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Thursday, July 30, 2020

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)

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 up (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

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9 Comments:

Blogger faith said...

Hi GH Chua,

May I know what is your view on First Reit? Is it good to buy more of it? Thank you!


Faith

6:55 PM  
Blogger ghchua said...

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.

7:18 PM  
Blogger WTK said...

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

10:06 AM  
Blogger ghchua said...

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.

6:57 PM  
Blogger WTK said...

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

8:36 AM  
Blogger ghchua said...

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.

8:17 PM  
Blogger WTK said...

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

10:44 PM  
Blogger retnuoc said...

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

2:01 AM  
Blogger ghchua said...

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.

4:29 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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