Friday, January 29, 2021

My Investment Portfolio (January 2021)

STI started the year with a bang, breaking 3000 points. However, as the month draws to a close, it started to pull back as we entered another season of corporate earnings reporting. Also, the emergence of new Covid-19 virus strains around the world cap its gains. It closes barely above 2900 points at the end of the month.

For my top 30 holdings, iFAST maintained its top position after another good run this month due to various upgrades from analysts ahead of its full year result. Isetan was another star performer in the list as the company announced that it is exploring options with regards to its investment property at Wisma Atria. GK Goh was also in the news after it said it is exploring strategic options in relation to its stake in Boardroom. UOL was the main laggard in the list for the month, in line with STI weakness.

I have bought the following companies from the market this month - AF Global, Asia Enterprises, Bund Center, Chuan Hup, First Sponsor, Frasers Property, Heeton, Hong Leong Finance, Hongkong Land, Hotel Royal, Hotung, Isetan, Khong Guan, Koh Brothers, LHT, Lion AsiaPac, Mandarin Oriental, Metro, NSL, OUE, PEC, Shangri-La Asia, SIA, Sin Ghee Huat, Yanlord, Yeo Hiap Seng and Yoma. I have also reduced my position in 2NDCHANCEW230307.

I have accepted the following voluntary delisting/cash offers this month - Hi-P and Sunvic Chemical. I have also participated in the following rights issues - ARA LOGOS Logistics Trust and Lippo Malls Indonesia Retail Trust.

It had been a volatile month for stock markets around the world. As we are now in the earnings reporting season for most companies listed on SGX, I expect more volatility going forward due to reaction to those results. As such, I will continue to position my portfolio defensively. Many companies are expected to announce lower dividend payout and some might just choose to drop it altogether. However, I do expect more M&A actions via voluntary delisting/cash offers as a number of companies are trading at decent levels due to Covid-19 fallouts. Therefore, I do expect my cash flow to remain stable as the dividend shortfall can be compensated by cash proceeds from M&A buyout offers. My strategy is still to continue to re-invest those cash flow back into the markets consistently every month.

Wishing all my Chinese readers out there a happy and safe Chinese New Year.

My S'pore Stock Portfolio - Top Holdings, cash investment only (correct as at 29 January 2021)

Top 30 Holdings (Sing$ Denominated shares)
1. iFAST
2. GK Goh
3. PM Data
4. Hong Leong Finance
6. Hong Fok
7. Isetan
8. Sing Investment & Finance
9. Hotel Properties
10. Hotel Grand Central
11. Haw Par
12. Far East Orchard
13. Bonvests
14. Metro Holdings
15. Singapura Finance
16. CapitaLand Integrated Commercial Trust
17. Stamford Land
18. Frencken
19. Bukit Sembawang Estates
21. SGX
22. EnGro
23. Jardine C&C
24. UOL
25. Hotel Royal
26. Tat Seng
27. Hiap Hoe
28. LHT
29. Venture
30. UIC

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 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 u p (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. Winas - In Liquidation
28. Transcorp



Blogger Jem said...

Hi Ghim Hock,
Wishing you a Happy Chinese New Year! What are your thoughts on Hotel Grand Central, and why didn't you buy more of it this time round?

9:39 PM  
Blogger ghchua said...

Hi Jem,

As with most companies in the hospitality sector, Covid-19 has an impact on their business with lockdowns and restrictions on travelling. Therefore, I do expect a weak set of results for FY20. However, with a stronger Australian dollars lately, it should contribute some currency translation gains. Moreover, with their large portfolio of investment properties, it should limit its revenue downside.

Unlike most companies in the sector, the company is unique as it is well in a net cash position, so they should be able to ride through this pandemic. It is still trading very much below its reported NAV and my investment thesis still remains the same. I expect a privatization attempt by the controlling shareholder in the near future.

As to why I didn't add to my existing holdings, I guess the reason is that I have found more attractive investment opportunities. But Hotel Grand Central was always in my mind as you could see that I have added onto my holdings in the stock a few times during last year if you had read my blog monthly posts in 2020.

10:55 PM  
Blogger Elizabeth said...

Hi Mr Chua,

Regarding 2nd Chance's warrants - Can we convert (buy) the warrants we own - anytime?

HOW do we go about doing it??

thanks much..

4:25 PM  
Blogger ghchua said...

Hi elizabeth,

Nope. 2nd Chance warrants, 2NDCHANCEW230307 is more like a European style warrant. You can only exercise your warrants and convert to shares 30 days before warrant expiry date.

In order to exercise the warrants, you have to call up or visit the warrant agent in order to get the warrant exercise form. Fill it up and attach a cashier's order from a bank and submit it to them. Details of the warrant agent and the circular on the bonus warrants itself can be found in the link below:

6:30 PM  
Blogger Elizabeth said...

Thanks much , Mr Chua.

What is your take on 1st REITs Rights' issue??


GL 's Cash offer??

thanks a lots, elizabeth

9:31 PM  
Blogger Jamesbond007 said...

Hi Mr. Chua, what are your thoughts on Isetan? Thank you.

10:01 PM  
Blogger ghchua said...

Hi elizabeth,

For First Reit, I am not very optimistic on the rights issue. I will take up minimal amount while selling off most of my nil paid rights entitlements. As you might have known, their concentration on Lippo for most of their revenue is still not solved with this restructuring.

As for GL, I will not be accepting the offer at 70cts per share.

10:32 PM  
Blogger ghchua said...

Hi Jamesbond007,

For Isetan, I think most shareholders would have been waiting for them to realize the value of their "strategic asset" at Wisma Atria for quite some time. If realized, RNAV of the company could be more than $10 per share. Of course, there is a possibility that they might do a capital reduction to give out most of the proceeds from the disposal if it happens.

My thought is that the pressure is on for Isetan Singapore to sell Wisma Atria soon. The lease is running out and the asset is not well tenanted at this moment. Also, with department store business not doing well around the world due to Covid-19, the controlling shareholder might decide to realize its value this time round in order to free up some cash for their business in Japan. They have been reluctant to sell the asset despite some approaches and pressure from minority shareholders for the past few years but this time round, they have voluntary said that they are exploring options with regards to Wisma Atria.

Do take note that Isetan accounted for Wisma Atria on their balance sheet at cost less depreciation. Therefore, it is only worth $20m+ in their books but the asset is worth around $290m+ using market value.

10:51 PM  
Blogger Jamesbond007 said...

Hi Mr. Chua, thank you for the insight.

7:46 PM  
Blogger Unknown said...

Hi! Mr Chua, may i know what is your view on fraser property right issue? Thank you.

3:32 PM  
Blogger ghchua said...

Hi Unknown,

The rights issue is priced very tightly as there is only a small discount from the market price. They have stated that they will be using most of the money for development of industrial, logistics and business park assets. I guess it is a defensive move to maintain revenue as hospitality sector will take quite sometime to recover.

Personally, I don't think the discount is attractive from the market price. If you have bought Frasers Property during the recent downturn and do not wish to add more to your portfolio allocation, you might wish to sell off your nil paid rights entitlements when it starts trading. Otherwise, from the adjusted NAV perspective, the discount is still decent enough if you wish to add onto your current allocation in the stock while waiting for their business to recover.

6:31 PM  
Blogger Unknown said...

Hi! Mr Chua, thank you for sharing your insight.

Wishing you a prosperous new year.

12:07 AM  
Blogger Everlearning said...

Hi ghchua,

A blessed Lunar New Year to you!

I have started to revive and slowly getting back into stock investing. Having been so preoccupied into something in the last few years I just simply did nothing about my investments. Of course, I feel bad about leaving investments unattended but I could not be distracted from the prominent issues I have to attend to. "Priority" must be given to what matters most in my heart at any point in my life.

Investment is not my domain in life. Therefore, I am least affected by the outcome of my share holdings remain in my portfolio or gone for good. I can say it in this manner because I am not an astute investor with big amount of money in it.

What I am happy about is to come in here and leave a comment to let you know I am still around. I am glad that you are always truthful in sharing your views and experience the same as I first known you through your blog more than a decade ago.

Keep well and stay safe in this Ox-picious year!

5:38 PM  
Blogger ghchua said...

Hi Everlearning,

As usual, nice to hear from you again.

Indeed, we have limited time per day and we need to prioritize stuff. Great to hear that you are back into stocks again, but I hope that it is not because that markets are back up again after the crash last year in March.

Investing needs a consistent effort to stay the course. Just like planting, you need to tend to it once in a while. You might not need to monitor it daily, but you still need to consistently look at it once in a while. Like you, I am not into investing to make big money and I don't take big risk to make short term gains. My portfolio is structured for long term investing purpose, not short term trading.

Wishing you and your loved ones the best of health in the Year of the Ox.

5:52 PM  
Blogger Everlearning said...

Hi ghchua,

Was there a market crash last year in March? All that I knew and concerned about was COVID-19 news! Now, I am a little hesitant about the vaccination that if I were to be offered, will I immediately go for it. This is a decision I must make alone and face the repercussion if I reject it.

It is not so straightforward that this vaccine can protect me from the virus, but rather, when the whole nation get vaccinated, we believe we can go back to normalcy in the way we once lived before. I have my doubts about it.

Market can crash at any time if the stock holdings are being manipulated by the short sellers or investors who cash out at the expense of the minority shareholders. Long-term investing in good companies is just what I am looking for.

Glad that your very first sentence makes me feel so welcome!

6:30 PM  
Blogger ghchua said...

Hi Everlearning,

Indeed, being able to filter out short term market noises and investing for long term is a decent strategy for most investors out there. Short sellers and traders are only short term noises because in the long term, fundamentals of the company mattered most. It will determine whether the stock will outperform or not, regardless of the Covid situation.

I guess you should just stick with your long term strategy, while keeping a watch on your existing portfolio. You should do OK in the long run.

7:42 PM  
Blogger Everlearning said...

Hi ghchua,

I need your advice regarding Sunningdale Tech that I am still holding. Only recently when I opened a letter that I needed to vote at the meeting, it was too late to respond.

I couldn't recall I ever received an offer for Sunningdale Tech. Due to my neglect all these years since 2015, I somehow do not know what is my next step towards this company that is privatising and delisting from SGX.

Could you give me some guidelines as to what options do I have to respond to such situation?

5:30 PM  
Blogger ghchua said...

Hi Everlearning,

Its a pity that you didn't vote at the scheme meeting. You could have made a difference. The scheme was approved by a small majority of headcount vote. Only 51%+ headcount voted for it.

Since the scheme had been approved, what is left is to get the court's approval and all shares will be acquired. No action is needed on your part. After that, you have an option to choose to receive the proceeds in cash (i.e. $1.65 per share) or private company shares.

8:46 PM  
Blogger Everlearning said...

Hi ghchua,

I am trying to recall how many shares I have. Just checked: only 2100 shares after consolidation (must be very long time ago). Will it make a difference? Very unlikely, right?

At least the Company is paying me back cash to get delisted. There were some companies that just delisted without paying me.

I will be proactive this year hopefully: that is I don't get pull away from it again.

Appreciate your reply.

10:53 PM  
Blogger ghchua said...

Hi Everlearning,

Every shareholder counts in a headcount vote system for scheme meetings. Even if you hold only 1 share or 1 million shares, one shareholder is considered only one headcount.

I guess you need to read the scheme document again and try to read on the different ways that companies can be taken private and delisted from SGX. Yes, the company is paying you back to be delisted, but it is a low ball offer in my view.

12:56 AM  
Blogger Unknown said...

Hi! Mr Chua, may i know what is your view on soilbuild reit offer? Thanks.

4:49 AM  
Blogger Elizabeth said...

Hello Mr Chua,

What happened IF U refused to accept GL's offer at 70cts per share and the company got enough shares to be taken private and is delisted?

ie for those who had not submitted the form for the cash offer...will they still get the 70cts / share?

thank you, Elizabeth

4:22 PM  
Blogger ghchua said...

Hi Unknown,

I don't own any Soilbuild Reit units, so I didn't follow it closely. However, my opinion is that it is a decent offer and you should consider taking up.

Hi Elizabeth,

Well, the IFA had already said that the GL offer is "not fair but reasonable". So, there is no way for GL could delist from SGX without an exit offer that is "fair and reasonable" under the new SGX rule. So, you should not be concern that they can delist by offering 70cts per share.

The only way that they can force a delisting is via compulsory acquisition of the remaining shareholders by hitting 90%. In this case, they will exercise their rights and acquire the remaining shareholders at 70cts per share and delist from SGX. Again, you need not worry in this case as your shares will be acquired automatically and you will be paid.

4:51 PM  
Blogger Elizabeth said...

thanks very much for your generous sharing of your knowledge..am grateful - elizabeth

7:22 PM  
Blogger Unknown said...

Hi! Mr Chua, thank you for the advice.

6:17 PM  

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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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