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Blog Archive

Sunday, 23 November 2014

Stock changes 21 Nov

Latest stock holdings :-  

Movements since previous updates :-

2nd Chance Properties
Invested into it for 2 lots under Cash stock holdings.  For its Qtr 4 results, revenue - 16.14%, profit -87.97%.  Contributions from its apparel, gold and properties segments fell due to the closure of some outlets, the lower retail price of gold, and the absence of a fair value gain on its properties respectively.  Gold business to remain profitable.  Downward pressure on rentals can be expected in the short term.  The barrier to entry in the apparel segment is low, due to numerous government schemes helping small bumiputra businesses and easier access to suppliers compared to a few years ago.  It had come up with a new strategy to increase revenue and profits under its First Lady apparel business in the wake of intense competition in Malaysia where it faces strong headwinds from hundreds of new boutiques.  It wants to turn its apparel business into a Malay version of the internationally successful H&M retailer.   It intends to distribute a dividend of no less than 3.55 cents per share for FY2015 (3.50 cents in FY2014).  CEO Mr Mohamed Salleh declared on 4 Nov having bought from the open market 591 lots of 2nd Chance Properties. 

CM Pacific
Net divestment of 112 lots (Cash 19 lots, CPF 65 lots, SRS 28 lots); nett realized profit $282.  Proceeds have been used for re-investment into other stocks.  For its Qtr 3 results, revenue +9%, profit +35%.   The increase in revenue was largely attributable to the revenue growth from Yongtaiwen Expressway, the consolidation of Jiurui Expressway and the increase in bank interest income.  Higher profit mainly due to higher profit contribution from the toll road operations.   Its toll road business is expected to continue to deliver positive results, in light of the economic development and the continued growth in car ownership in the respective regions where its toll roads are located. Future catalysts include acquisitions of new toll roads, and organic traffic growth of Jiurui Expressway.  

Invested into it for 20 lots (Cash 6 lots, CPF 9 lots, SRS 5 lots).  For its Qtr 2 results, revenue - 2.2%, profit -6.5%.  Strong and healthy Balance Sheet.  Lower revenue and profit from Food Solutions due to lower contributions from its Japan subsidiary (TFK), loss of contributions from its Australian subsidiary which was divested in July 2014 (Urangan) and weakening of the Japanese Yen.  For its Gateway Services higher revenue driven by the growth in cargo tonnage in Singapore but profit suffered due to overall reduction in cargo volumes and price pressure. In the immediate future, its operating landscape remains challenging given the ongoing pressures on regional aviation and rising manpower costs.  Airlines will continue to rationalize capacity to match the slowing demand. The negative pressures arising from overcapacity of airline caterers at Narita Airport will continue to put a strain on TFK's profitability as competition continues to intensify. It will continue to invest into state-of-the-art facilities, comprehensive suite of services and new technologies to improve economies of scale and enhance connectivity for its customers.  It stays focused on growing new businesses and customer segments.  SATS Coolport which is wholly owned by SATS is now  the world's first centre of excellence for independent validators in pharmaceutical handling; after 75 of its employees received IATA Pharmaceutical Handling Diploma as announced on 21 Nov.  With this certification from IATA, SATS Coolport can now train, advise and support industry stakeholders in pharmaceutical handling, to meet the rigorous requirements of the pharmaceutical industry. 

SIA Engineering
Invested into it for 10 lots under both Cash and CPF stock holdings; but later divested 6 lots in CPF stock holdings for $127 net realized profit.  For its Qtr 2 results, Revenue -3.0% due to lower airframe and component overhaul revenue, which was offset slightly by increased revenue from fleet management. Strong and healthy Balance Sheet.  Profit -40.7% due to higher subcontract costs, lower share of profits from associated and joint venture companies, lower contributions from the engine repair and overhaul centers.  Currently, it has 25 joint ventures, spread over nine countries worldwide.  Near-term, decline are expected in engine shop visits and heavy checks; pressure on margins due to rising business costs and intense competition.  It may be going through the cyclical period where customers are deferring aircraft checks.  Older engine models are being retired on an accelerated basis and newer models require less engine shop visits, thus lowering utilisation rates and profitability.  It is stepping up efforts to improve productivity to stay competitive in this overall challenging environment.  It stays the course in its pursuit of value-added collaborations with strategic partners. It has recently entered into a proposed JV with Boeing to provide fleet management services to Boeing customers in South Asia Pacific region.

ST Engineering
Invested into it for 3 lots under CPF stock holdings.   For its Qtr 3 results, revenue +0.2%, profit -9.4%.  Overall flat revenue; main highlights - higher revenue from Marine sector was largely offset by lower revenue recorded by Aerospace sector, while revenue for Electronics and Land Systems sectors were comparable.  Lower profit due to double digit profit drop as recorded by Aerospace sector but was partially offset by higher profit from Electronics sector, while both Land Systems and Marine sectors reported comparable profit.  Strong and healthy Balance Sheet.  Near-term it will closely monitor and review its aerospace sector's European business.

Tee International
Divested 4 lots of it under Cash stock holdings for $35 net realized profit.  For its Qtr 1 results, revenue -38.5%, profit +93.2%.  Huge drop in revenue due to lower revenue recognised from on-going projects.  Huge jump in profit driven by gain on disposal of a subsidiary, Interlift Sales Pte Ltd and net foreign currency exchange adjustment gain derived from strengthening of the Malaysian
Ringgit and Thai Baht; in 1QFY2014, there was a net foreign currency exchange adjustment loss
of S$1.3 million.  Its CEO Phua Chian Kin still from time to time acquiring Tee International shares from the open market; his stake in the company now nearing 60%.

Starhub Ltd
Added 3 lots of it under SRS stock holdings.  For its Qtr 3 results, revenue +2.3%, profit +2.6%.  Higher revenue mainly driven by higher sales of equipment.  Higher profits contributed by higher revenue and other income, offset by higher operating expenses.  It will maintain annual cash dividend
payout of 20 cents per ordinary share for 2014.

OSIM International
Invested 6 lots of it under SRS stock holdings but divested it away in the next few weeks for $100 net realized gain.   For its Qtr 3 results, revenue +3%, profit -28%.  According to CIMB, the weakening performance of Osim’s core business is worrying; while the company reported a 3% increase in sales but this would have been down 4 percent if topline contributions from TWG were excluded.   The drop in profit was due to start-up and legal costs at TWG Tea, along with increases in wages and rents.


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