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Sunday, 24 November 2013

Cash - Closing Status 22 November

Invested into Duty Free 6 lots in this week under Cash portfolio but divested away 1 lot in the same week for $13 nett gain so, remaining total holding now at 5 lots.  For its 2Q2014 financial results, revenue -1.3%, profit -65.5%.  Profit lowered mainly due to decrease in revenue, higher net foreign exchange loss and rental of premises of RM5.9 mil and RM 3.0 mil respectively.  To improve operational efficiency, in this week it announced internal reorganization exercise and disposal of its shareholding in its so called Border Town and airport businesses and Down Town businesses which scheduled to be completed within current financial year.   

Added K-Green Trust 1 lot in this week but have decided to divest it all (2 lots) away in the same week for a small nett gain of $14 as part of usual portfolio re-balancing.  For its 3Q2013 financial results revenue was flat versus last year; profit +7.4%.  It is quite a defensive stock as all three assets in its portfolio have long-term concession agreements with NEA and PUB.   Senoko Trust and Tuas DBOO Trust derive most of their income from capacity payments, which offer a stable source of income with little correlation to economic or demographic fluctuations.  Ula Pandan Tust's income is derived in equal parts from availability payments and from NEWater output payments.   Its current businesses have been locally based so far.    Looking forward for it to spread its wings to Asia Pacific and Europe soon.

Sold away Ascott Reit 200 rights shares for $40 proceeds.   Purposes of rights issue are to pay down its debt, to fund capex and AEI and for general corporate and working capital uses.    The increase in its debt headroom as a result of reduced borrowings will enhance its flexibility in pursuing potential acquisitions and at the same time improve its competitive positioning in the market via AEI plans.  Its gearing level post Rights will improve to 34.3% from 41.1% (end Sep'13 status).  

Reduced HPH Trust 1 lot in this week as part of usual portfolio re-balancing and to lock-in profit; total holding in it now at 3 lots.  Attractive valuation after recent share price correction.  Its 3Q2013 financial results did not go well with investors but l do not think it is justified.  Its 3Q2013 revenue and profit was +1% and -2% respectively versus last year <--- flat results.  A flat financial results is quite admirable when the world economy is still in turmoil and in spite of the depressed shipping industry which continue to stall freight rate recovery at the moment.   It is in Net Current Liabilities status as of end Sept'13 but overall still at Net Assets status; due to timing of US$3.6 billion term loan facility agreement for the refinancing of the existing facilities which was signed in late Sept'13.  It is still in free cash flow status.  Higher profit from new acquired Yantian container terminals was partially offset by lower profit in Hongkong international terminals.

Invested into Chosen Holdings 8 lots in this week but have decided to book a $67 nett gain after divested it all away within the same week.   For its full year financial 2013, revenue was flat mainly due to weak orders for its data media storage product from the Singapore operation and lower orders for printing and imaging and communication product from its Malaysia operation; which was offset by strong orders for its Thailand operation's communication products and the China operation's automotive and printing and imaging products.  Profit -17.7%.  Gross margin declined from 8.0% to 4.5% due mainly to losses incurred by the Singapore operation as a result of lower sales of its higher value-added products.  Lower other income because of a one-time insurance claim received (of $2.8 mil) in respect of the flood affecting the Thailand operation in the previous year.   It pays dividend in every financial years;  dividend rate of $0.0066 was paid for its last three financial years;  lowest dividend rate of $0.005 in financial year 2009 and highest dividend rate of $0.0139 in financial year 2010.  Its NAV was at 22.91 cents as of end June'13 versus its last traded price in this week at 12.00 cents.

Re-invested into Singapore Shipping Corp (SSC) 1 lot in this week after having divested it all away in the previous week.  The acquired agency and logistics business completed in April is almost god-send as SSC existing business segment of ship owning and management will be quite soft in FY2014.  One ship reaching its end of charter and economic useful life by end of 2013 and two ships going into dry docking so a reduction in income from the ship owning segment.  However, the newly acquired business can more than make up for the shortfall in the ship owning business.  For its 2Q2014 financial results, revenue +72.4%, profit -19.4% due to an insurance related recovery of approximately $1 mil in the previous year, higher exchange gain in the previous year, higher corporate costs and taxation in current financial year as incurred by the newly acquired agency and logistics businesses.  Bank borrowing decreased due to monthly instalment repayment.   On 8 Oct'13 its subsidiary company has signed an agreement to purchase a 10 year old pure car and truck carrier, which will be chartered out immediately upon purchase completion in 2Q2015.

Invested into GRP Ltd 11 lots in this week under Cash portfolio.  For its 2013 financial results, revenue -2.3% mainly due to lower non recurring projects completed in last year for its Measuring Instrument segment which also impacted profit.  Profit -30.3%.  Lower other income due to one time gain for the disposal of its China subsidiary in 2012.   It recently did a rights cum warrants issue for the required funding to develop and manage properties in Myanmar.

Divested Tee International 15 lots in this week under Cash portfolio for a nett gain of $52 but added back 8 lots of it so total holding in it now at 17 lots.  It delivered mix financial results for 1Q2014; revenue +ve 24% driven by ongoing and completed engineering projects and profit -ve 62% due to higher administrative expenses and higher opex.  Higher administrative expenses was due to one off bonus payment to employees and higher staff costs and headcount in line with its business and operations expansion.  Giving extra bonuses is a good thing to do as it motivates employees which is in recognition of their hard works.  Higher opex due to unrealized forex losses that resulted from the depreciation of the MYR against the SGD.  It is in net cash used at the moment mainly due to cash received from receivables net off payment to trade payables, interest and income tax expenses and decrease in development properties.  Its chief executive & managing director, Mr Phua has 51% shareholding in Tee Intl as shown in the 2013 annual report so one can be well assured that he will run this company with very much more care and growing it at the same time.  Recently, it has signed an MOU with Loxley Public Company, a public company listed on the Stock Exchange of Thailand to explore opportunities in renewable energy business and related activities in the Indochina region - Myanmar, Laos DPR, Vietnam, Thailand and Cambodia.

Portfolio walk since previous posting :-

+$2,907 Total Returns as of 15 November

+$207 Gain on sales of Duty Free, K-Green, HPH Trust, Tee International, Chosen, Ascott Rights

-$444 Unrealised positions worsened

+$2,671 Total Returns as of 22 November

Previous posting :-Cash - Closing Status 15 Nov

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