Monday, April 30, 2018

My Investment Portfolio (April 2018)

STI ended April 2018 at 3613 points, up from last month despite another volatile month. Banks had been the star performers this month that supported the index, while manufacturing stocks had been laggards.

For this month, I have attended the following AGMs/EGMs/briefing - Chew's Group, UOI, Ascott Residence Trust, CapitaLand Mall Trust, Hotung, CapitaLand Commercial Trust, Sembcorp Industries, IFS Capital, Sinarmas Land, Riverstone, Amara, CapitaLand Retail China Trust, Ho Bee Land, Hong Leong Finance, Hiap Hoe, Hotel Grand Central and Vard.

For my top 30 holdings, Haw Par is the new top holding in the list after it performed well for the past few months. DBS is another top performer after it released its 1Q2018 result that beat expectations. Venture, however, is the biggest loser in the list for the month after news that one of its customer's product is not doing well.

I have bought the following companies from the market this month - Asia Enterprises, Bund Center, F&N, Far East Orchard, IPC Corp, Jardine Strategic, Keppel T&T, Koh Brothers, SingTel, Singapura Finance, Wheelock and Yeo Hiap Seng. I have also closed my position in Lee Metal.

I also participated in the following preferential offer/rights issues this month - First Sponsor, MTQ and Raffles Education.

Next month will be another quiet one for me as the peak AGM season is over for this year. Having said that, there is still some catch-up readings to be done in terms of annual reports and periodicals. I will also be working on re-investing those dividends to be collected for companies with financial year ending 31 December 2017 who held their AGM in April prudently back into the market.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 30 April 2018)

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

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

Top Holdings (HK$ Denominated shares)
1. Shangri-La Asia
2. Tan Chong International
3. Fortune REIT

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
2. Z-Obee Holdings Ltd

My Australia Stock Portfolio
1. GPS Alliance Holdings Limited

My Unlisted Company Portfolio
1. Automated Touchstone Machines Ltd
2. Iconic Global Limited
3. Dongshan Group Ltd (formerly known as 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. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
11. FerroChina - Under Liquidation
12. FirstLink Investments
13. NEL Group
14. Jets Technics
15. Guangzhao Industrial Forest - In liquidation - Compulsory winding up (Insolvency)
16. Hongwei Technologies Limited (In Provisional Liquidation)
17. FDS Networks Group
18. Aussino Group - In Liquidation - Creditors' voluntary winding up
19. China Oilfield Technology
20. China Milk Products Group - Under Liquidation
21. Pacific Healthcare
22. Eratat Lifestyle - In Liquidation
23. Fung Choi Media - In Liquidation
24. K1 Ventures - In Liquidation
25. Jaya Holdings - In Liquidation
26. DMX Technologies - In Liquidation

My Unit Trust Portfolio:



Blogger retnuoc said...

Hi GH,

Tan family is buying back share everyday. Do you think the privatization is on the card for hotel grand?

Best Regards,
Han Sian

11:05 PM  
Blogger ghchua said...

Hi retnuoc,

It is a difficult question for me as I could not second guess the motive of a substantial shareholder of a company. But if you ask me honestly, my answer is not so soon. They still have plans to sell some of their hotels to unlock value for shareholders. When companies want to privatize, they tends to keep everything within the company and not to do anything to unlock shareholder value.

There are other stocks in my top 30 list that I think will have better chances to bet on privatization, which I shall not comment.

12:06 AM  
Blogger Chong said...

Hi ghchua,

Just to check if you are a current shareholder of Sarine Technologies.


5:06 AM  
Blogger ghchua said...

Hi Chong,

Oh yes, I am still a shareholder of Sarine Technologies.

5:42 AM  
Blogger Chong said...

Hi ghchua,

It seems that this year Sarine is doing something different from the previous year. Shareholders are supposed to fill up a form that will be sent to us to declare that we are non-citizens of Israel in order to claim back the 20% withholding tax that was deducted at source. I saw the form Annex A which is downloadable from sgx website and it states in "Part C: Documentation", "With regard to an individual", it seems that item 2 and 3 are talking about the same thing. That is a bank statement details which your dividend is credited to. So in short, does that mean we just have to submit a photocopy of our ID and a bank statement which has our name and bank account number will do?



6:09 AM  
Blogger ghchua said...

Hi Chong,

Yes. It was the same also during the last dividend payout. I didn't bother to claim back the withholding tax as it was not a big amount.

7:45 AM  
Blogger K said...

Hi ghchua,

Do you mind sharing what some of your thoughts on Far East Orchard?


8:54 PM  
Blogger ghchua said...

Hi K,

I guess Far East Orchard is more for patient investors who see the value of the company, rather than those looking for high growth. As you might be aware, the company holds a portfolio of assets, mostly in the hospitality segment. They also have management contracts with outside parties like Toga. For properties segment, they had been quite low profile in terms of development activities in Singapore lately, preferring to concentrate their developement efforts in overseas countries like Australia and UK.

I do like the company due to its decent discount to NAV, low gearing and ability to scale up via asset light strategies like management contracts. However, do take note their ROE is low and will remain low for the near future, due mainly to quite a number of low yielding assets in their portfolio.

11:27 PM  
Blogger retnuoc said...

Hi GH,

Bukit Sembawang just acquired 2 en bloc sites for development purpose. Do you think this would impact their ability to maintain 33c dividend for the next few years?


10:01 PM  
Blogger ghchua said...

Hi retnuoc,

I was actually pondering their decision to acquire two en bloc sites, since they still have a decent amount of land bank in their balance sheet at very low cost. I guess most possibly I have to attend their AGM to find out more on their intentions and why they are building up their land bank.

I think dividend payout for pure property development plays like Bukit Sembawang is expected to be lumpy. I don't think previous dividend payout amount should be taken as indicative payout going forward. As you might have known, Bukit Sembawang do not have an investment properties portfolio and therefore dividend payout would be dependent on their property development sales. They do have a decent cash amount in their balance sheet and no debt so they do have the flexibility to adjust their payout ratio. Having said that, if you look at their Q32018 result, I don't think they will be able to match their earnings as compared to last year. Therefore, I expect dividend payout to be cut this year as compared to last year, unless they adjust their payout ratio higher.

Going forward, I still like the company due to its decent land bank at low cost and nice balance sheet with zero borrowing.

10:30 PM  
Blogger Sunny said...

Shifu Chua

Oil price is rather stable, but Semb Corp price stacks at bottom, is it due to earning recovery no hope or what? Did not see you buy this company, can share with us something?

Trade war is about to be over, any company could benefit? no more NOL, pity.


3:53 PM  
Blogger ghchua said...

Hi Sunny,

I have bought Sembcorp Industries on and off for the past one year, the latest being in March 2018. Please refer to my previous blog posts for more details.

I think Sembcorp Industries is not only facing challenges in their offshore marine business. Their utilities business is also having headwinds as well. I do think that the company looks cheap at this moment, but we still have to wait for quite sometime for earnings recovery in order for the market to re-rate the stock.

I do not have any view on companies benefiting on trade war ending. Ultimately, I think we should look at each company individually and invest based on its merits.

10:48 PM  
Blogger Sunny said...

Shifu Chua

Great Eastern comes up nicely in last 2 yr but it still far behind comparing with AIA. Not sure GE's intrinsic value and at what price shall I let go? Wish to have some insight regarding to company future development, eg, delist, selling away Malaysia biz...why AIA goes up so high and fast and why not GE?


5:38 AM  
Blogger ghchua said...

Hi Sunny,

I think it is difficult to assign a fair value for an insurance business as it depends on premiums coming in for new insurance business as well as embedded value for older ones. Also, the margin they made from underwriting. For life insurance business like GE, they also have investment returns from participating policies which shareholders will get a small cut from it.

I would actually prefer to hold life insurance companies like GE for very long term, due to the above reasons. Yes, they might experience ups and downs but ultimately, insurance business is a risk management business and they do generate decent returns for shareholders over the long term. They are better in managing risk than other listed companies out there so it is a no brainer to buy and hold.

I don't think OCBC will take GE private at this moment so delisting might not be on the cards. They have previous failed attempts and I think they might be cautious to do it again unless there is a strong reason for doing so. As for their Malaysia biz, I think it is a foregone conclusion that they have to sell. It is only a matter of what price they can get. They will still retain a decent stake as Malaysia is an important part of their overall business.

I am not sure about AIA as I don't follow overseas listed companies closely. But one simple reason I can give for its outperformance over GE is maybe because they are bigger and have a larger footprint in terms of agency force and also geographically in more countries.

8:44 AM  
Blogger David said...

Hi ghchua,
What is going to happen to Hyflux? It seems to be in trouble but is this company backed by govt? I hope it doesn't go into liquidation if it did not manage to solve its debt.

3:17 AM  
Blogger ghchua said...

Hi David,

As you might have known, I have divested Hyflux and no longer a shareholder of the company. So, I will only be commenting from my observations

I think debt is a big issue for Hyflux which is why they have proposed to do a reorganization to see how they can keep the business moving while looking at ways to reduce their debt load. One way of course is to sell assets to pay down debt, but they had been unable to do so as some of their assets are having headwinds in terms of performance or not operational yet.

I think whether it goes into liquidation or not depends very much on their secured borrowers and whether they want to keep Hyflux alive. One way of course is to "do a Ezion" to restructure those debts and exchange some loans into shares. But the resulting effect is more dilution to shareholders. I think the problem with Hyflux is not only debt but they also have shares that ranked higher than ordinary shareholders like preferential shares and perpetual securities etc to deal with.

Right now, it is just a waiting game to see what plans they have.

8:28 PM  
Blogger Sunny said...

Shifu Chua

i believe you took the script dividend of TuanSing. What's their NAV and prospective? Can share your view abt ppty market in SG ? thank u

4:08 AM  
Blogger ghchua said...

Hi Sunny,

Yes. I have taken up the scrip dividend for Tuan Sing. NAV for the stock is around 83cts. RNAV should be well above $1.

Two main developments which I think will unlock value for Tuan Sing in the next few years. One is the redevelopment of 18 Robinson office tower, which is target to be completed by end of this year. Another is AEI of their site in Perth. Both are expected to further contribute to an increase in NAV and recurring income to the group.

Another wild card is disposal of their non-core assets like Gul Tech and Hypak.

However, do take note that Tuan Sing has a high gearing ratio. This plus their low dividend yield meant that it might be trading at depressed valuation for quite sometime as investors wait for developments.

Property market in Singapore currently is not very bullish. I think we could see only moderate increase in price and volume transacted. A lot of the cooling measures are still in place by the government and I don't think they will remove them soon.

10:44 PM  
Blogger Sunny said...

Shifu Chua

ManuLife issues rights, do i hv to pay for that? Whats the prospect of the company?

Comfort recently ver strong, is the bottom line starts changing?


10:29 PM  
Blogger Unknown said...

hi ghchua

Do you plan to sell your ausnet services shares? or move to ASX?

8:07 AM  
Blogger ghchua said...

Hi Sunny,

Unfortunately, I don't hold ManuLife US Reit so I am not familar with the Reit. But for rights issue, of course you have to pay in order to subscribe for the shares.

For ComfortDelgro, I don't think there will be a significant change in bottom line in the short term. However, things certainly looks better now with Uber exiting the Singapore market and more cabbies had been taking up their taxis.

Hi Unknown,

Unfortunately, AusNet Services had decided to delist from SGX. I don't think I will be holding onto it as there is no lack of yield alternative stocks listed on SGX.

1:26 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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