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Friday, September 28, 2018

My Investment Portfolio (September 2018)

STI ended 3rd quarter of the year at around 3257 points, a slight increase from last month. It had been another volatile month for investors as US-China trade spat worsens. The month started badly but ended strongly as investors focus back on the economies.

For this month, I have attended the following AGMs/EGMs/briefing - SGX.

For my top 30 holdings, the main mover had been Keppel T&T. The stock did well after controlling shareholder Keppel Corp made a cash offer to buyout minorities of the company via scheme of arrangement. Best World also returned to the list as the selldown after their recent result announcement seems to be over. I will continue to add onto some defensive names in the list selectively as markets continue to be volatile going forward.

I have bought the following companies from the market this month - Bonvests, Chuan Hup, EnGro, Frasers Property, GL, Hong Leong Finance, Hongkong Land, Hotel Properties, Keppel T&T, Low Keng Huat, Shangri-La Asia, SIA Engineering, Sing Investment & Finance, Singapura Finance, UOB Kay Hian and Yeo Hiap Seng. No sell trade was done.

Next month, companies with financial year ending 30 June 2018 will be holding their AGMs. As usual, I will try to attend some of these meetings to get some updates from them. 

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 28 September 2018)

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

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
4. A-REIT
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
27. Europtronic Group

My Unit Trust Portfolio:
http://www.fundsupermart.com/main/community/Portfolio_View.svdo?id=P199

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24 Comments:

Blogger Clement Ong said...

Hi ghchua,

I noticed you are still holding onto your LTC corp shares. What do u think of the Chengs latest effort to voluntarily delist the company?

Ps. I have already tendered my own shares in ltc earlier this year during the GO.

6:28 PM  
Blogger ghchua said...

Hi Clement,

I did not accept the offer for my LTC Corp shares last time round, as I believed that the offer undervalued the company. Indeed, the GO was unsuccessful and the company remain listed.

Unfortunately, the latest move to delist the company meant that it will be an uphill task for minorities to block it as the Chengs can vote in the delisting EGM. Still, I awaits what the IFA has to say before making my next move.

7:17 PM  
Blogger Sunny said...

Shif Chua

Are you going to accept the offer to K
T&T?

Thanks

4:31 AM  
Blogger Royston Tan said...

Hey Chua,

You have quite a long list of stock portfolio. Perhaps maybe good to trim a bit to remove some underperforming ones as STI is flat or getting worse.

Value Investing Singapore

4:55 AM  
Blogger ghchua said...

Hi Sunny,

As Keppel Corp is offering to buyout minorities via scheme of arrangement, it is not a matter of whether to accept the offer or not, but rather voting for or against the scheme. Once the scheme is approved at the scheme meeting, the scheme is effective and all shares held by minorities in Keppel T&T will be acquired by Keppel Corp.

5:36 AM  
Blogger Jamesbond007 said...

Hi Chua,

Note your addition of S'pura Finance. But isn't it the weakest performer out of the 3 listed finance companies for the past few years, including its last reported quaterly result. It fact, its share has tanked below its recent $1 right issue. Appreciate your reasoning for this purchase. Thank you.

8:15 PM  
Blogger ghchua said...

Hi Jamesbond007,

Though S'pura Finance result ranked the weakest among the 3 listed finance companies, it is also trading at a bigger discount from NTA as compared to the other 2. Also, though their half-year numbers for FY2018 is weak, they are still profitable. The main reason for their poor numbers is allowance for impairment losses on loans. Otherwise, their numbers look ok.

I believe that they should still be able to remain profitable for the full-year and maintain their dividend payout.

In the long term though, my thesis for investing in S'pura Finance still remains the same - i.e. I believe that its discount to NTA should narrow and consolidation will take place among those finance companies and it remains a takeover target.
https://www.nextinsight.net/story-archive-mainmenu-60/939-2017/11584-singapura-finance-potential-special-situation

4:47 AM  
Blogger JTK said...

Hi GHChua

I would like to check with you about Wheelock Properties. Are you still holding the shares? If yes, what would you do with the shares?

"The Offeror will despatch a letter to Non-Assenting Shareholders, together with the requisite
Form 58 in due course. Non-Assenting Shareholders may, within three (3) months after the
Form 58 is given, require the Offeror to acquire their shares, subject to and in accordance with
the provisions of Section 215(3) of the Companies Act."

Thank you.

JTK

9:26 PM  
Blogger ghchua said...

Hi JTK,

Yes, I am still holding onto the shares. The offer closes yesterday but only until the very last day that the offeror holds more than 90% of the shares. There is no time for me to react to this latest development before the offer closes. It was touch and go actually.

There are only two choices left for minorities still holding onto listed Wheelock Properties shares:

1. Exercise their right under Section 215(3) of the companies act to require the offeror to acquire their shares at offer price and exit their investment. Alternatively, one can also wait for their delisting offer.

2. Continue to hold onto their shares since the offeror could not compulsory acquire your shares at the close of offer. Hopefully after delisting, there will be a better offer few years down the road to realize its net asset value.

So, the above two choices are quite clear. Either take the offer or continue holding onto delisted Wheelock Properties.

My process with regards to delisting is quite straight forward. When there is an exit option, I will take it and move on to reinvest into other opportunities. Therefore, it very likely that I will take the offer and move on. Will have to wait for Form 58 to arrive first though.

10:06 PM  
Blogger JTK said...

Hi Sifu Chua,

Thank you for the detailed explanation. I will exercise the right to sell at offer price as well.

JTK

6:52 AM  
Blogger Sunny said...

Sifu Chua
Will i ne given form 58 as my shares sre in SRS Acc?
Thks

8:05 AM  
Blogger ghchua said...

Hi Sunny,

Your SRS agent bank should send you a letter, informing you of your rights under Section 215(3) of the companies act. You can choose to exercise your rights to require the offeror to acquire your shares at offer price through your SRS agent bank.

6:38 PM  
Blogger *|RuO|iNg|* said...

Hi,i was searching for mandarin oriental and noted that you are holding this? may i know if you are holding this for long term purpose?

12:34 AM  
Blogger ghchua said...

Hi *|RuO|iNg|*,

Yes. I am holding it for long term purpose.

2:50 AM  
Blogger Sunny said...

Sifu Chua

When u receive form 58, can share here? i worry i will miss the last opportunity.
thanks

6:56 AM  
Blogger ghchua said...

Hi Sunny,

Oh sure. I will make a posting here when I received it.

Anyway, Form 58 is not the last opportunity. There will also be a delisting at a later date and it will come with an exit offer.

8:23 AM  
Blogger *|RuO|iNg|* said...

Hi Sifu chua, thanks for your reply. may i know if you have bought mandarin oriental at low price? i am stuck at $2. and the price is going further down. thinking to keep or just cut it. any advice? appreciate it very much.

8:36 PM  
Blogger ghchua said...

Hi *|RuO|iNg|*,

I have bought Mandarin Oriental at various price levels throughout the years. I am holding it for long term, therefore I am not concerned on short term market movements.

If you are investing for long term, you should ignore short term market movements.

1:20 AM  
Blogger *|RuO|iNg|* said...

Hi Sifu chua, thanks for your reply and advice. The recent news that they are going to close down their excelsior hotel and they refuse to cash out or reward shareholders as the gain of usd2.9 billion is under adjusted net asset value and not cash value. looks like it will just go lower and lower. i hope to hold long but i think it wont go back to $2 again. what do you think?

if you have bought various price levels throughout the years, your average price should be quite low.

2:09 AM  
Blogger ghchua said...

Hi *|RuO|iNg|*,

I don't have a crystal ball to predict future share price movements. Yes, the gain is paper value and not real cash. But one must understand that hotel business is really long term business. Though one might say that they can cash out and realize value immediately, redeveloping it to become a better asset and potentially being able to generate more stable and higher cash flow for the company is also positive in the long run.

Yes, there will be potential short term pressure on the share price for those who bought it in anticipation of the sale. However, I believe that in the long term, it should be able to benefit shareholders.

7:22 AM  
Blogger edragon said...

Hi GH,

Wheelock is the first counter I am experiencing Delisting. What is the pro and cons of holding a DL Company based on your experience so far. Kindly enlighten. Thank you.

5:58 AM  
Blogger ghchua said...

Hi edragon,

I think for delisted public company, the most important factor to consider is whether you trust the controlling shareholder. Because delisted companies are not subjected to listing rules and normally don't disclose their corporate governance practices like listed ones, they are less transparent and it will be difficult for you to follow the progress of the company as there will not be much news updates.

Another disadvantage of holding unlisted companies is that there will not be a market out there if you wish to buy/sell your share. Therefore, you might be stuck with the company for a long time if the controlling shareholder is not buying you out.

Of course, one can argue that the offer price for Wheelock is not good enough and one wishes to hold on and hope for a better offer in future. If it comes, then of course good for those holding it after delisting.

9:48 PM  
Blogger *|RuO|iNg|* said...

Hi Sifu chua, thanks for your reply and advice. i will keep and hold it (Mandarin Oriental) for long term, no point selling it now at a loss. Have you been holding this stock for quite a long time? they are giving dividends quite constant but i am concerned that the dividend amount is getting lower. (from 2017 - 4 cents, 2016 - 4.5 cents, 2015 - 7 cents), in 2018, the dividend was 3 cents. seems like it is getting lower and lower. Any views?

12:36 AM  
Blogger ghchua said...

Hi *|RuO|iNg|*,

There is a rights issue done in recent years. Therefore, with higher number of shares out there, earnings per share had dropped.

Also, renovations done on hotels will meant that some or all parts of the hotel will have to be closed temporary. That will impact earnings as well. For example, they have renovated their London hotel. New hotels also need gestation period and will not be profitable immediately.

However, looking at dividend and earnings alone might not tell you the whole story. Rather, look at their adjusted NAV which will tell you the value of their hotels and assets in the balance sheet. The NAV numbers had been increasing throughout the years, which means management had value-added on those assets.

5:54 AM  

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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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