to increase production), the future of "brown" energy is questionable in the longer run. I wonder if the tide will come that will lift a subcontractor like CSE.

Cat 3.

 

Hotung

Hotung already has a record earning year last year, riding on the technology rally wave. So 1H results is already almost equals to 2019 earnings.

Hotung yield is above 10% based on dividends given out last year. It is likely that Hotung will do as well or better (if 2H is as good as 1H).

Even if Hotung sustainable earnings is that 2019 earnings (which is the lowest in the last 5 years), the yield is still above 5%. Hotung investments in Tech and the home ground advantage in Taiwan which is experiencing a tech industry resurgent, puts it in a sweet spot for 2021.

Kayhian 

Similar to Hotung, this company could continue its good performance into 2021 despite the high base. And the reason why it is in Cat 3, is the odds of increased dividends payout. 

HOtung gave most of its earnings back as dividends, 2020 is the year where they gave less than 90%. Kayhian gave 50% of NP.

Given Singapore is a major market for commission income, tracking the SGX announcement on trade velocity and volume is a easy to "project" Kayhian future earnings. 1H turns out well as expected. 

Cat 2 companies are mostly hold companies. which I shall not labor.

I will do a HK review after their earning session is over.     

随心笔：老师的舞台

老师就像个演员、歌手。

他在演艺界，表演给观众看。

舞台上，有些也会犹豫、紧张。

渴望着观众的掌声，

让观众的鼓励给自己动力，

让自己做得更好。

有些演绎小丑，有些是文人，

那些年轻颜值高，多少有些优势吧。

上了舞蹈，就想忘了台下的疲惫。

观众们，舞蹈上的我，也希望你们的支持。

渐渐地，舞台越来越大。

已经不记得自己的观众是谁了。

最喜爱还是天真无邪的笑容。

什么时候，参加了竞赛。

舞台下的观众都是评审。

什么时候，演得自己都不知道在演什么？

什么时候，评审的嘉许或批评也不怎么放在心上。

我就希望有个小舞台，

让我尽情地唱歌。

唱我喜欢的爱的歌，

唱着你的悲伤，我的无奈。

舞蹈上的表演，

越来越不由己。

最可笑的，

都说是为了观众，

却不给我机会和观众拉近距离。

散席了，还在彩排。

不能独奏，说什么合唱、团体表演比较吃香。

我知道，观众的掌声，是肯定。

观众的嫌弃，是改进的机会。

让我在表演中学习，然后认真地彩排。

我是表演者。

我不是策划人。

不要问我舞台怎么设计，

不要问我销售量，

不要、不要。

不要问我哪个市场。

让我尽情地表演。

没人喜欢我的时候，

我会悄悄离开。

不知道哪一天是最后的表演。

每天带着感恩，与疲惫，

表演。

唱你的无助，我的虚伪。

演你的渴望，笑我的疲倦。

Tianneng Power International (0819): A different Tech Giant In the making in China?

First, this is the first time I personally experienced a stock that jumped 15% in a day, barring privatization offer.  

The more well-love subsidiary, TianNeng Battery listed in SSE STAR jumped 20%. Company will likely announce 1H results over the next few days. 

There has been "no news" or updates, since their last quarter results. But they have launch new product series of batteries, C, P and S, classic, premium and Selection. (http://www.cn-tn.com/news/article_1824.html), well attended by industry leaders. Also, either I have missed it earlier, I now saw an global website in English, https://www.tiannengglobal.com/coming-soon.html which I thought is sleek. 

This post is like a pre-results Q and A session, so that I can zoom straight into the results to see if my thesis on the company is correct.

1) How is their lithium batteries production getting along?

2) Beyond their market leader position in light electric vehicles and mobiles, are they able to finally able to also capture a slice of the EV market?

3) Is their high double digit earning growth going to continue? 

4) Power storage solution is a Hugh market, with China, pledging to be carbon neutral in 2060, and continuous investment into renewable energy, the power transmission market will be significant market slice to be captured, that will allow the company to continue to grow.   

(Their batteries have a wide range of product applications)

If answers turn up positive for most of these questions, will the market finally rerate this company with a PE of about 5, as compared to CATL with PE of 184!!

Perhaps they are of different leagues. But the next few days will be interesting. 

 

Random thoughts: A passive investment journey

Looking back, I am already in my "prime" 40s. For the underachievers in their FI journey, like me, looking back in my 20 odd years of working life, could life be different, due to choices we made. U bet? But I had no regrets. 

1) Late 20s Starting work

I married young. When I started work for 2 years, I got.married. I bought resale flat because I didn't want to wait for a unit. I got a car before 30. We gotten a baby just when I turned 30.  

Expenses were high. Savings were low to nothing. about 20 percent of my income went to my parents allowance. 

I got have give the car a miss, wait for BTO, but again, I am glad I provided convenience and comfort to my familiy. Yes, there were some quarrels over money, but those were short, and after we are aware of various concerns, we become more understanding of each other.

Investment is rather useless in terms of absolute sum, but it is still a good learning experience. Those were the years I bought a lot of S chips thinking they are dirt cheap.

30s prime of my career. 

My career was quite smooth sailing. My promotion came reasonably fast. I climb the ladder and my pay increase. As my child grow older, expenses went down. Before they go P1, childcare services is like Uni education.

The shock came when I realised how ill prepared I was dealing with my parents caregiving cost. 

I remember surrendering a policy to raise cash. All went well. But I remembered losing sleep over money, as the cost of respite nurse alone can add up to thousands in a month. 

This is also the age when your peers upgrade to private property or gotten their 2nd property investment. 

On hindsight, borrowing heavily then is the right thing to do, interest is dirt cheap and property price raise more than offset it. I didn't have the balls to do it, and I still don't. I know if one of the direction ( price increase) or ( interest increase ) move against me, I might be in trouble. I also wanted buffer to care for my aged parents then.

There were again some disagreemts during this period of time. 

Recent years.

My wife and I see eye to eye more often. Maybe because she finally experince first hand how good it is to be without burden of property. When she is feeling distressed in work. I said, quit. Rest and find something else to do. 我养你。we are not hard up for money.

Can we have done things differently? U bet. Maybe I can do some freelance to earn more, to pay for that second property ? 

Maybe we can cut down on all those dinning out. I might then be within striking distance of FI in another 10 years perhaps ?

But I bear no I'll feelings. It my choice there and then. At least, I feed my family and is of no burden to others. (Yet?)

The investment journey, however, is really a worthy one to make. Although without size, it is a joke. 

But, I see the world in another perspective from business owners. It is fun, when u go shopping like scuttbutting. Also it is good zen training. How u control fear of missing out and question whether u are fearful or greedy? 

U become cynical, in a good way, and also I know quite a few bloggers that turn out to be good friends. (Although we might not meet up often or at all)

It made u appreciate the impermanence of life, since market goes in cycles and whipsaws and profits and loss change everyday.

It made me, readily accept a good deal, without having to satisfied myself that it is the best deal. (u can't buy at market bottom and sell at top)

So, whatever the outcome, whatever the circumstances, keep moving. 

Random thoughts: FIRE

Financial Independence was a goal or rather dream I had when I was in the 20s.

Today, I just had this silly thought. I am not too sure if I can have a reasonable retirement, and I do hope to work as long as possible. However, I realize the working as long as possible didn't really turn me off. 

After I took a back seat in my career, I do have more time during the school holidays. Even we could not travel, and have quite a long period of time of doing "Nothing". Reading newspaper, researching on companies, exercising etc. 

Things I hope I can spend more time on when I "semi-retired". Yet, truth to be done, it is only enjoyable for the first few days, when I recuperated. Thereafter, I am actually yearning to go back to work, and felt that I am kind of wasting my time. 

It then suddenly dawns on me, how lucky I am, and also how thankful I should be. 

I enjoy my work, and need not retire early to start doing something I enjoy. 

What I do not have is just financial independence. 

This is a wonderful job, a job that lets me connect and also learn to let go. This morning, as I sips my coffee, I reminded myself that I should just do my best, and enjoy my time as much as possible with my pupils. They will leave me in a few months, and I should make full use of my time with them. This desire to make full use of time NOW, is how I always think of my time with my dad. Before he became so weak, and was down with dementia, I tried to spend my time with him, bring him out, and have dinner. It wasn't always wonderful time, but looking back, I have few regrets now, that he passed on.

Every year, I send off the graduating class. I usually bond quite well with a number of them, and funny and clinch it might sound, closer to the end of the year, I do suffer some mild "separation anxiety"

Connecting and then letting go. I considered as Zen Training too. Every year, a few of them becomes more than just pupils to teach, but sweet memories and "friends"

Getting a pay doing all these is just really striking lottery every working day. 

Random thoughts: Favorite Character in Pokemon

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. 

Tip

随心笔： 应该不应该

生活应该幸福？

你想着“应该”,可能幸福就会远一点。

我们在“应该”的背后，要加一个“做”,

把精力放在应该做的事，

不去问应该发生的结果。

没有人应该得到幸福，

能做应该做的事，

就是幸福。

Random thoughts: Still betting on recovery?

 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. 

Conclusion  

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. 

 

Random thoughts: tang ping (躺平)

 

Source: Image from Yahoo news

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

Conclusion:

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. 

  

Random thoughts: I no longer feel happy being kind...

 Hi all,

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. 

Random thoughts: BT article on "5 investment pitfalls"

 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. 

Conclusion

If you have reading until here. Thank you. My mind is slightly clearer, I hope you are not too confused. I welcome your thoughts.

Company Prospecting: China Resources Cement 1313

 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.

By QoQ the pace of expansion (Turnover)/ and profitability has decreased, margin has fallen too. 

It is highly likely the reason why the company is trading at such low valuation, as people are betting 2021 will be worse than 2020, and this is indeed a risk.

Overall:

Given the track records of the company, and the emerging theme of "Going Green" and "Going high Tech", “IOT" of the New Economy, I believe any reduction in infrastructure in a bump on the road rather than any structurally decline. 

Hence it is a risk I would take. 

Company prospecting: Tianneng Power 0819

 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.

Number wise, earning is improving over the last 5 years, FCF is stable over the last 5 years, debt is stable or reducing over the last 3 years. In fact, if you look at the latest Q1 results of TianNeng Battery listed in STAR, which is a subsidiary but form 80-90% of its earning, it is again an impressive Q1 of more than 40% growth. 

Valuation use, PE trailing is 5X, if you expect the earning growth to continue, it will be even lower than this. Dividends is low but decent, 3% with about 20% payout (Hardly punishing.) FCF yield is so-so, in the 7-8% range, but not too shabby, given ROE is 32%. Debt is low, with debt to equity at 0.19. 

Valuation of Tianneng Battery is double or triple of what it is doing in HKEX, which does not make a lot of sense to me. 

So the number part is pretty impressive. 

So the story part? 

It is even more puzzling that TianNeng is flying under the radar. In the years where ESG and EV are all the rage, it is very puzzling than Tian Neng is so grossly neglected by investors. 

Granted its battery is used mainly for light electric vehicle, bicycles etc, which is lead-battery powered, but Tianneng has moved into Lithium-ion Battery business and also in Oct 2020, supplied storage battery for a Power Plant. Both sector has the hottest theme and story of ESG. Granted competition is going to be stiff, but the pie is growing, and its low valuation should provide the buffer. 

The lead battery market is Hugh, and battery need replacement every 0.5 years to 3 years. It is the market leader in these area. 

China is promising to be a carbon peak country at 2030, and neutral at 2060. EVs and renewables are 2 ways which there are moving towards. Tianneng is going to have a bite at both pies, and is not like the core business of lead battery is being disrupted as they pursuit growth. 

They have been growing at 30-40% for that last few years, and for such a grower, you get PE at 5 times?

Yes, it has almost double from its 52 weeks low, this is the only explanation I can find, where traders rotate out of it. However, I find value and is willing to get 3% yield as I wait for capital gain as well as dividend growth. 

It will be a matter of time market rerate this counter if it continues its growth. 

Random thoughts: My son taking PSLE this year

 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