My Investment Portfolio (August 2020)
STI closes this month at around 2532 points, almost unchanged from last month. Investors are still undecided on the outlook ahead despite US Fed decision to keep interest rate low for a while. Speculative actions had been observed in small cap stocks though, as short term traders were rotating trading ideas among different stocks in a range bound market.
For my top 30 holdings, PM Data proposed a capital reduction exercise to return excess cash back to shareholders. iFAST and EnGro are the main movers in the list this month. iFAST continued its good run after it had received in-principle approval to carry out securities dealing in Malaysia. Tat Seng and LHT also returned to the list after reporting a decent set of half-year results. Frencken though, dropped out of the list after investors sold down the stock due to its less than impressive half-year results.
I have bought the following companies from the market this month - AF Global, Bund Center, Chemical Industries, Chuan Hup, F&N, Far East Orchard, First Sponsor, GK Goh, Heeton, Hiap Hoe, Hong Fok, Hongkong Land, Jardine C&C, Jardine Matheson, Koh Brothers, Mandarin Oriental, OUE, PEC, SBS Transit, Sin Heng, Stamford Land, Tan Chong International, UIC, Wing Tai, Yeo Hiap Seng and YHI. I have also closed my position in Sembcorp Marine R to extract cash to participate in the company's rights issue.
I have accepted the following voluntary delisting/cash offer this month - Tee International (shares and warrants).
I have participated in the following rights issue - Sembcorp Marine. I have also participated in the following scrip dividend schemes - Raffles Medical and DBS.
Next month will be a quiet month as companies had completed reporting their results. As usual, I will continue to selectively add onto my better ideas in my portfolio by re-investing the dividends received back into the market. I will also maintain a cash buffer as most companies continued to announce dividend payment cuts or suspend them altogether.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 August 2020)
For my top 30 holdings, PM Data proposed a capital reduction exercise to return excess cash back to shareholders. iFAST and EnGro are the main movers in the list this month. iFAST continued its good run after it had received in-principle approval to carry out securities dealing in Malaysia. Tat Seng and LHT also returned to the list after reporting a decent set of half-year results. Frencken though, dropped out of the list after investors sold down the stock due to its less than impressive half-year results.
I have bought the following companies from the market this month - AF Global, Bund Center, Chemical Industries, Chuan Hup, F&N, Far East Orchard, First Sponsor, GK Goh, Heeton, Hiap Hoe, Hong Fok, Hongkong Land, Jardine C&C, Jardine Matheson, Koh Brothers, Mandarin Oriental, OUE, PEC, SBS Transit, Sin Heng, Stamford Land, Tan Chong International, UIC, Wing Tai, Yeo Hiap Seng and YHI. I have also closed my position in Sembcorp Marine R to extract cash to participate in the company's rights issue.
I have accepted the following voluntary delisting/cash offer this month - Tee International (shares and warrants).
I have participated in the following rights issue - Sembcorp Marine. I have also participated in the following scrip dividend schemes - Raffles Medical and DBS.
Next month will be a quiet month as companies had completed reporting their results. As usual, I will continue to selectively add onto my better ideas in my portfolio by re-investing the dividends received back into the market. I will also maintain a cash buffer as most companies continued to announce dividend payment cuts or suspend them altogether.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 31 August 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. iFAST
8. GK Goh
9. Far East Orchard
10. Hotel Grand Central
11. Bonvests
12. Haw Par
13. Singapura Finance
14. VICOM
15. Metro Holdings
16. EnGro
17. Hotel Royal
18. Venture
19. Hiap Hoe
20. Stamford Land
21. SGX
22. UOL
23. Yeo Hiap Seng
24. Bukit Sembawang Estates
25. Jardine C&C
26. Tat Seng
27. Isetan
28. UIC
29. LHT
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 4:33 AM
20 Comments:
Hi GHChua
What is your view on Hong Leong Finance? Is it cheap at current price of $2.31 in the low interest rate environment?
I saw you bought UIC. Which one do you prefer between UOL and UIC?
UIC looks cheaper in terms of Price/Book ratio.
Thank you.
Hi JTK,
Hong Leong Finance is trading at around 0.54x NAV. Though the outlook is challenging due to low interest rate environment and possibility of more bad loans, I think the discount is decent enough margin of safety. Assuming that they are paying 60% of the dividend payout from last FY as stipulated by MAS, it works out to around 9cts per share, which translates at around 3.8%pa dividend yield. I think it is a decent enough yield to compensate for the holding period as one waits for recovery.
I do prefer UIC over UOL. Besides cheaper in terms of PB, UIC also has a much lower gearing ratio of less than 5% as compared to UOL.
Thank you, Sifu Chua, for the explanations.
Hi Ghchua,
Based on the current investment climate, do you think that it is easy to achieve a minimum dividend yield of 4% from the investment portfolio involving Singapore stock?
WTK
i received a letter to receive cash payment in singapore dollars instead of US for dividend payment. U think can sign and give back ?
Hi WTK,
I think one should look at overall return, rather than just dividend yield when investing in stocks. But if you just wish to invest in stocks that give a higher dividend yield, then your portfolio should be positioned more towards dividend yielding stocks like REITs and selected Business Trusts.
Hi steven,
Yes. You should sign and send back the form. The reason being, it is better to receive Singapore dollars dividend at company level. Otherwise, if you have participated in CDP DCS, CDP will automatically convert your US dollars dividend into Singapore dollars using their bank and credit the amount directly into your bank account. I have experienced this first hand previously when dealing with Jardine C&C dividend payout. The US$ to Sing exchange rate used by CDP is lower than Jardine C&C themselves.
Hi Ghchua,
Overall returns have been taken into consideration as I do not sell the stocks which I have initiated. I am the buy and hold type. The dividend yield which I mentioned, refers to the overall dividend returns through the investment in various stocks counters which involves REITS and Business Trusts. Some may pay high dividends and some may pay low dividends and I am absolutely wondering whether it is still feasible to achieve a minimum dividend yield of 4% given the ongoing investment climate on an annualised basis.
WTK
Hi WTK,
I think just focusing on an absolute dividend yield of 4%pa is not very meaningful as companies can cut dividend to conserve cash, especially during this current challenging and low interest rate environment. Also, the hunger for yield stocks had also compressed some of those steady dividend yielding ones to less attractive levels.
Personally, for my portfolio, I will be happy if it can yield around 3%pa on average. Of course, there might be instances whereby some stocks had been taken private, pay a one off special dividend, capital reduction etc. These are additional cash flow that I have not taken into account in my estimation.
Hi Ghchua,
I have taken into consideration on the points which you have raised to great extent. There is no doubt that the yield results in respect of the investment portfolio will change as the time progress along the way. In the bad time like this, the yield is likely to decrease as you mentioned that the companies will adopt the reduced dividend to conserve cash. The contrast will happen in the good times. It makes more sense to adopt the spreading approach by investing the appropriate amount into various baskets so that one will not be caught by surprise in terms of the reduced dividend amount.
There are some corporate action such as delisting of stocks etc as mentioned above.You are right to mention that the 3% on average will be happily accepted. I think that this is a prudent approach and I agree that one will have to make the conservative estimation on the yield results in totality. Anything extra will be a bonus.
WTK
what happen to ossia ?
Hi steven,
I am not too sure but apparently, they have issued an announcement and said that they will be paying 90cts dividend per share yesterday. They have halted the shares and issued a correction that the dividend amount is 0.9cts per share instead.
xinghua port can accept HK2.59
Hi steven,
Pan Utd was not in my portfolio when they distributed out those Xinghua Port shares, therefore I am not a shareholder of the company. Having said that, I think it should be ok to accept the offer since the premium being offered is quite attractive.
Hi GH Chua,
Thank you for your monthly blog. Just curious, why don't you subscribe to Keppel DC Reit? Please advise. Thanks!
Faith
Hi faith,
Keppel DC Reit is trading at around 2x book value and yielding less than 3%pa currently. I think valuation is not cheap enough at current levels.
When Keppel DC is too expensive, Ascendas Can Reit be an alternative? please comment on valuation and forward yield like. Thanks. Beside having ppty in SG, Ascendas owns mnay free hold ppty in Australia? Some of these industries ppty are converted to data centre?
Are Hospitality reits like Ascott, FEH really cheap? WIthout no one travel for leisure, how can Ascott survie? How will we get paid if we put our hard earn money in now? Which is possible to be privatised?
Thanks
Shifu Chua
Btw Mapletree Ind and Ascendas Reits in terms yield, valuation?
Thanks
Hi Sunny,
Ascendas Reit is currently my top holding. I think valuation is fair, considering that it is trading at around 4%pa yield and 1.5x book. Besides Singapore and Australia, it is also in other developed markets like US and UK. But they still have an intention to maintain a majority allocation in Singapore. As to your question on conversion to data centres, I don't think just converting any asset into data centre is the way to go for a large cap industrial REIT like Ascendas Reit. You got to have a diversified portfolio like in logistics, science parks etc to offer your tenants, which might have varied requirements.
As for your question on hospitality REITs, yes, they are cheap as compared to REITs in other sectors. Ascott REIT does not only target short stay segment like leisure, they also target medium/long duration stay for business travels. Currently, they are also providing accommodation for those in self-isolation, healthcare workers, workers affected by border shutdown etc. As for income stream, those master leases and management contracts comes with minimum guaranteed income which provides a floor for most of the hospitality REITs. So, it doesn't mean that when those assets occupancy rate is very low, there is no income for the REITs.
Finally, as to your question on Mapletree Ind vs Ascendas Reit, certainly Ascendas Reit is cheaper in terms of yield and price to book.
Hi Ghchua,
I think that it makes sense to initiate some stake into these counters which will generate some form of dividends. I think that this is good for the investors with long term strategy.
WTK
Hi WTK,
We have to be more selective as to which dividend stocks that we wish to initiate. As interest rate is expected to be low in the near future, investors had been buying up high quality REITs backed by strong sponsors. The yield for some of these REITs had been compressed to below 3.5%pa, which I think is not cheap. I think we might need to search deeper for yield plays in the mid to small cap spaces, as alpha could be derived from them rather than just going for bigger cap stocks.
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