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Saturday, 2 August 2014

Cash - Closing Status 1 August

Invested into Amtek Engineering 1 lot in this week as part of  usual and active Cash stock holdings re-balancing.  For its 3Q14 financial results, revenue -1%, profit -61%.  Lower revenue due to weaker end market demand for certain home appliance products and Mass Storage products.  Lower profit due to lower gross profit margins from significantly higher tooling sales which were strategically sold at cost; higher “Non-recurring items” due to termination compensations incurred in South China - to relocate people and resources from one city to another.  Working capital days remained consistent at 24 days.  

Invested into HPH Trust 1 lot in this week as part of usual and active stock holdings re-balancing.  In its 2Q2014 revenue +1.0% and profit -14.9% versus last year.   Slightly higher revenue due to higher container throughput at HIT and YICT, offset by the absence of ACT contributions as it become an associated company after the stake sale.  Lower profit primarily due to higher cost of services rendered from higher external contractor costs and inflationary pressures; and lower contributions from ACT.

Divested away Saizen Reit 3 lots in this week as part of usual Cash stock holdings re-balancing for $16 nett gain.  In its 3Q14 results, NPI +2.5%, profit +JPY 314 mil.  Quarter-on-quarter gross revenue remained stable while net property income decreased by 4.1% as compared to 2Q FY2014. Property operating expenses increased by 9.4%, due mainly to seasonal expenses.  Higher profit due mainly to (i) the increase in net income from property operations, and (ii) the non-recurrence of refinancing-related costs incurred in 3Q FY2013, namely swap breakage costs (JPY 135.5 million) and loan commission written-off (JPY 148.0 million). Average occupancy rate at 91.1%.  As Saizen REIT’s distributable income from operations is generated in JPY, its S$-denominated distributions have been hedged.  Interest rates for 90% of loans outstanding are fixed.  Nearest loan maturity is in February 2018.  Gearing at 38%.   Deloitte & Touche has in early June'14 completed the strategic review of options for enhancing its unitholder’s value.  The review concluded that as a matter of priority, focus will be placed on its capital structure, in particular, its cash management and levels of leverage. As funds are made available as the capital structure is optimised, it will continue to seek opportunities to expand its property portfolio in line with its principal investment strategies.  It may also consider a buy-back of its shares at times of Unit price weakness, as a useful signaling mechanism and provided that is deemed as an effective use of capital at that time.  Following capital structure optimisation, more ambitious growth strategies will be explored, subject to availability, compatibility, returns and execution considerations.

Cash stock holdings walk since previous posting :-

+$11,377 Total Returns as of 25 July

+$16 Nett gain on sales of Saizen Reit

-$594 Unrealised positions worsened

+$10,798 Total Returns as of 1 August

Previous posting :- Cash - Closing Status 25 July

Remarks :- Profits locked in to-date $17,314 / year 2014 $5,821

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