Saturday, January 30, 2016

My Investment Portfolio (January 2016)

STI ended the month at around 2629 points, continuing its downward movement from last month. Again, fears of China's economy hard landing and low oil prices were the major concerns. Investors sold down stocks across the board, making stock picking a difficult task in this market.

For this month, I have attended the following AGMs/EGMs/briefings - Transcorp, Frasers Commercial Trust, Frasers Centrepoint Trust, Envictus, Noble and F&N.

For my top 30 holdings, Jardine C&C moved back to the top of the list after it outperformed this month. A-REIT is another major mover upwards after I subscribed to its preferential offer. Koyo International dropped out of the list after I sold down the stock.

I have bought the following companies from the market this month - Advanced Holdings, Bonvests, CapitaLand, Chuan Hup, GK Goh, GL, Global Testing, Hong Fok, Hong Kong Land, Jardine Matheson, Jardine Strategic, Kencana, Keppel Corp, Khong Guan, Lantrovision, New Toyo, PM Data, SembCorp Industries, S'pore Shipping, Sunningdale, UIC, UOL, Wing Tai and YHI. I have also reduced my stake in Koyo International and closed my positions in OKH Global and Oriental Group.

I have subscribed to the following preferential offer - A-REIT. I have also participated in the following scrip dividend schemes - Boustead and UOB.

I have also accepted the following voluntary delisting/cash offer this month - Li Heng.

Next month will be a busy reporting season as most companies with financial year ending December 2015 will be reporting their full year results. I will (as usual) go through most of these results. With the market appearing oversold, I will continue to buy good quality stocks at a reasonable price. I might also switch out of lower quality stocks to finance some of these purchases.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 29 January 2016)

Top 30 Holdings (Sing$ Denominated shares)
1. Jardine C&C 
2. United Engineers
3. Bonvests
4. Metro Holdings
5. Sarine Technologies
6. Haw Par
7. Singapura Finance
8. A-REIT 
9. Hotel Royal
10. Hotel Grand Central
11. The Hour Glass
12. Hong Fok
13. SGX
14. Keppel T&T
15. Isetan
16. Bukit Sembawang Estates
17. ComfortDelgro
18. Hotel Properties
19. GK Goh  
20. Old Chang Kee
21. Sing Investment & Finance
22. Hong Leong Finance
23. Hiap Hoe
24. UOL  
25. Far East Orchard
26. CapitaMall Trust 
28. Stamford Land
29. CapitaLand
30. First REIT

Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Hong Kong Land 
3. Mandarin Oriental  
4. Dairy Farm
5. Jardine Matheson

Top Holdings (HK$ Denominated shares)
1. Fortune REIT
2. Tan Chong International

Top Holdings (Aust$ Denominated shares)
1. AV Jennings

Top 5 Holdings (CPF OA investment)
1. Keppel Corp
2. Streettracks STI ETF
3. CapitaMall Trust
5. Challenger Technologies

My Hong Kong Stock Portfolio
1. Peace Mark Holdings - Under Voluntary Liquidation

My Australia Stock Portfolio
1. GPS Alliance Holdings Limited

My Unlisted Company Portfolio
1. Automated Touchstone Machines Ltd
2. Iconic Global Limited
3. Greatronic Limited
4. General Magnetics
5. Fastech Synergy
6. Beauty China- Under Liquidation
7. Memory Devices
8. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
9. FM Holdings
10. Japan Land - In liquidation - Members' voluntary winding up
11. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
12. FerroChina - Under Liquidation
13. FirstLink Investments
14. NEL Group
15. Jets Technics
16. Guangzhao Industrial Forest - In liquidation - Compulsory winding up (Insolvency)
17. Hongwei Technologies Limited (In Provisional Liquidation)
18. FDS Networks Group
19. Aussino Group - In liquidation - Creditors' voluntary winding up
20. China Oilfield Technology

My Unit Trust Portfolio:



Blogger JTK said...

Hi GHChua

What is your view on Advanced Holdings and Hiap Seng?
I think both companies are not doing well. In your opinion, which one has better value?

Can you share the rationale behind buying Wing Tai? Why not Chip Eng Seng or Low Keng Huat or Wheel Lock?

It seems like you are positioning into Property Stocks(Bonvests, CapitaLand, Hong Kong Land, UIC, UOL, Wing Tai). Would it be more defensive?


11:02 PM  
Blogger ghchua said...


The fact that both Advanced and Hiap Seng are not doing well presents value for us. Both are in the oil and gas sector which is not in favour now. Among the two, I have decided to add onto Advanced due to the fact that its share price had corrected a lot post share consolidation. At current levels, I do believe that Advanced presents a better value.

I don't think buying property stocks is more defensive. In fact, I have chosen to add more onto the bigger cap stocks like CapitaLand, Hong Kong Land, UOL etc as they are expected to be in the first wave of recovery when it comes. For smaller cap stocks like Chip Eng Seng, Low Keng Huat etc, I still like them but they would not be in the first wave if market recovers. Therefore, I might add onto them at a later stage after the blue chips recover.

For Bonvests, I am confident that they will deliver decent results due to their investment in Cordlife. UIC is a special situation play for an end game which is delisting or privatisation.

5:42 AM  
Blogger JTK said...

Thank you, GHChua, for the explanations.

8:34 PM  
Blogger Sennett Khong said...

Hi GHChua,

What is your take on HongFok? After examining profits from 2013 and 2014, recurring profits are barely positive after subtracting revaluation gains on their properties indicating that the management hasnt been 1) generating sufficient revenue 2) Not keeping operating costs low and paying themselves(management) far too much. Although they own prime properties like international building/concourse, they seem to generate negligible revenue from it which is scary cause i am wondering what has management been up to. There are news that Orchard boulevard MRT will unlock value for international building but 1) it is due for completion only in 2021 2) Hong fok's management might just sit on it and not unlock value for minority shareholders. Additionally, the only project in the pipepline is YOTEL which would be ready only in 2-3years time, as of now, revenue projections look rather bleak for hong fok. Only saving grace is the fact that P/B is 0.4 and very undervalued in terms of book value but I'm not too sure if the fair value method they used are conservative and might be overinflated. What is your take on this?

3:18 AM  
Blogger ghchua said...

Hi Sennett,

Hong Fok had never been a favourite pick among many investors but for me personally, I sometimes do like to go against the crowd.

Yes, you have bought out some good points here but as with many developers, they have faced slow sales of their residential units for the past years. Therefore, the revenue might seem low. As for valuation, the valuers did the valuation and not the company. As for the method the valuers use and things like cap rate etc, you may wish to refer to the annual report for details.

As for International building/Concourse, it is not as if they are sitting on an old piece of asset and not done anything to it. In fact, they have done asset enhancement works on these two properties which justify the higher valuations.

For rental income, normally they are locked in for a few years and one cannot see the effect of asset enhancement works until it is due for renewal. Therefore, one should expect higher rental income down the road but not immediately.

For projects, besides YOTEL, they are also re-developing Magazine Gap Towers in Hong Kong. It is not that they are not going for new projects. The problem is that S'pore property market is down which explains why there is a slowdown in projects and they are looking for opportunities in Hong Kong rather than in S'pore. In fact, the focus should be on selling those completed projects.

In terms of corporate governance, I do note some concerns with the company in the past. Having said that, they have improved in recent years by dishing out dividends and engaging investors more actively. They have also unlocked value last FY by selling their stake in Winfoong.

I guess this stock always trades below book value and it is undervalued for quite sometime. I agree that there is no catalyst to unlock value at this moment, but privatisation might be the end game for it.

8:33 AM  
Blogger phang said...

Hi GHChua,

how you look at this Heatec Jietong ? 50% drop in a day?

8:16 PM  
Blogger ghchua said...

Hi phang,

I think when investing in small caps like Heatec Jietong, we should not only look at its day to day price movements, which I agree can be volatile at times.

Rather, we should focus on its business and whether it is on track for recovery. For Heatec, obviously times are bad for them due to the downturn in the oil & gas sector. But I believe they can recover when oil price recovers. Do take note of the high receivables in their balance sheet, which I think is the main risk for this company.

11:09 PM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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