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Blog Archive

Saturday 31 March 2012

CPF - Closing Status 30 Mar


Purchased Cache Logistics Trust 2 lots this week.  This Reit stock is already off its recent high of $1.05 and it is already at 5% discount on Friday's closing price at $1.00.  I am keeping Cache under my CPF portfolio for its dividend.

In my CPF portfolio, l have invested 70% in blue chips which are STI index stocks so, is this a wise decision?  Not necessarily so.  Blue chips are expensive and not much different versus any other normal stocks as they too are as vulnerable to stock market swing.   These blue chips under my CPF portfolio are already at 80% of total paper loss!




Portfolio walk since previous posting :-

-$9,888 Total Returns as of 9 Mar 

+$0 No movement on Realised positions

+$1,302 Unrealised positions improved

-$8,586 Total Returns as of 30 Mar


previous journal :- CPF - Closing Status 9 Mar

Sunday 25 March 2012

Right Reit l Like - 23 Mar

All Reit companies have recently already gone ex-dividend and some investors would be reviewing their stocks portfolio either to add, reduce or hold on to their Reit stocks. Below is a quick compilation for comparison review. 

If assuming that an investor has a limited funds of $10k, a decision can be made based on % ROC or dividend amount expected and also by using previous year's payout rate.  Previous year's payout rate is definitely not so accurate but it can be used for quick guidance on which companies can be expected to generate highest dividend yield for their next quarter's results.




previous posting :-    Right Reit l Like - 2 Mar

Succession plan in a family run business


This can as simple as incorporating a succession plan as an official company policy and do a yearly pledge of it in the annual report.  Remarkable examplary succession plan by Qian Hu as below :-

 
During Qian Hu's recent AGM on 15 March 2012, shareholder, Manohar P Sabnani (“Mr Mano”) suggesting that Chairman (Kenny Yap) should move from beyond the family members to search for a capable CEO to run the business should the performance of the Group remained stagnant or deteriorate going forward. He felt that if Chairman only relied on his family’s talent pool, there might be constraints on the growth of the Group.  Chairman reiterated that as mentioned on page 50 of the Annual Report on Qian Hu’s succession planning as well as in dialogue sessions with various media and professionals, he had always been advocating that the best person should run Qian Hu and that family members would not be given any special preferences.


From Qian Hu's 2011 Annual Report :- 

"QIAN HU’S SUCCESSION PLANNING

Succession planning is an essential process for maintaining growth momentum and business continuity, no matter how certain the future holds. We recognise that no one is indispensable, but the absence or loss of key management can be detrimental, resulting in a loss of shareholder confidence. Modelling the succession planning policies in some of the larger organisations, Qian Hu has put in place a structured succession planning programme as early as 2004. This is because we recognise that it would take some 10 to 15 years for the next generation to garner suffi cient experience to take over the leadership of the Group. 

We are not looking for a single talent, but rather a cohesive team that will take Qian Hu to the next lap of growth. We have identified a team who has the potential to be Qian Hu’s future leaders, and out of this group, one will be chosen to be the next CEO. This decision will be based on assessments from the Board’s nominating committee; peer appraisals, individual track record and performance. Performance recognition at Qian Hu has always been, and will continue to be, based on merit. It is our company policy that family members will not be given any special preferences. 

The person whom we are grooming to be Qian Hu’s future CEO must embrace our corporate culture and values wholeheartedly. The new CEO must be able to put the interest of the company before personal interest, be able to handle stress, and yet be hungry and ambitious.  This is necessary because the Group must not rest on its laurels but continue to progress and evolve. With the current senior management as their mentors, all of our management trainees are rotated to handle different portfolios. Those who are capable must be able to take on overseas assignments and be able to reliably perform in challenging environments."



From Qian Hu's "Chat With Kenny" web page dated 25 July 2011 :-

"Dear Jeremy Scott, you wrote:
You mentioned during your result briefing that Qian Hu is expected to have a new CEO by 2020.
Can you briefly elaborate on your succession plans leading to 2020 and why 2020?

Hi Jeremy,
When I reached the age of 40 years old in 2005, we started Qian Hu's succession planning process by recruiting management trainees, aged 25 to 35 years old. We planned to train and develop them for the next 15 years hence the 2020 timeline for a revitalised management team for Qian Hu. In 2020, I would be 55 years old and a new CEO from the succession team should take over in his or her mid-forties. I intend to stay on as Executive or Non-Executive Chairman for another 5 years. By the age of 60, I will exit the management team of Qian Hu but will be offering myself as an FOC (free-of-charge) advisor to the company whenever they need me.

I plan to exit the company at a relatively "young" age of 60 by corporate standards. I could stay on longer but I feel I should give the next generation of management complete freedom and authority to bring Qian Hu to greater heights. I should only be there to provide guidance and advice when needed without interfering with the way they run the business.

Kenny the Fish"

Friday 23 March 2012

Cash - Closing Status 23 Mar

The fat finger syndrome got on to me for my trade done this week.  I already have 20 lots on Advanced Holdings and have accidentally entered my originally intended sales this week in error as purchase!  So, my investment in Advanced Holdings got doubled to 40 lots, by accident.  So, l have queued to sell the entire 40 lots also in this week but only managed to divest 33 lots.  

Portfolio walk since previous posting :-

$1,501 Total Returns as of 16 Mar 

+$9 Gain on sales of Advanced Holdings

+$63 Unrealised positions improved

$1,572 Total Returns as of 23 Mar

previous posting :- Cash - Closing Status 16 Mar

Sunday 18 March 2012

CDW, not for the faint hearted


It was almost a year ago when CDW was involved in unauthorised bank transfers and as Deloitte was not able to obtain sufficient appropriate audit evidence to clear their doubts so, Qualified opinion was issued on its cashflow.  However, Deloitte gave Unqualified opinion on CDW's statements of financial position and statements of changes in equity, the consolidated income statement and the consolidated statement of comprehensive income. 

Also in 2011, there was a slight uproar an one-off increase on combined fees for CDW independent directors was raised from S$220,000 to S$400,000.  It was explained that the increase in Director’s Fees is not a reward, but due compensation for the considerable time and effort spent by the independent directors in attending additional meetings to resolve issues arising from the unauthorised fund transfers episode.

Fast forward into 2012, CDW made announcement on 28 Feb on changes to the board of directors / key appointments.  It is part of the succession plans at CDW.   

In its full year results announcement made on 28 Feb, CDW recorded 42.1% increase in revenue, primarily from its LCD Backlight Units business segment.  But  in January and February 2012, CDW experienced lower sales due to production delays for certain large order due to a "technical" problem at customer's end.  Though the technical problem is resolved, its first quarter results will be materially impacted. CDW promised to issue profit warning for the first quarter’s result if it is deemed necessary.

Gross profit grew 25.8% but there was slight drop in gross profit margin by 2.6 percentage points to 20.1%.  Over the years, CDW gross profit margin has been in the 20% range.   Selling and distribution expenses increased in line with an increase in sales.  Administration expenses increased due to costlier operating costs in the PRC and the appreciation of the Chinese renminbi and Japanese yen as compared to the United Stated dollars, and partly due to the increase in headcount and salary-related expenses in the PRC and Hong Kong operation which was in line with the increase in sales.  Finance costs remained at a low level due to CDW low gearing policy and the low interest rate environment.   CDW also maintained bank loans at a low level and in fact has unutilized banking facilities which could be deployed for expansion where necessary.  CDW spent on capex to acquire new machinery to replace old ones in order to improve overall efficiency in the production of LCD Parts and Accessories and Office Automation equipment.  All in, CDW net profit increased by 37.2%.

Net Cash position in 2011 US$45.5 million (2010 : US$37.7 million).  Higher inventories due to increasing sales of LCD backlight units and the postponement of mass production of certain parts in LCD Parts and Accessories segment. Debtor turnover days improved to 43 days as a result of increasing sales to customers with shorter credit term but in general, there is no material change in the credit term to customers.  
One big risk, revenue from one key customer which has transactions with all segments accounted for 77% (FY2010: 70%). As mentioned in the above, this has already caused its January and February sales to be affected.

In order to secure borrowing at low interest rate, CDW arranged a fixed interest three-year term loan in 2011. The bank loans reduced to US$13.9 million.  The trade payables increased to US$27.6 million, which was consistent with the rise in the revenue; there was no change in the suppliers credit terms.  Other payables and accruals, comprising accruals for expenses and wage payables, were increased by US$0.7
million to reflect the rising labour costs in the PRC.

EPS of USD 0.94 cents at 31 Dec 2011 (2010 : USD 0.68 cents).

CDW last done price on 16 Mar SGD 9.5 cents.  Its 52 weeks high and low, $6.5 cents on 10 May 2011 - $10.1 cents on 22 Feb 2012.

NAV as of 31 Dec 2011 - USD 12.13 cents  (2010 : USD 11.02 cents)


CDW has been consistently paying USD 0.3 cents semi-annual dividend for a few years now.

-end-

Saturday 17 March 2012

Cash - Closing Status 16 Mar


Bought into UMS 5 lots this week as l was attracted to its good dividend rate of $0.03.  l am hoping to be able to exit it before it goes ex-dividend on 3 May.  Expected dividend amount is $150 but with the stock market is still directionless, l hoping to exit it with nett gain between $50 to $150; as 3 May from now is really a short time frame investment.  If l am not able to exit UMS at the nett gain target or at breakeven then l would average down.

Sold off BH Global 25 lots this week.  I have invested into BH Global twice already (in year 2012) and the dividend rate declared is at $0.007 but its ex-dividend date not being announced yet. And in both times, the nett gains were higher than the expected dividend amount.


Portfolio walk since previous posting :-

$949 Total Returns as of 9 Mar 

+$267 Gain on sales of BH Global

+$285 Unrealised positions improved

$1,501 Total Returns as of 16 Mar

previous posting :- Cash - Closing Status 9 Mar

SRS - Closing Status 16 Mar


One entry in the SRS portfolio this week; sold off SingPost 5 lots at nett gain of $65.  Its expected next ex-dividend date is in early July and for 5 lots at dividend rate of $0.0125, the expected dividend amount is $62.50.  My exit selling price which resulted in $65 nett gain is in line with the next expected dividend amount of $62.50 for 5 lots.



Portfolio walk since previous posting :-

-$1,389 Total Returns as of 9 Mar 

+$65 Gain on sales of SingPost

+$345 Unrealised positions improved

-$979 Total Returns as of 16 Mar


previous posting :- SRS - Closing Status 9 Mar

Thursday 15 March 2012

Boustead energized

Boustead Energy-related engineering division awarded S$35m in contracts

- Over S$138 million of oil & gas contracts secured by division in FY2012
- Boustead Group’s order book backlog raised to S$345 million

Singapore, 15 March 2012

Boustead Singapore Limited (“Boustead”) is pleased to announce that its Energy-Related Engineering Division has recently secured approximately S$35 million in contracts from the oil & gas industries globally.

The contracts involve the design, process engineering and construction of key largescale process systems, waste heat recovery units and critical process control systems for oil & gas infrastructure developments in Australia, Brazil and India.

Mr Wong Fong Fui, Chairman and Group Chief Executive Officer of Boustead said, “Riding on the strengthening global crude oil prices over the past year, our Energy-Related Engineering Division has secured over S$138 million worth of contracts in FY2012, which is soon coming to a close. Along with recovering demand for core process equipment, the demand for waste heat recovery units has also been accelerating as clients recognise that waste heat recovery can minimise the need for supplemental heating and address utility requirements at the same time.”

Mr Wong added, “Across the Boustead Group, we have witnessed our business development efforts bearing fruits with S$345 million in new contracts secured throughout FY2012, exceeding the S$246 million in contracts for the whole of FY2011. Other than our success in energy, our industrial real estate solutions specialist, Boustead Projects has also been awarded a number of high-profile contracts in FY2012 from the likes of Bell Helicopter, Kerry Logistics and ST Electronics.”

With the addition of the latest contracts, the Boustead Group’s order book backlog (as at the end of December plus new orders since then) currently stands at S$345 million.  The latest contracts are not expected to have a material impact on the profitability, earnings per share and net asset value per share of Boustead in the current financial year ending 31 March 2012. However, the latest contracts are expected to have a positive material impact on the profitability and earnings per share of Boustead in the next financial year ending 31 March 2013.

-end-

Wednesday 14 March 2012

The stock market, sense and sensibility

Beginners or even smaller retail investors who are so eager to profit from the strengthening market  have been pouring in all their hard toiled savings or salary into the stock market; and these group of people relying heavily on stock market tips.   More educated retail investors have been selling or stayed on the sideline hoping for the big correction to come.   Technicalist have been twirling charts and have burned many midnight candles to predict how each chart would be able to offer their next pattern, more of or for short holdings.   Fundamentalist are using both their micro and macro knowledge to deep dive the company and economy to foretell on investible funds of it being able to generate good profits, more of or for long holdings.  Decision, and more decisions to be made; so, what will it be?  Retail investors who have their own time and target, can still decide whether to get in into stock market or not, which has now gained strength.   Right decision, then there is good realized profits to be made.  Incorrect decision, then it ends up staring at the paper loss for days, weeks, months and years!    

How about institutional players?  Of late, they too have been selling or stayed on the sideline hoping for the big correction to come.  These group of investors have bigger target to achieve.  With the current market now quite bullish, they will need to get into the stock market in a big way or else be left behind if the market continues upward trend.  They will be wooing cash rich investors to park their funds with them and promising them handsome returns.  They will too,  coaxing small retail investors to buy into unit trusts and other investment related products on a projected returns.  However, once the stock market going downhill then weaker investment company could collapse, unit trust price will be lowered, more margin calls for topping up and all other negatives; and hence the end consumer especially the small retail investors and retirees will suffer most.  On the contrary, when the stock market keeps a bullish momentum for days and weeks (and months) then the end consumers will be tracing up so-called best investment company to park their funds for a so-called worry-free returns.

Are happy days really have arrived and continuing?   Or a bull trap?  Back to decision, more decisions to be made; again!            

Monday 12 March 2012

What's in store at Popular?


Another good quarterly results by Popular Holdings, as was announced on 9 March..

Book companies in Singapore need to learn the survival skill from Popular.  The razor thin bottom line on books alone is not suffice. Popular's good profit continue to grow with the help of its two other smaller businesses of publishing and e-learning and also property development.

Now that MD Wayne Chou already left Popular in such a huff and puff speed, l wonder whether all unhappiness have been resolved in the back office or management level?  Is there any succession plan at Popular after Wayne Chou's leaving?

I am also wondering that with vacancy left by Page One in Vivocity, will Popular eye the vacated spot?    Probably Harris Bookstore is finally making a come back after vacating Jurong Point and Great World City? 


>>>>>


For the 3rd quarter ended 31 January 2012, Popular's net profit rose 18.4% y-o-y to S$26.4 million.

- Group turnover of S$426.7 million
- Net profit of S$26.4 million
- EPS of 3.14 cents

Singapore, 9 March 2012 - Popular Holdings Limited (“Popular” or the “Group”) today announced its unaudited financial results for the 9 months ended 31 January 2012 (“year-to-date Q3 FY2012”).

Driven by growth from the Retail & Distribution and Property Development divisions, the Group recorded S$15.4 million year-on-year improvement in turnover to S$426.7 million for year-to-date Q3 FY2012.

The Group is pleased to report that net profit (profit attributable to owners of the company) rose 18.4% year-on-year to S$26.4 million. Earnings per share increased to 3.14 cents from 2.65 cents in the same period of the preceding year.

Year-to-date Q3 FY2012, the Group generated operating cash flow of S$29.9 million. As at 31 January 2012, the Group cash position remained strong at S$129.3 million. Excluding bank loans of S$29.7 million, the Group was cash positive at S$99.6 million.

As at 31 January 2012, total shareholders’ equity of the Group was S$208.0 million with Net Asset Value per share at 24.73 cents.

Sunday 11 March 2012

ADIA reducing stake in MIIF


Announcement made today that Abu Dhabi Investment Authorithy have sold 4 million shares (hence, its stock holding reduced to 5.9509% from 6.2890%) in MIIF.   Time frame of sales period was not made known; probably after it went ex-dividend?

But how to explain on below on ADIA previous / recent announcements on sales of MIIF as follows :-

a. 22 Feb :- from 7.6597% to 6.9990%

b. 7 Feb :- from 9.99% to 7.6607%

Loyz not fully announcing results of IPL

Interlink Petroleum (IPL) is the subsidiary of Loyz.

The last time Loyz announced IPL's 1st quarter results on 10 Aug 2011  whereby Rs. 0.11 crore net loss was reported.  Ever since, Loyz did not report IPL's net losses in 2nd quarter of Rs. 0.02 crore and 3rd quarter of Rs. 0.09 crore.  Why is Loyz being so selective to announce IPL's results?

IPL's full year 2011 net loss was at Rs. 0.48 crore.
Its nine months results is now at net loss of Rs. 0.39 crore.

Testing of wells in Modhera field and Baola field are ongoing.  Baola field(s) of only 4 sq. km seems promising of  gas production of good quality.  But the bigger Modhera field(s) of 12.7 sq. km is requiring more tests to be carried out and hence more funds are needed.

This is the link to up-to-date news on IPL as one cannot really depends on Loyz to do this matter.

Saturday 10 March 2012

Cash - Closing Status 9 Mar

No other transactions this week except dividends received in the mail on Cache, SingPost, Sabana Reit, First Reit, Starhill and Mapletree Industrial.

Portfolio walk since previous posting :-

$790 Total Returns as of 2 Mar 

+$314 Dividends from Cache, SingPost, Sabana Reit, First Reit, Starhill and Mapletree Industrial

-$155 Unrealised positions worsened

$949 Total Returns as of 9 Mar


previous posting :- Cash - Closing Status 2 Mar

SRS - Closing Status 9 Mar


The only movement under the SRS category is the dividends received.  From the bank statement received this week, dividends received in the month of February were from SGX, FSL Trust and SingPost.


Portfolio walk since previous posting :-

-$1,780 Total Returns as of 17 Feb 

+$286 Dividends on SingPost, SGX and FSL Trust

+$105 Unrealised positions improved

-$1,389 Total Returns as of 9 Mar



previous journal :- SRS - Closing Status 17 Feb

CPF - Closing Status 9 Mar


From the bank statement received this week, there were two transactions on dividends received in the month of February under the cpf portfolio for SingPost and Starhill Reit.


Portfolio walk since previous posting :-

-$8,970 Total Returns as of 17 Feb 

+$188 Dividends on SingPost, Starhill

-$1,106 Unrealised positions worsened

-$9,888 Total Returns as of 9 Mar


previous journal :- CPF - Closing Status 17 Feb

Sunday 4 March 2012

Right Reit l Like - 2 Mar

This is the final week to get into to both MIIF and CapitaRChina.  Stock that goes ex-dividend not necessarily will shed its share price.  It is really not so easy to forecast how a share price would react when it goes ex-dividend.  I reckon, stock that goes ex-dividend in a positive stock market would see its share price either unchanged or going up further; and its share price would go south in a negative market.  So, is it still worth going into both MIIF and CapitaRChina?

Looking at ROC itself is not that practical though.  As shown in the table below :- CDL Trust - ROC 3.09%, dividend amount $267;  LippoMalls - ROC 2.93%, dividend amount $293.  Though CDL (3.09%) has a higher dividend yield rate versus LippoMalls (2.93%) but when it comes to absolute dividend amount, LippoMalls ($293) is much better than CDL ($267).  As below is based on last year's declared interim dividend rate, circumstances this year would be different.  For example, Pluit Village and Plaza Medan Fair will add more rent collections for LippoMalls and revenue from Studio M Hotel will go into full swing for CDL.


The table below is assuming that all other matters remaining constant as each Reit stock has varied and many types of planned changes to its portfolios; so, the table below is just a quick guidance of the possible returns which can be so much different for an investment amount of $10k.   


Just to remind myself on my journal of 18 Feb :-
Money is always not enough so it must be used to work hardest so as to generate highest returns.  Assuming that l have $10k of funds and my focus is Reit and business trust; and also investment horizon timeline is important - one to two months or less than 6 months. Because of short investment timeline preference, l will not be looking at annual dividend payout rate. So, this table goes to show that with a available funds of $10k, l can get say, Cambridge 19 lots and its dividend amount of $190 versus say, Sabana Reit 10 lots which generates dividend amount of $304. Both stocks are having ex-dividend dates in May month.  A loyal investor on Cambridge would loose out to a cyclical investor who would have selected Sabana instead.  If stock prices are lowered (or gone up) then l can buy more (or less)  and this will directly affecting the dividend amount and its yield.  If the overall stock market is in a bull run but not supported by a bullish economy then there is no reason to drool over the high dividend amount and buying into the high dividend yield stock immediately.  Just Do It is not suppose to work this way.

previous journal :- Right Reit l Like - 24 Feb

Saturday 3 March 2012

Cash - Closing Status 02 Mar

Cash portfolio status as of this week as below.

Sold Ascendas India Trust 4 lots and SingPost 12 lots
AscendasIndT (CY6U) - This stock has been the last of the remaining stocks to be sold off on investments committed within the last six months.  I reckon that l must have purchased it at high price levels back then.  I do hope to get it back at lower prices as it is a good stock to have.
SingPost (S08) - Managed to sell off very close to breakeven finally.  This stock was a combi of 2 stocks purchased at higher price and 10 stocks purchased as average down.  Will consider re-entering only when it goes below $0.95.

Bought BH Global 25 lots, Advanced Holdings 20 lots.  Emotion gets the better of me and l could not control my itchy hands by placing buy orders into BH Global (B32) and AdvaHldg (5IA) this week.  Of course, l am feeling guilty of it now.  It is really a mistake to commit into new investments when stocks prices are all at their high levels now.  Hope to get out of them next week; otherwise will hold on to these stocks to get the dividends and thinking over their fate ex-dividend.





Portfolio walk since previous posting :-

$1,408 Total Returns as of 24 Feb 

+$215 Gain on sales of Ascendas India Trust + Dividends from K-Reit and FSL Trust

-$833 Unrealised positions worsened; primarily due toForeland

$790 Total Returns as of 02 Mar


Previous posting :- Cash - Closing Status 24 Feb









UE EC explained on doubtful debts allowance


In my previous journal, l have noted that UE E&C did not offer explanation on the increase in Other receivable provision by $3.2 million.

Now and finally, SGX queried UE E&C on this matter.


 SGX Query:
(a) We note that the Company made an allowance for doubtful other receivables amounting to $3.49 million for FY2011, representing an increase of $3.19 million as compared to FY2010. Please provide more information on the debtor and reasons for the allowance made.

Company’s response to SGX Query:
The allowance for doubtful other receivables comprises mainly allowance for claims and expenses recoverable against sub-contractors mainly for work done and/or materials paid on their behalf, relating to various projects completed in previous years. In respect of those past due claims whose recoverability is deemed doubtful and for those under liquidation, allowance has been made in the current year.

I am still wondering :-

1. timing - why was this $3.2 million of doubtful debts allowance not been made known when its nine-months results released on 8 Nov?

2. assuming that the allowance on doubtful debts are on the sub contractors receivables which are more than a year old then how much more debts owing by these failed sub-contractors in the past due buckets of say, more than 90 days but less than a year?

3. let's hope that this big increase of doubtful debts allowance is not making another appearance in current financial year otherwise, would it not be more efficient to consider factoring service on those other receivable which are riskier?

In my same previous journal, l have expected its share price to go higher; and it has now boomed past its previous 52 weeks high and its share price is now currently in an unchartered zone.  It should be heading towards $0.60 and above soon and after that it  should be resting and stabilise in the $0.50 - $0.60 range when current bull market ended; whereby it could be a good accumulation range for its next climb, in the next bear market  recovery of course.

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