My Investment Portfolio (July 2020)
STI closes this month at around 2529 points, down slightly from last month. With elections over, the usual worries were present in the markets as in previous months. Additional sell down in local banks towards the end of the month was observed as MAS announces cap on their dividend payout.
For my top 30 holdings, A-REIT returned to the top of the list as industrial REITs performed well this month. New entries include Frencken and iFAST. Frencken did well as the market re-rated the company due to its expected business and earnings growth. iFAST reported a decent set of 2Q20 results, as it progresses to the next application round for a digital wholesale bank licence. Not much changes had been observed for the other stocks in the list.
I have bought the following companies from the market this month - AF Global, Bonvests, ComfortDelgro, EnGro, Far East Orchard, Heeton, Hongkong Land, Hotel Grand Central, Indofood Agri, Isetan, Jardine Matheson, Jardine Strategic, Koh Brothers, Lion AsiaPac, Mandarin Oriental, Metro, OUE, Pacific Century, PEC, Samudera, SingTel, Stamford Land, Tan Chong International and UIC. I have also closed my positions in Guoan International, KOP, New Wave, Progen and Zhongxin Fruit and reduced my stake in BH Global and KS Energy.
I have participated in the following scrip dividend schemes - CapitaLand and Global Investments.
Next month, companies with financial year ending 31 December 2020 will continue to announce their half year results. From the earlier signs of some of those companies announcements this month, I expect most results to be quite ugly. I will continue to remain prudent and selectively add onto high conviction stocks in my portfolio while eliminating those low conviction ones. Going forward, the number of stocks in my portfolio will be reduced as I re-align my portfolio to focus on high conviction stocks.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 30 July 2020)
For my top 30 holdings, A-REIT returned to the top of the list as industrial REITs performed well this month. New entries include Frencken and iFAST. Frencken did well as the market re-rated the company due to its expected business and earnings growth. iFAST reported a decent set of 2Q20 results, as it progresses to the next application round for a digital wholesale bank licence. Not much changes had been observed for the other stocks in the list.
I have bought the following companies from the market this month - AF Global, Bonvests, ComfortDelgro, EnGro, Far East Orchard, Heeton, Hongkong Land, Hotel Grand Central, Indofood Agri, Isetan, Jardine Matheson, Jardine Strategic, Koh Brothers, Lion AsiaPac, Mandarin Oriental, Metro, OUE, Pacific Century, PEC, Samudera, SingTel, Stamford Land, Tan Chong International and UIC. I have also closed my positions in Guoan International, KOP, New Wave, Progen and Zhongxin Fruit and reduced my stake in BH Global and KS Energy.
I have participated in the following scrip dividend schemes - CapitaLand and Global Investments.
Next month, companies with financial year ending 31 December 2020 will continue to announce their half year results. From the earlier signs of some of those companies announcements this month, I expect most results to be quite ugly. I will continue to remain prudent and selectively add onto high conviction stocks in my portfolio while eliminating those low conviction ones. Going forward, the number of stocks in my portfolio will be reduced as I re-align my portfolio to focus on high conviction stocks.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 30 July 2020)
Top 30 Holdings (Sing$ Denominated shares)
1. A-REIT
2. PM Data
3. Hong Leong Finance
4. Hong Fok
5. Hotel Properties
6. Sing Investment & Finance
7. GK Goh
8. Bonvests
9. Far East Orchard
10. Hotel Grand Central
11. Hotel Royal
12. VICOM
13. Singapura Finance
14. Metro Holdings
15. Haw Par
16. Stamford Land
17. Hiap Hoe
18. Jardine C&C
19. Frencken
20. UOL
21. Bukit Sembawang Estates
22. iFAST
23. SGX
24. Venture
25. Yeo Hiap Seng
26. Isetan
27. EnGro
28. UIC
29. Old Chang Kee
30. Amara
Top 5 Holdings (US$ Denominated shares)
1. Jardine Strategic
2. Mandarin Oriental
3. Hongkong Land
4. Jardine Matheson
5. Dairy Farm
Top Holdings (HK$ Denominated shares)
1. Tan Chong International
2. Shangri-La Asia
Top Holdings (Aust$ Denominated shares)
1. AV Jennings
Top 5 Holdings (CPF OA investment)
1. Streettracks STI ETF
2. CapitaLand Mall Trust
3. Keppel Corp
4. A-REIT
5. SBS Transit
My Hong Kong Stock Portfolio
1. Peace Mark Holdings - Under Voluntary Liquidation
2. Alpha Professional Holdings Ltd (formerly known as Z-Obee Holdings Ltd)
My Australia Stock Portfolio
1. GPS Alliance Holdings Limited
My Unlisted Company Portfolio
1. Iconic Global Limited
2. Dongshan Group Ltd (formerly known as Greatronic Limited)
3. General Magnetics
4. Fastech Synergy
5. Beauty China - Under Liquidation
6. Memory Devices
7. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
8. FM Holdings
9. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
10. FerroChina - Under Liquidation
11. FirstLink Investments
12. NEL Group
13. Jets Technics
14. Guangzhao Industrial Forest - In liquidation - Compulsory winding u p (Insolvency)
15. Hongwei Technologies Limited (In Provisional Liquidation)
16. FDS Networks Group
17. Aussino Group - In Liquidation - Creditors' voluntary winding up
18. China Oilfield Technology
19. China Milk Products Group - Under Liquidation
20. Pacific Healthcare
21. Eratat Lifestyle - In Liquidation
22. Fung Choi Media - In Liquidation
23. K1 Ventures - In Liquidation
24. DMX Technologies - In Liquidation
25. Europtronic Group
26. China Sun Bio-chem Technology
27. Attilan Group
28. Winas - In Liquidation
Labels: Portfolio
posted by ghchua at 7:38 AM
16 Comments:
Hi GH Chua,
May I know what is your view on First Reit? Is it good to buy more of it? Thank you!
Faith
Hi Faith,
There are still quite a lot of unresolved issues with respect to their master leases with Lippo Karawaci. I think you can read quite a lot of these issues on many news links out there so I shall not repeat here.
The unit price of First Reit though, has corrected quite a lot (more than 40%) since the start of the year. However, I remain cautious even at current levels as those issues are quite significant and it will affect First Reit DPU going forward. Also, First Reit decision to retain so much of their 2Q 2020 income for 2 month rental relief to all tenants is a big red flag to me.
Hi Ghchua,
The declining dividend and results are expected. I believe that it makes sense to be prudent at this time. Having said this, it will be good to remain invested to take full advantage of the existing condition and invest the available fund into the market where possible.
WTK
Hi WTK,
First Reit problems is really their master lease with Lippo Karawaci. But they decided to give two months rental relief to all tenants (not only to Lippo Karawaci) is puzzling to me. Anyway, their problems is not only the master lease. Their credit profile have decreased and valuation of their investment properties will go down. This will pump up their gearing ratio further. And they have a weighted average debt maturity of only 1.51 years as at 30 Jun 2020. Which means, there is significant re-financing risk for the next two years as most of their debt are expiring.
Also, if you look at Indonesia itself, the economy had been hit very badly by Covid-19. Though healthcare is an defensive sector, people are delaying non-emergency procedures and that will hit the sector further.
Though First Reit might be able to come out from the above issues, the risk is now higher. The market is trying to reprice the units at lower levels to take into account more risk in holding the units. Of course, for brave investors who buy in at these levels, the reward might be higher if they can pull it off.
Hi Ghchua,
It does not harm if one initiates a small stake in the company. There is bound to be some form of risks involved in the investment portfolio. Spreading the eggs into many baskets will allievate such risks to some extent.
WTK
Hi WTK,
Yes. I do agree with you that staying diversified, vested and position sizing is very important in current environment.
However, it is also good to keep some spare cash in hand. Many companies will be cutting their dividends and some might even ask shareholders to fork out more money in the form of rights issues. It is important to have some liquidity in hand in order to meet these cash calls.
Hi Ghchua,
Yes. Keeping some spare cash is a good back-up strategy. One will never know the type of corporate movement in which the company management might adopt. Afterall, one is a minority shareholder which has no say in the company's direction. It pays not to be engrossed in one company's affairs given this is unlikely to be one's concerns if one spreads the eggs amongst many baskets.
It is more prudent for one to have contingency for the back-up plans. It does not render such plans useless if not utilised.
WTK
WTK
Hi GH,
May I know what is your view on SCI and SMM proposed demerger and right issue? What's your strategy if you do hold SMM shares?
Thank you
Hi retnuoc,
My view is that this deal is more favourable for SCI shareholders as they get to own shares in two separate companies after the demerger and the sum of parts might be higher than current SCI. As for SMM, well, shareholders have no choice but to vote for the rights issue as the company urgently needs to recapitalize.
For SMM shareholders, I guess you have to bite the bullet and subscribe for the rights issue. Otherwise, your stake in the company will be massively diluted. Strategy wise, I might use the same one that I have executed in the SIA rights issue. That is, sell some SMM shares and SMM R to extract cash to apply for the rights issue plus some excess rights shares.
Shifu Chua
Saw E16 is suspended, not sure when we can get back cash?
Can have your view on China Everbright water, U9E?
Thanks
Hi Sunny,
For Elec & Eltek, the offer had already turned unconditional. You should have already received the money in your bank account if you have enrolled into CDP DCS payment system.
China Everbright Water is a high debt, contract based and government linked water company based in China. I think its valuation is decent but I normally don't like high gearing companies unless they are supported solid physical assets like properties and freehold land. In China Everbright Water case, they are actually intangible assets like service concession arrangements.
Shifu Chua
I received the money from E16. Thanks 😊
Noticed SMM dropped a lot, it has right issues, can the right convert to shares conversion price and when the last day of conversion? What's the ratio of right issue? Will SMM merge with kepcorp? What wld be impacted to kepcorp share holders? what will sembcorp Ind benefit?
Thanks
Hi Sunny,
For SMM, it is a 5 for 1 rights issue at 20cts per share. Last day to apply for the rights issue should be around 2 September 2020. You should wait for the rights issue offer document to be out for those actual confirmed dates.
For SembCorp Industries, obviously the benefit from this exercise is demerger of SMM from it. It will become a more focused company with lower gearing.
For Keppel Corp, there will be short term weakness in the share price as the partial offer from Temasek lapses.
As for SMM merger with Keppel Corp, I don't think I wish to comment on market speculations. It had been there for a while, and while I would not rule that out in future, I think the current priority for Temasek is to get SMM back to profitability in the near future and recapitalize the company via the rights issue.
Shifu Chua
M04 has quietly come up, any news of about general offer by JSH? Within the Jardine family, any corp action on going by market rumors?
Any way, which company of the Jardine family do you think it is worthwhile to collect and Y?
QAF,Jafa and Koufu, which stands for better value and next to have corporate action that would unlock the value?
Heard of dormitory is released from lock up of Covid, will it help Centurion?
Thanks
Hi Sunny,
I do not wish to comment on market rumours and therefore would just leave it. I think it is better to invest based on fundamental valuation rather than punting on corporate actions. The failed Keppel Corp partial offer by Temasek is a lesson for us not to buy on market news.
As to which member of the Jardine group is worth buying currently, I think almost all of them are trading at decent valuation. You have JMH and JSH trading at discount from book value, Hong Kong Land, Mandarin Oriental etc. It really depends on which segment of the business you are interested in or you prefer the holding companies.
I don't own Japfa and Koufu, so I can't comment on these two companies as I am not familar with them. As for QAF, yes, there is market rumours that they are attempting to IPO Riverlea again but there is a concern on what valuation they can get or whether they will delay it again. Again, I have no clue whether they can successfully IPO it this time round.
As for Centurion, going forward, even if there is no lockdown, my concern is that costs will be going up for them going forward as they have to adhere to safe distancing measures in the existing dormitories. Also, for new built dormitories, they got to have safety measures built in as well. Therefore, profit margin will be squeezed and plus their high gearing ratio, I am negative on them going forward. Also, their overseas student accommodation business had also been disrupted due to Covid-19.
Hi GH Chua,
I am currently researching on Investor Relations for a school project and would like to ask if you would be available to connect for a short interview anytime soon as my team and I would love to hear more about your views on financial blogging in Singapore and the various investor relation engagement practices.
We believe your views would greatly value add to our understanding on the topic since you are a seasoned investor and financial blogger. Rest assure that your opinions would not be used for any commercial purposes.
Please let me know if you would be willing to connect.
Best,
Adeline
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