My Investment Portfolio (February 2022)
STI ended Feburary down a bit at 3242 points. Markets were initially stable and STI was moving up during the early part of the month. However, news from Russia invasion of Ukraine spooked the markets and high volatility was experienced. STI eventually lost some ground towards the end of the month. In Singapore, re-opening plans had been further delayed due to the surge in Omicron Covid-19 cases.
For my top 30 holdings this month, Samudera Shipping entered the list for the first time after reporting a decent set of full-year result, with a surprise special dividend being declared. Stamford Land also moved up a few places after I subscribed to their recent rights issue. Hiap Hoe was also in the news after making some progress in their attempt to sell Orchard Towers units via collective sale. The 3 finance companies in the list all reported increasing net interest margin and also dividend payouts.
I have bought the following companies from the market this month - Amara, AP Oil, Bonvests, Bund Center, ComfortDelgro, Cosmosteel, Dairy Farm, F&N, Frasers Property, GK Goh, Global Testing, Goodland, GuocoLand, Heeton, HL Global, Hong Fok, Hong Leong Asia, Hotel Grand Central, Hotel Royal, Indofood Agri, Kingsmen, Koh Brothers, LHT, Lion AsiaPac, Metro, Nam Lee, SATS, SBS Transit, Shopper360, Singapore Land Group, TIH, TTJ, UOL, Wing Tai and Yeo Hiap Seng. I have also reduced my stake in FSL Trust.
I have participated in the following preferential offer/rights issue - Stamford Land. I have also participated in the following scrip dividend schemes - Mapletree Industrial Trust, Sabana Reit and Starhill Global Reit.
For the upcoming month, I will still be going through some of those full-year result that I have missed out in February. With market volatility expected to increase due to the evolving situation in Ukraine, I will continue to remain conservative in managing my portfolio going forward.
My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 28 February 2022)
Top 30 Holdings (Sing$ Denominated shares)1. iFAST
2. Hongkong Land
3. Jardine Matheson
4. 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 Integrated Commercial Trust
4. Keppel Corp
5. Challenger
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. Memory Devices
6. Jurong Tech - In liquidation - Compulsory winding up (Insolvency)
7. FM Holdings
8. Zhonghui - In liquidation - Compulsory winding up (Insolvency)
9. FerroChina - Under Liquidation
10. FirstLink Investments
11. NEL Group
12. Jets Technics
13. Guangzhao Industrial Forest - In liquidation - Compulsory winding up (Insolvency)
14. Hongwei Technologies Limited (In Provisional Liquidation)
15. FDS Networks Group
16. Aussino Group - In Liquidation - Creditors' voluntary winding up
17. China Oilfield Technology
18. China Milk Products Group - Under Liquidation
19. Pacific Healthcare
20. Eratat Lifestyle - In Liquidation
21. Fung Choi Media - In Liquidation
22. K1 Ventures - In Liquidation
23. DMX Technologies - In Liquidation
24. Europtronic Group
25. China Sun Bio-chem Technology
26. Attilan Group
27. Transcorp
Labels: Portfolio
posted by ghchua at 8:26 PM
9 Comments:
I notice that you have some finance companies in your top 10 list. May I know your thoughts on finance companies in current market environment.
1) What are the merits for investing in finance companies versus banks considering that they tend to have a smaller deposit base and high net worth clients (for selling wealth management products) and may have higher exposure to the property sector (vulnerable to cooling measures)?
2) What are the challenges for finance companies from fintech (ADDX, crowd funding etc.) and the main risks involved in investing in finance companies?
3) How lucrative are Singapore finance companies for foreign financial institutions to acquire them? Does Singapore finance companies trade at a sufficient discount to their foreign counterparts?
Hi weii,
1. Finance companies don't really do wealth management products. They are mainly true blue collecting deposits and lending out money, thereby earning interest margin. Of course, they also do stuff like share financing, factoring etc, but these are also financing activities. I don't see having a smaller deposit base being a disadvantage here, since they have a niche as compared to banks. They are only in Singapore market, whereas the banks are in many countries. I don't see having exposure to local property market is higher risk than the banks (which are exposed to Oil and Gas sector). If you track back their impairments and write backs throughout the years, you can see that they are conservatively managed.
2. I don't see fintech replacing finance companies completely. Ultimately, relationship matters in this business. The main risk of finance companies is the same as any normal lending business. Interest rate movements, defaults etc.
3. I am not too sure about this. Singapore is a small market and foreign companies might not be interested in it. Looking at valuation though, I did not compare with foreign counterparts. But Singapore finance companies normally trades at around 0.5x to 0.6x book value, which is a decent discount for me. They also yield around 4%pa during normal times, which is also a decent dividend yield for me.
Hi Mr. Chua,
On the same concern, what is your thought of the digital banks' impact on the financial companies, particularly, their loans to SME, etc., given that the pie would soon be smaller. The finance companies's scope of business is rather restricted and limited compared to the banks.
Thank you.
Hi Jamesbond007,
I guess competition is everywhere, and it remains to be seen what impact digital banks can have on finance companies. Relationships with good customers and experience in granting loans are not build overnight. We have also seen online DIY insurance portals coming up but insurance companies are still around and making consistent profits year after year. The weaker ones will be taken out, while the stronger ones will survive.
The market had already factored in little or no growth in finance companies, which explain why they have been trading below book value, despite being profitable year after year. The margin of safety is already there and unless digital banks can massively disrupt their current business offerings, I don't see any major impact on their valuation. In fact, some of their NAV are backed by physical assets like Sing Investment building and Singapura Finance shop house branches, which are conservatively valued in their balance sheet.
Hi Mr Chua,
May I know what is your take on Sg O&G's offer price of $0.295?
Thanking U in advance,
Elizabeth
Hi Elizabeth,
I think it is a low ball offer, but very likely it will go through. With the recovery from Covid and introduction of vaccinated travel lanes, there will be more patients coming to Singapore from overseas and will benefit Sg O&G.
Thanks Mr Chua, can a share-holder just ignore the "offer" , ie don't do anything...- since I bought at a higher price...IF it went thr - we still can get back the money at $0.295/ share,right?
Hi Elizabeth,
Yeap. If you decide not to accept the offer, then you do not need to do anything. However, if they reached 90% acceptance level, they will compulsory acquire all the remaining shares out there and pay you off at $0.295/share.
thanks very much,
warm regards, Elizabeth
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