Holdings as at 31 Dec 2007:
Cash
Cacola Furniture
Changtian Plastic & Chemical
China Fishery
China Energy
ChinaWheel
ChinaXLX
Jiutian Chemical
Sihuan
Sinotechfibre
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
Monday, 31 December 2007
Performance of Virtual Fund for Dec 2007
Holdings as at 31 December 2007
China Fishery 40,000 @ $1.79, Unrealised Profit = $2,400
China Hongxing 100,000 @ $1.27721088, Unrealised Loss = -$31,721.09
Raffles Education 15,000 @ $3.06, Unrealised Loss = -$300
Sino Techfibre 90,000 @$1.03222, Unrealised Loss = -$2,900
STX Pan Ocean 80,000 @ $3.354875, Unrealised Gain = $22,810
Sum invested = $606,511.09
Cash holding = $4,830
Realised profit = $111,341.09 = 22.27%
Unrealised Loss = -$9.711.09
China Fishery 40,000 @ $1.79, Unrealised Profit = $2,400
China Hongxing 100,000 @ $1.27721088, Unrealised Loss = -$31,721.09
Raffles Education 15,000 @ $3.06, Unrealised Loss = -$300
Sino Techfibre 90,000 @$1.03222, Unrealised Loss = -$2,900
STX Pan Ocean 80,000 @ $3.354875, Unrealised Gain = $22,810
Sum invested = $606,511.09
Cash holding = $4,830
Realised profit = $111,341.09 = 22.27%
Unrealised Loss = -$9.711.09
China Wheel's Visionary Leader
Written by Sim Kih
Monday, 31 December 2007
China Wheel executive chairman Zang Ligen wants to double capacity with a new plant in Tianjin. About 80% of new Chinese automobiles from world No.1 automaker Toyota come fitted with wheels made by SGX-listed China Wheel.The wheel maker produced about 10 per cent of the 30-odd million wheels installed on Chinese automobiles in 2006.
Monday, 31 December 2007
China Wheel executive chairman Zang Ligen wants to double capacity with a new plant in Tianjin. About 80% of new Chinese automobiles from world No.1 automaker Toyota come fitted with wheels made by SGX-listed China Wheel.The wheel maker produced about 10 per cent of the 30-odd million wheels installed on Chinese automobiles in 2006.
One of the largest OEM or original equipment manufacturer wheel suppliers in China, China Wheel raked in 446.5 million yuan (S$87 million) for the first half ended June 2007. Net profit leaped 81% year-on-year to 55.4 million yuan, consistent with its 97 per cent compounded annual growth rate since FY2002. Return on equity improved 6.8 percentage points to 33.9 per cent. All this has translated into strong cash flows as well, with cash from operations improving 71 per cent to 57.4 million yuan for FY2006. The company also had a cash pile of some 89.6 million yuan as at June 30, 2007. And the good times are not about to end. “The industry is expected to grow up to a hefty 30 per cent annually,” says its 49-year-old executive chairman, Zang Ligen in a 90-minute telephone interview from his office in China.
China Wheel is seizing the golden opportunity afforded by the Chinese auto boom: it is more than doubling existing capacity to 8.6 million wheels over the next two to three years. Some RMB 780 million has been budgeted for a new plant in Tianjin, which sits on a gigantic plot of land equivalent to 40 FIFA-sized football fields (285,000 square meters).
Farmer turned smelter moves into manufacture of alloy wheelsChina Wheel’s business was founded by Mr Zang and his two brothers: Lizhong, 45 and Liguo, 42. They turned to manufacturing wheels as an extension of their successful business of manufacturing aluminum alloy ingots, which they had started in 1984. The trio come from a farming background. After 11 years in the aluminum alloy business, Mr Zang had a treasure trove of smelting technology and management expertise for producing raw materials for aluminum wheels. At that time, they were supplying alloy to China’s first aluminum wheel maker. Aluminum alloy is mainly used in the automotive industry for making engines and wheels. From supplying raw materials, Mr Zang embarked on making wheels in 1995. Demand for aluminum alloy wheels then was less than 10 per cent of what it is today.
Aluminum wheels are safer, conserve energy, more environmentally friendly and visually appealing than steel wheels.Recognizing the strong advantages – namely, product safety, energy conservation, environmental friendliness and aesthetic flexibility – aluminum alloy had over steel, Mr Zang was convinced car owners would switch to aluminum alloy wheels. He also decided to take advantage of the fact that large wheel manufacturers back then supplied only original equipment make to carmakers. There were no wheel makers catering to the retail aftermarket. Mr Zang decided to enter that segment.“We wanted a business that adds more value compared to smelting,” explains Mr Zang.Wheel-making’s gross margins can be as high as 3 to 4 times that of aluminum production.
Aluminum wheels are safer, conserve energy, more environmentally friendly and visually appealing than steel wheels.Recognizing the strong advantages – namely, product safety, energy conservation, environmental friendliness and aesthetic flexibility – aluminum alloy had over steel, Mr Zang was convinced car owners would switch to aluminum alloy wheels. He also decided to take advantage of the fact that large wheel manufacturers back then supplied only original equipment make to carmakers. There were no wheel makers catering to the retail aftermarket. Mr Zang decided to enter that segment.“We wanted a business that adds more value compared to smelting,” explains Mr Zang.Wheel-making’s gross margins can be as high as 3 to 4 times that of aluminum production.
Transition challenges
His first challenge was to assemble a team experienced in casting wheels, a far more complex task than smelting alloy. Key supporter was state-owned wheel-maker Dicastal Wheel, who was also Mr Zang’s aluminum alloy customer then. Dicastal Wheel seconded its machining and sales head, Zhang Jianliang, to develop the new business segment. Mr Zhang, 41, designed the China Wheel’s first production lines.Mr Zhang, incidentally, is an industry pioneer who brought German technology into China’s aluminum casting industry. He has risen to become China Wheel’s chief executive officer. Raising capital was Mr Zang’s next challenge. Capital expenditure for wheel production was five to six times that of smelting.
Steady output increase has doubled net profit annually since FY02. To make a million aluminum alloy wheels, the smelter only needs to invest 20-30 million yuan in a factory with capacity to smelt 10,000 tonnes of alloy raw materials. In comparison, the wheel maker needs to invest 100-120 million yuan for his factory to have capacity to die-cast 10,000 tons of alloy into a million wheels. Lack of financing was the reason why China Wheel’s first production line, completed in 1996, had capacity for 50,000 wheels a year only.
Steady output increase has doubled net profit annually since FY02. To make a million aluminum alloy wheels, the smelter only needs to invest 20-30 million yuan in a factory with capacity to smelt 10,000 tonnes of alloy raw materials. In comparison, the wheel maker needs to invest 100-120 million yuan for his factory to have capacity to die-cast 10,000 tons of alloy into a million wheels. Lack of financing was the reason why China Wheel’s first production line, completed in 1996, had capacity for 50,000 wheels a year only.
Fast forward to today: capacity has risen more than six-fold in the past decade to 3.6 million wheels currently.Mr Zang’s vision is for China Wheel to be the leader in China’s wheel making industry through economies of scale in production capacity. Economies of scale will also help the company maintain its gross margins, already one of the highest among Chinese aluminum wheel makers. Self-confessed workaholic with a penchant for touring factories
Over the last 20 years or so, Mr Zang has kept up more or less the same punishing pace of work.He works almost every day, including weekends. And it’s 12 to 14 hours a day. “It would appear strange if a company’s senior management does not clock overtime,” he says. Zang has a penchant for touring factories. He recounts how he has toured Japanese, German and South Korean factories to check out their highly advanced aluminum wheel technology and see for himself their much-vaunted operational efficiency. Some of these visits were done surreptitiously, he says with a chuckle, adding that he has “imported” factory operational procedures after those visits.
The company lays claim to being one of the most efficient among Chinese aluminum wheel makers. “Our net margins are one of the highest in the industry,” he says.Net margins of China Wheel have held above 10 per cent since its October 2005 listing.Shenzhen-listed aluminum wheel maker Zhejiang Wanfeng Auto fades in comparison with net margins at a mere 3 per cent for the first nine months ended September 2007.
A gentle leader
Zang is the eldest son in the family, a position which he says comes with a heavy responsibility. He feels the pressure to uphold the family’s prestige by continuing to achieve success in business. He also recognizes the challenge of providing for the growing number of old guards in the company.
All these drive his business ambition.
People who know him well say he is refined and courteous – not exactly someone who likes to reprimand workers. Not surprisingly, he will come up with persuasive devices, such as a cartoon character, to make a point to his workers.
People who know him well say he is refined and courteous – not exactly someone who likes to reprimand workers. Not surprisingly, he will come up with persuasive devices, such as a cartoon character, to make a point to his workers.
When they carelessly handled “wheel separators” – which are placed between wheels on a stack - the company designed a friendly cartoon character and used it on a sticker on the separator to graciously remind them to “cherish factory property,” says Mr Zang. He is a simple man when it comes to leisure. He says he enjoys catching up on news in newspapers and over radio. He also likes to chat with board members, colleagues and strategic investors about historical and urrent social trends in China and Singapore. Accompanying his wife, Liu Xia, 49, on shopping trips to the supermarket is another simple pleasure Zang delights in.
The couple have a daughter, Zang Na, 26, who holds a degree from Japan’s Kyorin University. Their son, Zang Yongxing, 23, is a third-year undergraduate in the UK. In any business, gracious treatment of clients can turn them into faithful customers for life. Such an approach has resulted in 60 per cent of Zang’s customers for aluminum alloy staying with him for 15 years or more, a rarity in the industry. And many wheel customers have been with China Wheel since day one.
This article was recently published in Pulses magazine and NextInsight.
Friday, 28 December 2007
STX Pan Ocean to allow share moves between Singapore and Seoul
Reuters News:
- SINGAPORE, Dec 28 - STX Pan Ocean , a South Korean shipping firm whose stock is listed in Seoul and Singapore, said investors will be able to shift their shares between the two markets from 2008 after regulatory changes.
"We'll work on details of the share migration process and make them available to investors soon," an STX spokesman said on Friday.
"The legal barriers in migrating shares have been lifted but investors will have to bear risks associated with foreign exchange moves and the time required to make such migration."
STX's Singapore-listed shares, which were halted from trading prior to the announcement, soared 25.4 percent to a five-week high of S$3.65 when the shares resumed trade at 0830 GMT, before closing 21 percent higher at S$3.51. [ID:nSIN287314]
The stock is still trading at a 32 percent discount to the Korea-listed stock, which closed at 2,990 won or about S$4.62. (Reporting by Daryl Loo and Melanie Lee in Singapore; Additional reporting by So Eui Rhee in Seoul; Editing by Jan Dahinten)
- SINGAPORE, Dec 28 - STX Pan Ocean , a South Korean shipping firm whose stock is listed in Seoul and Singapore, said investors will be able to shift their shares between the two markets from 2008 after regulatory changes.
"We'll work on details of the share migration process and make them available to investors soon," an STX spokesman said on Friday.
"The legal barriers in migrating shares have been lifted but investors will have to bear risks associated with foreign exchange moves and the time required to make such migration."
STX's Singapore-listed shares, which were halted from trading prior to the announcement, soared 25.4 percent to a five-week high of S$3.65 when the shares resumed trade at 0830 GMT, before closing 21 percent higher at S$3.51. [ID:nSIN287314]
The stock is still trading at a 32 percent discount to the Korea-listed stock, which closed at 2,990 won or about S$4.62. (Reporting by Daryl Loo and Melanie Lee in Singapore; Additional reporting by So Eui Rhee in Seoul; Editing by Jan Dahinten)
Wednesday, 26 December 2007
Monday, 24 December 2007
Transactions of My Portfolio and Latest Holdings
Bought:
Sinotechfibre
Cacola Furniture
Changtian Plastics
Sold:
ChinaHongxing
Latest Holdings:
Cash
Cacola Furniture
Changtian Plastics
China Fishery
China Energy
ChinaWheel
ChinaXLX
Jiutian Chemical
Sihuan
Sinotechfibre
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
Sinotechfibre
Cacola Furniture
Changtian Plastics
Sold:
ChinaHongxing
Latest Holdings:
Cash
Cacola Furniture
Changtian Plastics
China Fishery
China Energy
ChinaWheel
ChinaXLX
Jiutian Chemical
Sihuan
Sinotechfibre
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
Thursday, 20 December 2007
Transactions of Virtual Fund
Switching of counters:
Sold:
47,000 China Hongxing @ $0.86, Buy price = $1.27721088, loss = -$19,608.91
25,000 Fibrechem @ $1.33, Buy Price = $1.35, loss = -$500
50,000 Sihuan @ $0.76, Buy Price = $0.76, no gain no loss
Sale Proceeds = $111,670
Bought:
China Fishery 20,000 @$1.83 = $36,600
Sino Techfibre 40,000 @$0.935 = $37,400
STX Pan Ocean 13,000 @ $2.66 = $34,580
Cost of investment = $108,580
Sum invested = $606,511.09
Cash holding = $4,830
Realised profit = $111,341.09 = 22.27%
Sold:
47,000 China Hongxing @ $0.86, Buy price = $1.27721088, loss = -$19,608.91
25,000 Fibrechem @ $1.33, Buy Price = $1.35, loss = -$500
50,000 Sihuan @ $0.76, Buy Price = $0.76, no gain no loss
Sale Proceeds = $111,670
Bought:
China Fishery 20,000 @$1.83 = $36,600
Sino Techfibre 40,000 @$0.935 = $37,400
STX Pan Ocean 13,000 @ $2.66 = $34,580
Cost of investment = $108,580
Sum invested = $606,511.09
Cash holding = $4,830
Realised profit = $111,341.09 = 22.27%
My thoughts on current market sentiments, China Fishery and Sinotechfibre
It has been raining whole morning. The mood is similar to the recent share market sentiments. It would be a miracle if STI could hit 4,000 mark with only few trading days to go. It was like Liverpool's fate this morning when it was a goal down to Chelsea and Peter Crouch lost his head. There was no coming back since then.
Despite all the doom and gloom, values do emerge every now and then. Instead of being too pessimistic, one should take this opportunity to reassess his/her share portfolio and be better prepared when the bull returns. Think about it, why should we be so bothered by the 30-component stocks Dow performance? Why should we let the Ang Mohs control our fate and dictate our well being?
Unfortunately China and Asian have not risen fast enough to decouple from the Ang Mohs influence. China may have half of the ten largest companies by market cap but the quality of their earnings and valuations are still a long way off. What to do? Just accept the stupid fact and move on. For serious investors, this should be a good time to accumulate some quality stocks that the Ang Mohs dump to the market. To be fair, they are the ones who buy up these counters and rightfully they have the power to sell them down if they wish to.
Sinotechfibre - Undervalued Synthetic Leather Player
Not long ago it was China Fishery Group where its price dropped more than 50% in a short few days after reporting a slightly disappointing set of Q3 results. Profit margin eroded due to higher operating costs in Peru and softer fishmeal prices. These 2 elements are the perfect ingredients to send the share price plummeting. The situation was probably made worse by the alleged selling by Angmoh funds. These Angmoh funds may have no choice but to sell out some good investments to bail out their good friends at their backyard exposed to the subprime losses.
It was a good bargain and probably still is at current prices. Even our kiasu value investment friend Muzicwhiz scooped up few lots at an average price of S$1.54. I first bought some CFG at S$1.75 and later average down to about S$1.60. The short term negative news aside, the Company has delivered on profitability with increasing capacity. Dividend yield was also very decent at more than 3%.
Sinotechfibre is deja vu of CFG where share price suddenly dropped for bo tai zi. The delay in PMP equipment was widely published in the past and technically should be factored into the share price. The doubling of microfibre production lines should bode well for the Company. The growth in PMP production lines should also further boost its already impressive revenue and profit growth. Sinotechfibre has the first mover advantage in the PMP sector which commands better margins.
Sinotechfibre has been generating high profit margin of above 40% and high ROE of more than 30%. Valuations are at a significant discount to China Sky and Fibrechem eventhough their market values are somewhat very close. At current price of <$1.00, Sinotechfibre trades at a very undemanding FY08 PE of < 8x.
The robust customer demand for synthetic leather which accounted for two-third of its revenue will continue to propel growth in the coming years. The secured orders from People's Liberation Army is a good endorsement of its products and provides stable income stream.
In my opinion, I believe the current share prices present good entry point for investors who wish to participate in the growth story of Chinese companies. When the Ang Moh return from their rescue mission, they will furiously snap up these S-shares with good earnings.
Good luck my friends and have a blessed holiday break!
Despite all the doom and gloom, values do emerge every now and then. Instead of being too pessimistic, one should take this opportunity to reassess his/her share portfolio and be better prepared when the bull returns. Think about it, why should we be so bothered by the 30-component stocks Dow performance? Why should we let the Ang Mohs control our fate and dictate our well being?
Unfortunately China and Asian have not risen fast enough to decouple from the Ang Mohs influence. China may have half of the ten largest companies by market cap but the quality of their earnings and valuations are still a long way off. What to do? Just accept the stupid fact and move on. For serious investors, this should be a good time to accumulate some quality stocks that the Ang Mohs dump to the market. To be fair, they are the ones who buy up these counters and rightfully they have the power to sell them down if they wish to.
Sinotechfibre - Undervalued Synthetic Leather Player
Not long ago it was China Fishery Group where its price dropped more than 50% in a short few days after reporting a slightly disappointing set of Q3 results. Profit margin eroded due to higher operating costs in Peru and softer fishmeal prices. These 2 elements are the perfect ingredients to send the share price plummeting. The situation was probably made worse by the alleged selling by Angmoh funds. These Angmoh funds may have no choice but to sell out some good investments to bail out their good friends at their backyard exposed to the subprime losses.
It was a good bargain and probably still is at current prices. Even our kiasu value investment friend Muzicwhiz scooped up few lots at an average price of S$1.54. I first bought some CFG at S$1.75 and later average down to about S$1.60. The short term negative news aside, the Company has delivered on profitability with increasing capacity. Dividend yield was also very decent at more than 3%.
Sinotechfibre is deja vu of CFG where share price suddenly dropped for bo tai zi. The delay in PMP equipment was widely published in the past and technically should be factored into the share price. The doubling of microfibre production lines should bode well for the Company. The growth in PMP production lines should also further boost its already impressive revenue and profit growth. Sinotechfibre has the first mover advantage in the PMP sector which commands better margins.
Sinotechfibre has been generating high profit margin of above 40% and high ROE of more than 30%. Valuations are at a significant discount to China Sky and Fibrechem eventhough their market values are somewhat very close. At current price of <$1.00, Sinotechfibre trades at a very undemanding FY08 PE of < 8x.
The robust customer demand for synthetic leather which accounted for two-third of its revenue will continue to propel growth in the coming years. The secured orders from People's Liberation Army is a good endorsement of its products and provides stable income stream.
In my opinion, I believe the current share prices present good entry point for investors who wish to participate in the growth story of Chinese companies. When the Ang Moh return from their rescue mission, they will furiously snap up these S-shares with good earnings.
Good luck my friends and have a blessed holiday break!
Sunday, 9 December 2007
Transactions of Virtual Fund
Switching of counters:
Sold:
Courage Marine 100,000 @ $0.41 = $41,000 Loss = -$6,500
KS Energy 20,000 @ $3.26 = $65,200 Loss = -$10,800
Bought:
Sino Techfibre 50,000 @$1.11 = $55,500
STX Pan Ocean 17,000 @ $2.93 = $49,810
Sum invested = $629,710
Cash holding = $1,740
Realised profit = $131,450 = 26.29%
Sold:
Courage Marine 100,000 @ $0.41 = $41,000 Loss = -$6,500
KS Energy 20,000 @ $3.26 = $65,200 Loss = -$10,800
Bought:
Sino Techfibre 50,000 @$1.11 = $55,500
STX Pan Ocean 17,000 @ $2.93 = $49,810
Sum invested = $629,710
Cash holding = $1,740
Realised profit = $131,450 = 26.29%
Thursday, 6 December 2007
Monday, 3 December 2007
Sihuan Acquires New Subsidiary
Sihuan Pharmaceutical Holdings Group Ltd. (the "Company") wishes to announce that the Company has acquired a new wholly-owned subsidiary, SUN MORAL INTERNATIONAL (HK) LIMITED (the Sun Moral) in Hong Kong, The People's Republic of China (hereinafter referred to as Acquisition) with a share capital of 1(One) share of HK$1 each on 23rd November 2007.
Sun Moral would be an investment holding company. Following the aforesaid Acquisition, the Company's entire shareholdings in HAINAN SIHUAN PHARMACEUTICAL CO., LTD will be transferred to Sun Moral (hereinafter referred to as the Proposed Transfer).
The above Acquisition was funded by internal resources and is not expected to have any material impact on the earnings per share and net tangible assets per share of the Group for the financial year ending 31 December 2007. A leading pharmaceutical company in the field of cardiocerebral vascular drugs in the PRC, Sihuan Pharmaceutical Holdings Group Ltd focuses on the research and development (R&D), production as well as sales and marketing of cardiocerebral vascular (CV) and noncardiocerebral vascular (NCV) drugs in different forms and dosages.
Sun Moral would be an investment holding company. Following the aforesaid Acquisition, the Company's entire shareholdings in HAINAN SIHUAN PHARMACEUTICAL CO., LTD will be transferred to Sun Moral (hereinafter referred to as the Proposed Transfer).
The above Acquisition was funded by internal resources and is not expected to have any material impact on the earnings per share and net tangible assets per share of the Group for the financial year ending 31 December 2007. A leading pharmaceutical company in the field of cardiocerebral vascular drugs in the PRC, Sihuan Pharmaceutical Holdings Group Ltd focuses on the research and development (R&D), production as well as sales and marketing of cardiocerebral vascular (CV) and noncardiocerebral vascular (NCV) drugs in different forms and dosages.
China Energy to triple its production capacity
Rising PRC energy consumption propels China Energy on US$443 million expansion plans
· Triple Methanol production capacity from existing 250,000 metric tons per annum (“mtpa”) to 750,000 mtpa by end 2008
· Increase in internal Methanol production to enhance operating margins and mitigate future price volatility from external Methanol sources
· DME capacity expansion plans to progress in tandem with internal Methanol production growth to enhance profitability
· Total planned DME capacity of 3.6 million mtpa by end 2009, up from initial target of 3.2 million mtpa
· Triple Methanol production capacity from existing 250,000 metric tons per annum (“mtpa”) to 750,000 mtpa by end 2008
· Increase in internal Methanol production to enhance operating margins and mitigate future price volatility from external Methanol sources
· DME capacity expansion plans to progress in tandem with internal Methanol production growth to enhance profitability
· Total planned DME capacity of 3.6 million mtpa by end 2009, up from initial target of 3.2 million mtpa
Friday, 30 November 2007
Own portfolio as at end of Nov 2007
Latest Holdings:
Cash
China Fishery (Bought additional shares)
China Energy
ChinaHongxing
ChinaWheel (Bought additional shares)
ChinaXLX (Bought additional shares)
Jiutian Chemical (Bought additional shares)
Sihuan
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
The last 2 weeks was good as I took advantage of the weak market sentiments to add position of some of my holdings. Over the past fortnight, some substantial shareholders and directors also bought shares in companies they felt undervalued or have been oversold. Some of them are:
ChinaHongxing
China Fishery
Jiutian
China XLX
My next round of buying will be 20% lower of current prices. I may continue to buy more if I see value emerging and more importantly the fundamental of the companies must not deteriorate. On one hand I hope that the current downfall can continue for a little longer but I also fear the negative sentiments that it brings. Already, my boss and colleagues are painting very glum picture with US recession on the horizon and China bubbles to burst. If this negative feeling persists, it can only bring more harm to the economy and affecting our daily lives adversely. Some naive ones feel that as long as they stay away from the share market, they can be immunised and spared. But from my experience, when the bosses don't feel good, they will hold back pay rises and look to cut costs here and there and that eventually will affect you and I. So like it or not, we better pray that the market recovers sooner than later!
Cash
China Fishery (Bought additional shares)
China Energy
ChinaHongxing
ChinaWheel (Bought additional shares)
ChinaXLX (Bought additional shares)
Jiutian Chemical (Bought additional shares)
Sihuan
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
The last 2 weeks was good as I took advantage of the weak market sentiments to add position of some of my holdings. Over the past fortnight, some substantial shareholders and directors also bought shares in companies they felt undervalued or have been oversold. Some of them are:
ChinaHongxing
China Fishery
Jiutian
China XLX
My next round of buying will be 20% lower of current prices. I may continue to buy more if I see value emerging and more importantly the fundamental of the companies must not deteriorate. On one hand I hope that the current downfall can continue for a little longer but I also fear the negative sentiments that it brings. Already, my boss and colleagues are painting very glum picture with US recession on the horizon and China bubbles to burst. If this negative feeling persists, it can only bring more harm to the economy and affecting our daily lives adversely. Some naive ones feel that as long as they stay away from the share market, they can be immunised and spared. But from my experience, when the bosses don't feel good, they will hold back pay rises and look to cut costs here and there and that eventually will affect you and I. So like it or not, we better pray that the market recovers sooner than later!
Performance of Virtual Fund ~ End Nov 2007
Sum invested = $647,900
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$95,945 = -19.19%
Latest Holdings:
China Fishery -$3,400
ChinaHongxing -$53,245
Courage Marine -$8,000
Fibrechem +$2,000
KS Energy -$10,400
Raffles Education +$2,100
Sihuan +$2,000
STX Pan Ocean -$27,000
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$95,945 = -19.19%
Latest Holdings:
China Fishery -$3,400
ChinaHongxing -$53,245
Courage Marine -$8,000
Fibrechem +$2,000
KS Energy -$10,400
Raffles Education +$2,100
Sihuan +$2,000
STX Pan Ocean -$27,000
Tuesday, 20 November 2007
Hot Response To ChinaHongxing's Share Placement
DMG Research - Hot response to Hongxing share placement
Despite volatile market conditions and the prospect of earnings dilution on a per share basis, listed China-based shoemaker China Hongxing Sports has received unexpectedly strong response to its $472 million share placement. All 400 million new Hongxing shares have been snapped up largely by institutional buyers. China Hongxing said last week that the placement at $1.18 a share was a 5.14 per cent discount to the weighted average price of $1.2439 on Nov 14.
The stock fell 25 cents yesterday to close at $1. Listed here in late 2005, the Fujian-based sports footwear and accessories specialist is one of the top three players in China, with over 3,000 stores across the country - just behind its Hong Kong-listed rival, Lining, which has 5,000 stores.
The placement was done primarily to fund its aggressive brand-building across China in the lead-up to the 2008 Summer Olympics in Beijing next year. Some $330 million of the estimated net proceeds of $458 million, will go towards the company's expansion of its sales & distribution network, advertisement & promotion, and renovation and upgrading of older stores. The balance will be used to set up four logistic centres, for production capacity expansion and for general working capital.
While noting that FY08/09 earnings per share will be diluted by about 15 per cent by the placement, analysts nevertheless note that this brand-building and profile-raising exercise is critical for long-term sustained growth in a highly competitive Chinese market, where over a dozen players compete tenaciously, often with their stores sitting next to each other on main streets of cities across the country. Although downgrading the price target to $1.32 (from $1.48), Kim Eng noted that China Hongxing's revenue would increase by one to 3 per cent. 'We have also increased gross margin assumptions to reflect lower outsourcing costs,' it said in a note yesterday. 'We continue to like Hongxing as a key beneficiary of the Olympics and China's rising consumption spending.'
About $195 million of the placement funds will be used to secure prime 100-200 sq m stores, which require 24 months of rent as deposit. Hongxing's strategy has been to offer financial assistance to its distributors to fund this rental advance, and collect the money back over the second and third year, to be re-deployed for opening newer tores. China Hongxing, which is fast expanding its sales and distribution network, is also upgrading its older stores to reflect a younger and more dynamic brand image. And with TV stations already demanding huge upfront payments for air-time in the lead up to the Olympics, a portion of the funds raised is also being set aside for a media blitz.
Recently, the group posted a more than doubling in third quarter net profit to 91 million yuan (S$17.8 million), thanks to stronger margins, higher sales and better product mix. Net earnings for the first nine months also more than doubled to 260 million yuan.
Despite volatile market conditions and the prospect of earnings dilution on a per share basis, listed China-based shoemaker China Hongxing Sports has received unexpectedly strong response to its $472 million share placement. All 400 million new Hongxing shares have been snapped up largely by institutional buyers. China Hongxing said last week that the placement at $1.18 a share was a 5.14 per cent discount to the weighted average price of $1.2439 on Nov 14.
The stock fell 25 cents yesterday to close at $1. Listed here in late 2005, the Fujian-based sports footwear and accessories specialist is one of the top three players in China, with over 3,000 stores across the country - just behind its Hong Kong-listed rival, Lining, which has 5,000 stores.
The placement was done primarily to fund its aggressive brand-building across China in the lead-up to the 2008 Summer Olympics in Beijing next year. Some $330 million of the estimated net proceeds of $458 million, will go towards the company's expansion of its sales & distribution network, advertisement & promotion, and renovation and upgrading of older stores. The balance will be used to set up four logistic centres, for production capacity expansion and for general working capital.
While noting that FY08/09 earnings per share will be diluted by about 15 per cent by the placement, analysts nevertheless note that this brand-building and profile-raising exercise is critical for long-term sustained growth in a highly competitive Chinese market, where over a dozen players compete tenaciously, often with their stores sitting next to each other on main streets of cities across the country. Although downgrading the price target to $1.32 (from $1.48), Kim Eng noted that China Hongxing's revenue would increase by one to 3 per cent. 'We have also increased gross margin assumptions to reflect lower outsourcing costs,' it said in a note yesterday. 'We continue to like Hongxing as a key beneficiary of the Olympics and China's rising consumption spending.'
About $195 million of the placement funds will be used to secure prime 100-200 sq m stores, which require 24 months of rent as deposit. Hongxing's strategy has been to offer financial assistance to its distributors to fund this rental advance, and collect the money back over the second and third year, to be re-deployed for opening newer tores. China Hongxing, which is fast expanding its sales and distribution network, is also upgrading its older stores to reflect a younger and more dynamic brand image. And with TV stations already demanding huge upfront payments for air-time in the lead up to the Olympics, a portion of the funds raised is also being set aside for a media blitz.
Recently, the group posted a more than doubling in third quarter net profit to 91 million yuan (S$17.8 million), thanks to stronger margins, higher sales and better product mix. Net earnings for the first nine months also more than doubled to 260 million yuan.
Friday, 16 November 2007
Performance of Virtual Fund
Sum invested = $647,900
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$19,800 = -3.96%
It has been a disappointing week in general. Some companies have reported excellent Q3 results but the weaker market sentiments sent the share prices lower and lower. I would advise investors to stay away from the current market. Have a systematic plan to average down if your invested companies have performed well fundamentally. Keep yourself busy and avoid looking at the hourly price fluctuations. Come back in few months time and things may be better by then. For those who favour S-shares like me, stay positive. I still believe the foreign funds will come here to buy up sooner or later. Many counters have lost the support they used to enjoy because the foreign fund managers have enough problems themselves. Many are forced to realise their gains to cover their sub-prime losses. Sounds familiar right?
Some investors have not been paying attention to the latest set of numbers and continue to average down prices blindly. I would advise them to average down wisely. Take for example Pine Agritech. The fundamental of the Company has somewhat changed with weaker sales and lower profit margin. Pine appeared to be so solid just few months back with the aggresive expansion plan but also had to succumb to slower growth in its biz, at least in the short run. The rising costs have been a major concern for many companies and this is becoming even more obvious in the latest financial reports.
As for ChinaHongxing, it would appear very crazy to have placed out 400 million shares! This can be a significant IPO on its own. Investors maybe in for disappointment in the short run due to the share dilution. The 2 days trading halt also did not reflect well on the company's dealing practices and transparency. Many punters were caught off-guarded. On the brighter side, this share placement exercise would mean the Company now has the war chest to move up one level and may even be capable of acquiring the smaller players. In the retail sector, the ability to expand with bigger retail areas at quicker pace can really win the race to be the key player in the market.
STX Pan Ocean. I bought some to test the water. The Company has mentioned officially that it is working with the respective exchanges to allow migration of shares between SGX and Korean Stock Exchange. If the plan materialises in Q1 2008, there will be price arbitrage opportunity if the price gap between the two exchanges continue to persist. Currently it is trading at above S$6 in Korea! On the merit of its Q3 results, the valuation appear undemanding and the future prospects look promising with BDI staying firm.
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$19,800 = -3.96%
It has been a disappointing week in general. Some companies have reported excellent Q3 results but the weaker market sentiments sent the share prices lower and lower. I would advise investors to stay away from the current market. Have a systematic plan to average down if your invested companies have performed well fundamentally. Keep yourself busy and avoid looking at the hourly price fluctuations. Come back in few months time and things may be better by then. For those who favour S-shares like me, stay positive. I still believe the foreign funds will come here to buy up sooner or later. Many counters have lost the support they used to enjoy because the foreign fund managers have enough problems themselves. Many are forced to realise their gains to cover their sub-prime losses. Sounds familiar right?
Some investors have not been paying attention to the latest set of numbers and continue to average down prices blindly. I would advise them to average down wisely. Take for example Pine Agritech. The fundamental of the Company has somewhat changed with weaker sales and lower profit margin. Pine appeared to be so solid just few months back with the aggresive expansion plan but also had to succumb to slower growth in its biz, at least in the short run. The rising costs have been a major concern for many companies and this is becoming even more obvious in the latest financial reports.
As for ChinaHongxing, it would appear very crazy to have placed out 400 million shares! This can be a significant IPO on its own. Investors maybe in for disappointment in the short run due to the share dilution. The 2 days trading halt also did not reflect well on the company's dealing practices and transparency. Many punters were caught off-guarded. On the brighter side, this share placement exercise would mean the Company now has the war chest to move up one level and may even be capable of acquiring the smaller players. In the retail sector, the ability to expand with bigger retail areas at quicker pace can really win the race to be the key player in the market.
STX Pan Ocean. I bought some to test the water. The Company has mentioned officially that it is working with the respective exchanges to allow migration of shares between SGX and Korean Stock Exchange. If the plan materialises in Q1 2008, there will be price arbitrage opportunity if the price gap between the two exchanges continue to persist. Currently it is trading at above S$6 in Korea! On the merit of its Q3 results, the valuation appear undemanding and the future prospects look promising with BDI staying firm.
Thursday, 15 November 2007
China Hongxing
NEWS RELEASE
CHINA HONGXING REGISTERS NET PROFIT SURGE OF 136.7% IN 3Q FY2007 TO RMB90.9 MILLION
* Turnover rose 59.2% to RMB478.5 million as a result of higher product sales across the board underpinned by successful advertising and promotion efforts
* Gross profit margin improved from 38.6% in 3Q FY2006 to 43.8% in 3Q FY2007
on the back of higher selling prices, changes in product mix and greater economies of scale
* Net profit climbed 136.7% to RMB90.9 million lifted by higher turnover
Singapore, 14 November 2007 – China Hongxing Sports Limited
China Hongxing, one of the leading sporting goods companies in the PRC, today reported commendable results for the quarter ended 30 September, 2007 (“3Q FY2007”).
Group turnover soared 59.2% from RMB300.6 million in 3Q FY2006 to RMB478.5 million in 3Q FY2007, while net profit surged 136.7% to RMB90.9 million over the same period. Driven by its sustained efforts in advertising and promotion activities in boosting the Erke brand image and its relentless efforts to augment its presence in the PRC through accelerating sales network expansion rate, the Group continued to achieve an outstanding set of results this quarter. The results reflect a strong appetite for its products across the PRC that has underpinned higher prices and strong sales volumes.
CHINA HONGXING REGISTERS NET PROFIT SURGE OF 136.7% IN 3Q FY2007 TO RMB90.9 MILLION
* Turnover rose 59.2% to RMB478.5 million as a result of higher product sales across the board underpinned by successful advertising and promotion efforts
* Gross profit margin improved from 38.6% in 3Q FY2006 to 43.8% in 3Q FY2007
on the back of higher selling prices, changes in product mix and greater economies of scale
* Net profit climbed 136.7% to RMB90.9 million lifted by higher turnover
Singapore, 14 November 2007 – China Hongxing Sports Limited
China Hongxing, one of the leading sporting goods companies in the PRC, today reported commendable results for the quarter ended 30 September, 2007 (“3Q FY2007”).
Group turnover soared 59.2% from RMB300.6 million in 3Q FY2006 to RMB478.5 million in 3Q FY2007, while net profit surged 136.7% to RMB90.9 million over the same period. Driven by its sustained efforts in advertising and promotion activities in boosting the Erke brand image and its relentless efforts to augment its presence in the PRC through accelerating sales network expansion rate, the Group continued to achieve an outstanding set of results this quarter. The results reflect a strong appetite for its products across the PRC that has underpinned higher prices and strong sales volumes.
Wednesday, 14 November 2007
Performance of Virtual Fund
Sum invested = $647,900
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$1,850 = -0.4%
Cash holding = $850
Realised profit = $148,750 = 29.7%
Unrealised Loss = -$1,850 = -0.4%
China Wheel - by Phillip Securities Research
A strong set of interim results
14 November 2007
3Q FY07 results review.
China Wheel Holdings (“CWH”) recorded a flat growth in 3Q FY07, as its factory utilization rate reached 98.8%. CWH’s net profit increased 7.9% YoY to RMB 25.9 million in 3Q FY07, on the back of sales growth of 11.4% to RMB 226.9 million. Gross profit increased 6.1% YoY to RMB 38.1 million. The slight dip in GP margin was due to 1) RMB appreciation which affected export
segment’s margin; 2) the Group’s provision of rebates for some promising distributors; 3) the adjustment of staff salaries. Expenses are in line with sales growth.
In 9M FY07, CWH’s net profit grew 49.3% to RMB 80.7 million and sales grew 22.1% to RMB 673 million. Receivables and Payables both increased with sales growth, and remain in healthy range. Gearing went up to 1.9 mainly due to the issue of convertible bonds in August. CWH also achieved positive cash flow of RMB 42 million in 9M FY07.
Growth driven by newly built Tianjin plant.
The phase I of Tianjin plant is on track, and will start commercial production in the beginning of 2008. CWH also formed a joint venture company Tianjin Diastal Wheel Manufacturing with Qinhuangdao Discastal (10% of JV) and Macau Ruizhi (10% of JV). Tianjin Dicastal will operate the 2 million wheels of the new Tianjin plant (Phase I only). As Qihuangdao Discastal is a qualified OEM supplier to the Toyota car plant in Tianjin and Macau Ruizhi is an established distributor of wheels to various Japanese car plants in Guangzhou and other regions, the management of CWH is very confident to capitalize on their partners’ expertise and accelerate the new plant’s utilization rate to 100% by 3Q FY08.
Maintain BUY and Fair Value Estimate of S$1.36.
We have revised our forecasts slightly by adjusting up the FY07 and FY08’s earnings (RMB 4 million and RMB 3.5 million respectively) but adjusted down FY09 earnings (RMB 8 million). CWH remains an appealing proxy to China’s booming auto sector. We maintain our BUY recommendation and Fair Value Estimate of S$1.36, based on the same relative valuation of 12x FY08 PER.
14 November 2007
3Q FY07 results review.
China Wheel Holdings (“CWH”) recorded a flat growth in 3Q FY07, as its factory utilization rate reached 98.8%. CWH’s net profit increased 7.9% YoY to RMB 25.9 million in 3Q FY07, on the back of sales growth of 11.4% to RMB 226.9 million. Gross profit increased 6.1% YoY to RMB 38.1 million. The slight dip in GP margin was due to 1) RMB appreciation which affected export
segment’s margin; 2) the Group’s provision of rebates for some promising distributors; 3) the adjustment of staff salaries. Expenses are in line with sales growth.
In 9M FY07, CWH’s net profit grew 49.3% to RMB 80.7 million and sales grew 22.1% to RMB 673 million. Receivables and Payables both increased with sales growth, and remain in healthy range. Gearing went up to 1.9 mainly due to the issue of convertible bonds in August. CWH also achieved positive cash flow of RMB 42 million in 9M FY07.
Growth driven by newly built Tianjin plant.
The phase I of Tianjin plant is on track, and will start commercial production in the beginning of 2008. CWH also formed a joint venture company Tianjin Diastal Wheel Manufacturing with Qinhuangdao Discastal (10% of JV) and Macau Ruizhi (10% of JV). Tianjin Dicastal will operate the 2 million wheels of the new Tianjin plant (Phase I only). As Qihuangdao Discastal is a qualified OEM supplier to the Toyota car plant in Tianjin and Macau Ruizhi is an established distributor of wheels to various Japanese car plants in Guangzhou and other regions, the management of CWH is very confident to capitalize on their partners’ expertise and accelerate the new plant’s utilization rate to 100% by 3Q FY08.
Maintain BUY and Fair Value Estimate of S$1.36.
We have revised our forecasts slightly by adjusting up the FY07 and FY08’s earnings (RMB 4 million and RMB 3.5 million respectively) but adjusted down FY09 earnings (RMB 8 million). CWH remains an appealing proxy to China’s booming auto sector. We maintain our BUY recommendation and Fair Value Estimate of S$1.36, based on the same relative valuation of 12x FY08 PER.
China Fishery
CHINA FISHERY EXTENDS STRONG GROWTH INTO FY2007 THIRD QUARTER RESULTS
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_5B693D5275784AA64825739300289EF0/$file/CFGL-3Q07-PressRelease.pdf?openelement
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_5B693D5275784AA64825739300289EF0/$file/CFGL-3Q07-PressRelease.pdf?openelement
Transactions of My Portfolio and Latest Holding
Bought:
STX Pan Ocean
China Fishery
Sold:
Abterra
C&G Industrial
ChinaSunshine
Foreland
Pine Agritech
Latest Holdings:
Cash
China Fishery
China Energy
ChinaHongxing
ChinaWheel
ChinaXLX
Jiutian Chemical
Sihuan
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
STX Pan Ocean
China Fishery
Sold:
Abterra
C&G Industrial
ChinaSunshine
Foreland
Pine Agritech
Latest Holdings:
Cash
China Fishery
China Energy
ChinaHongxing
ChinaWheel
ChinaXLX
Jiutian Chemical
Sihuan
STX Pan Ocean
CPF
Asia Enterprise
Midas
Raffles Education
Transactions of Virtual Fund
Transactions for today:
Bought:
ChinaHongxing 50,000 @ $1.24 = $62,000
STX Pan Ocean 50,000 @ $3.68 = $184,000
China Fishery 20,000 @ $1.75 = $35,000
Raffles Education 15,000 @ $3.06 = $45,900
Sold:
Midas 20,000 @ $1.55 Cost = $1.41, Realised Profit = $2,800
Sum invested = $647,900
Cash holding = $850
Bought:
ChinaHongxing 50,000 @ $1.24 = $62,000
STX Pan Ocean 50,000 @ $3.68 = $184,000
China Fishery 20,000 @ $1.75 = $35,000
Raffles Education 15,000 @ $3.06 = $45,900
Sold:
Midas 20,000 @ $1.55 Cost = $1.41, Realised Profit = $2,800
Sum invested = $647,900
Cash holding = $850
Tuesday, 13 November 2007
Performance of Virtual Fund
Sum invested = $349,200
Cash holding = $296,749
Realised profit = $145,949 = 29.2%
Unrealised Loss = -$9,230 = -1.8%
Cash holding = $296,749
Realised profit = $145,949 = 29.2%
Unrealised Loss = -$9,230 = -1.8%
Monday, 12 November 2007
Performance of Virtual Fund
Sum invested = $349,200
Cash holding = $296,749
Realised profit = $145,949 = 29.2%
Unrealised Loss = -$14,890 = -3%
Cash holding = $296,749
Realised profit = $145,949 = 29.2%
Unrealised Loss = -$14,890 = -3%
Virtual Fund Transactions
Sold:
Golden Agri 50,000 @ $2.20 Cost $1.81 Realised Profit = $19,500
Jiutian Warrant 200,000 @ $0.18 Cost $0.15375 Realised Profit = $5,250
Pine Agritech 100,000 @ $0.41 Cost $0.515 Realised loss = -$10,500
Total Realised Profit = $14,250
Golden Agri 50,000 @ $2.20 Cost $1.81 Realised Profit = $19,500
Jiutian Warrant 200,000 @ $0.18 Cost $0.15375 Realised Profit = $5,250
Pine Agritech 100,000 @ $0.41 Cost $0.515 Realised loss = -$10,500
Total Realised Profit = $14,250
Sunday, 11 November 2007
Saturday, 10 November 2007
The Value/Growth Debate
Who dares wins: the value/growth debate
Numerous studies have shown that over long periods, value investing outperforms growth investing on average but value stocks today are starting to look overpriced
By TEH HOOI LING SENIOR CORRESPONDENT
Growth stocks have never been this cheap before. Value investors generally look for 'out-of-favour' companies. They look for discounts and seek stocks with relatively low price-earnings multiples.
Growth investors, on the other hand, look for fast earnings growth and are willing to pay a premium for it. So the stocks they buy into - in the hope of getting exposure to new products, innovation and a big increase in the share price - tend to trade at higher PE ratios.
However, numerous studies have shown that over long periods, value investing outperforms growth investing on average. The problem with growth investing is that forecasts for exciting companies tend to be over-optimistic. Too much of the future has been built into their share price. So any disappointment sends that price crashing.
But when it comes to value companies, investors tend to be too pessimistic. So even the slightest improvement boosts their share price.
As globalisation deepens, the boom and bust cycle will become less pronounced. And in this more stable environment, companies that are better able to plan and execute their growth strategies will be the big winners.
Mr Pang says that the way to do growth investing is to look for companies that can sustain their earnings growth faster than the market thinks. This will lead to stock price outperformance.
'What hurts growth investors the most is when they stay too long in the stock,' he says. 'As soon as our expectations become close to market consensus, we start to trim our position and get out of the growth trap.'
Small gap
According to him, with investors flocking to value stocks and eschewing growth stocks for the past few years, we have reached a point where 'there is very little value to wring out of value companies but there is a lot of value to be found in growth companies'.
The price gap between growth and value - based on various metrics such as price-to-sales, price-to-book, price-to-cash earnings and price-to-forecast earnings - has never been so small, he says.
And when one looks at the price-to-cash flow of large-cap growth and value stocks, there isn't much difference either. 'This doesn't make sense. You are getting high growth for free. This can't persist,' says Mr Pang.
'There's been compression of valuation. Growth has become cheaper and value more expensive,' says Mr Pang.
Timing tricky
As global growth slackens and more companies begin to disappoint, investors will value growth more as it becomes more scarce, he says. 'These cycles typically last two to three years, and during these periods there will be substantial outperformance.'
The tricky part is the timing: when will investors start to appreciate growth? If the global economy continues to steam along and there is plenty of growth to go around, growth companies may not see much of a premium rating.
Indeed, investors should not ignore growth stocks. Just having one and riding with it can do wonders for a portfolio. And you need not look far for a growth company. On the Singapore Exchange, $10,000 invested in Cosco five years ago is worth $1.1 million today.
The same amount invested in Raffles Education during its IPO in January 2002 is also worth about that sum today. It's worth more if you reinvested the dividends back into the stock. The same amount invested in Google just two years ago is now worth $73,000.
Of course, you have to be vigilant when it comes to growth investing. As Mr Pang says, the biggest risk is over-staying. But one stock like Cosco or Raffles Education will make up for the many that will disappoint.
The writer is a CFA charterholder. She can be reached at hooiling@sph.com.sg
Numerous studies have shown that over long periods, value investing outperforms growth investing on average but value stocks today are starting to look overpriced
By TEH HOOI LING SENIOR CORRESPONDENT
Growth stocks have never been this cheap before. Value investors generally look for 'out-of-favour' companies. They look for discounts and seek stocks with relatively low price-earnings multiples.
Growth investors, on the other hand, look for fast earnings growth and are willing to pay a premium for it. So the stocks they buy into - in the hope of getting exposure to new products, innovation and a big increase in the share price - tend to trade at higher PE ratios.
However, numerous studies have shown that over long periods, value investing outperforms growth investing on average. The problem with growth investing is that forecasts for exciting companies tend to be over-optimistic. Too much of the future has been built into their share price. So any disappointment sends that price crashing.
But when it comes to value companies, investors tend to be too pessimistic. So even the slightest improvement boosts their share price.
As globalisation deepens, the boom and bust cycle will become less pronounced. And in this more stable environment, companies that are better able to plan and execute their growth strategies will be the big winners.
Mr Pang says that the way to do growth investing is to look for companies that can sustain their earnings growth faster than the market thinks. This will lead to stock price outperformance.
'What hurts growth investors the most is when they stay too long in the stock,' he says. 'As soon as our expectations become close to market consensus, we start to trim our position and get out of the growth trap.'
Small gap
According to him, with investors flocking to value stocks and eschewing growth stocks for the past few years, we have reached a point where 'there is very little value to wring out of value companies but there is a lot of value to be found in growth companies'.
The price gap between growth and value - based on various metrics such as price-to-sales, price-to-book, price-to-cash earnings and price-to-forecast earnings - has never been so small, he says.
And when one looks at the price-to-cash flow of large-cap growth and value stocks, there isn't much difference either. 'This doesn't make sense. You are getting high growth for free. This can't persist,' says Mr Pang.
'There's been compression of valuation. Growth has become cheaper and value more expensive,' says Mr Pang.
Timing tricky
As global growth slackens and more companies begin to disappoint, investors will value growth more as it becomes more scarce, he says. 'These cycles typically last two to three years, and during these periods there will be substantial outperformance.'
The tricky part is the timing: when will investors start to appreciate growth? If the global economy continues to steam along and there is plenty of growth to go around, growth companies may not see much of a premium rating.
Indeed, investors should not ignore growth stocks. Just having one and riding with it can do wonders for a portfolio. And you need not look far for a growth company. On the Singapore Exchange, $10,000 invested in Cosco five years ago is worth $1.1 million today.
The same amount invested in Raffles Education during its IPO in January 2002 is also worth about that sum today. It's worth more if you reinvested the dividends back into the stock. The same amount invested in Google just two years ago is now worth $73,000.
Of course, you have to be vigilant when it comes to growth investing. As Mr Pang says, the biggest risk is over-staying. But one stock like Cosco or Raffles Education will make up for the many that will disappoint.
The writer is a CFA charterholder. She can be reached at hooiling@sph.com.sg
Friday, 9 November 2007
Performance of Virtual Fund
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $23,020 = 4.60%
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $23,020 = 4.60%
Wednesday, 7 November 2007
Raffles Education Q1 Result
NEWS RELEASE FOR FY2008 Q1 RESULTS ANNOUNCEMENT
RAFFLESEDUCATIONCORP CONTINUES GROWTH MOMENTUM
- Net Profit increased by 65% to S$15.9 million
- Revenue increased 45% to $39.1 million
- Earnings per share up 42% to 1.31 Singapore cents
- Declared Q1 dividend of 1.3 Singapore cents per share
RAFFLESEDUCATIONCORP CONTINUES GROWTH MOMENTUM
- Net Profit increased by 65% to S$15.9 million
- Revenue increased 45% to $39.1 million
- Earnings per share up 42% to 1.31 Singapore cents
- Declared Q1 dividend of 1.3 Singapore cents per share
Performance of Virtual Fund
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $26,060 = 5.21%
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $26,060 = 5.21%
Tuesday, 6 November 2007
Sihuan
* Strong demand and improved margins lift Sihuan’s 3Q07 net profit by 122% to RMB43.5M.
*3Q07 sales growth of 83% driven mainly by cardiocerebral vascular (CV) drugs Kelinao and Chuanqing
* New CV product Anjieli continues to gain market share
* Expects pipeline of new drugs to come onstream in next 12 months to drive medium term growth
Singapore, 6 November 2007 – Mainboard-listed Sihuan Pharmaceutical Holdings Group Ltd (四环医药控股集团有限公司or “Sihuan”), a leading manufacturer of cardiocerebral vascular (CV) drugs in the PRC, reported a sterling set of results for the quarter ended 30 September 2007 (3Q07) due to improved profitability and wider acceptance of its products, especially Kelinao, Chuanqing and Anjieli, a new drug introduced only in 2Q07.
These three CV drugs largely lifted Group 3Q07 net profit attributable (PATMI) by 122% year-on-year (yoy) to RMB43.5 million on 83% higher sales of RMB71.7 million. With 570 more distributors covering 3,520 hospitals, sales of Kelinao and Chuanqing doubled to RMB55.1 million in 3Q07. In 3Q06, 980 distributors helped Sihuan reach 2,800 hospitals in 30 provinces, autonomous regions and municipalities in China. Sales of Anjieli rose 69% to RMB6.1 million in 3Q07 from 2Q07’s RMB3.6 million. “Although Kelinao remains a strong contributor to our bottomline, we are very encouraged by the strong take-up of Anjieli which was introduced only a few months ago,” said Dr Che Fengsheng (车冯升), Sihuan’s Executive Chairman and CEO.
*3Q07 sales growth of 83% driven mainly by cardiocerebral vascular (CV) drugs Kelinao and Chuanqing
* New CV product Anjieli continues to gain market share
* Expects pipeline of new drugs to come onstream in next 12 months to drive medium term growth
Singapore, 6 November 2007 – Mainboard-listed Sihuan Pharmaceutical Holdings Group Ltd (四环医药控股集团有限公司or “Sihuan”), a leading manufacturer of cardiocerebral vascular (CV) drugs in the PRC, reported a sterling set of results for the quarter ended 30 September 2007 (3Q07) due to improved profitability and wider acceptance of its products, especially Kelinao, Chuanqing and Anjieli, a new drug introduced only in 2Q07.
These three CV drugs largely lifted Group 3Q07 net profit attributable (PATMI) by 122% year-on-year (yoy) to RMB43.5 million on 83% higher sales of RMB71.7 million. With 570 more distributors covering 3,520 hospitals, sales of Kelinao and Chuanqing doubled to RMB55.1 million in 3Q07. In 3Q06, 980 distributors helped Sihuan reach 2,800 hospitals in 30 provinces, autonomous regions and municipalities in China. Sales of Anjieli rose 69% to RMB6.1 million in 3Q07 from 2Q07’s RMB3.6 million. “Although Kelinao remains a strong contributor to our bottomline, we are very encouraged by the strong take-up of Anjieli which was introduced only a few months ago,” said Dr Che Fengsheng (车冯升), Sihuan’s Executive Chairman and CEO.
Performance of Virtual Fund
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $27,790 = 5.56%
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $27,790 = 5.56%
Monday, 5 November 2007
Own transactions and latest portfolio
Bought:
Foreland @ $0.53
ChinaSunshine @ $0.31
Latest Holdings:
Cash
C&G Industrial
China Energy
ChinaHongxing
ChinaSunShine
ChinaWheel
ChinaXLX
Foreland
Jiutian Chemical
Pine Agritech
Sihuan
CPF
Asia Enterprise
Midas
Raffles Education
The general weakness in the market today has triggered me to pick up some counters which I feel are relatively cheap. I disposed of Foreland at S$0.55 some weeks ago and I bought it back at a cheaper price today.
I think there are enough counters in my portfolio at the moment. The next stage I look to increase my holdings in individual counters to strengthen the overall investment value and to capitalise on any price weakness.
Some ask why i like China companies so much that my portfolio consist of 100% S-shares (Cash portion). Well, China has become a major force in the financial world. With the listing of PertoChina today, China has got 5 of the 10 biggest companies in the world! I believe its a matter of time that China would replace US as the largest financial market. That should bode well for people living in this part of the world. As I type, how many of you are staying up to look at US for market direction? How I wish such sleepless nites would be over soon.
I have some analyst friends who never like a thing "China". They don't look like AngMoh but they will shun anything Chinese. Surprisingly they do speak good Mandarin. They say they would never want to travel to China as the toilets are not up to their hygiene standards. They don't take a second look at Chinese women as they do not have good image here....
What can I say? We all are entitled to our own opinions and have our preferences. They do not know what they are missing. Look at Cosco, it has been the best STI stock this year. Many S-shares in my portfolio have proven themselves. Jiutian, ChinaHongxing and Pine have all increased their values by more than 5 times since listing in a relatively short period of time.
Speaking of corporate governance, I think there are more troubled local companies than the Chinese counterparts. The biz practice in China has always been seen in a negative way. I firmly believe that many of these Chinese companies have performed even better in terms of governance rankings vis-a-vis local firms. Many of their CFO and CEO have studied MBA and they are maybe even more advanced in their managerial skills than we ever realise. Even the shrewdest Warren Buffet once invested in PetroChina but too bad he didnt have the nerves to hold on to it. Otherwise, his wealth could have increased very significantly with the strong debut today.
I know whatever I say I can never change some people's mindsets. Well, at the end of the day, what matters really is whether you made money from your investment. There is no one winning formula in share investment. Had you chosen to buy the biggest losers of last year at the beginning of the year, you would have been sitting on profit of >400% so far. The portfolio may not look sexy but what the heck, who cares, as long as you made money!
Foreland @ $0.53
ChinaSunshine @ $0.31
Latest Holdings:
Cash
C&G Industrial
China Energy
ChinaHongxing
ChinaSunShine
ChinaWheel
ChinaXLX
Foreland
Jiutian Chemical
Pine Agritech
Sihuan
CPF
Asia Enterprise
Midas
Raffles Education
The general weakness in the market today has triggered me to pick up some counters which I feel are relatively cheap. I disposed of Foreland at S$0.55 some weeks ago and I bought it back at a cheaper price today.
I think there are enough counters in my portfolio at the moment. The next stage I look to increase my holdings in individual counters to strengthen the overall investment value and to capitalise on any price weakness.
Some ask why i like China companies so much that my portfolio consist of 100% S-shares (Cash portion). Well, China has become a major force in the financial world. With the listing of PertoChina today, China has got 5 of the 10 biggest companies in the world! I believe its a matter of time that China would replace US as the largest financial market. That should bode well for people living in this part of the world. As I type, how many of you are staying up to look at US for market direction? How I wish such sleepless nites would be over soon.
I have some analyst friends who never like a thing "China". They don't look like AngMoh but they will shun anything Chinese. Surprisingly they do speak good Mandarin. They say they would never want to travel to China as the toilets are not up to their hygiene standards. They don't take a second look at Chinese women as they do not have good image here....
What can I say? We all are entitled to our own opinions and have our preferences. They do not know what they are missing. Look at Cosco, it has been the best STI stock this year. Many S-shares in my portfolio have proven themselves. Jiutian, ChinaHongxing and Pine have all increased their values by more than 5 times since listing in a relatively short period of time.
Speaking of corporate governance, I think there are more troubled local companies than the Chinese counterparts. The biz practice in China has always been seen in a negative way. I firmly believe that many of these Chinese companies have performed even better in terms of governance rankings vis-a-vis local firms. Many of their CFO and CEO have studied MBA and they are maybe even more advanced in their managerial skills than we ever realise. Even the shrewdest Warren Buffet once invested in PetroChina but too bad he didnt have the nerves to hold on to it. Otherwise, his wealth could have increased very significantly with the strong debut today.
I know whatever I say I can never change some people's mindsets. Well, at the end of the day, what matters really is whether you made money from your investment. There is no one winning formula in share investment. Had you chosen to buy the biggest losers of last year at the beginning of the year, you would have been sitting on profit of >400% so far. The portfolio may not look sexy but what the heck, who cares, as long as you made money!
China XLX
Morgan Stanley has an "overweight" rating on China XLX, with a target of 1.61 dollars. "We see China XLX among the best cost managers in the Chinese coal-based fertilizer (urea) industry, driven by large scale, superior technology upgrade capabilities, and strategic location to both raw materials and fertilizer demand," it said. http://www.tradingmarkets.com/.site/news/Stock%20News/776871/
China Energy
China Energy achieves record net profit of RMB64.7 million in 3Q2007 ·
Net profit rose 26% while revenue improved 37%, on the back of higher Dimethyl Ether (“DME”) sales · Gross margin improved from 36.3% in 3Q2006 to 37.7%in 3Q2007 · New capacity expansion at end of year will increase existing production capacity by 50% Singapore.
05 November 2007 - China Energy Limited , China’s largest producer of Dimethyl Ether (“DME”) – an environmentally-friendly and cost efficient alternative fuel, achieved a record net profit of RMB64.7 million in 3Q2007. This is a 26% increase as compared to the net profit in 3Q2006.
Revenue for 3Q2007 rose 37% to RMB232 million, mainly due to the higher DME sales achieved. Sales volume for DME increased from 22,900 metric tons in 3Q2006 to 50,300 metric tons in 3Q2007, on the back of new capacity recently added in 3Q2007. Overall, gross margin also improved from 36.3% in 3Q2006 to 37.7% in 3Q2007.
Going forward, the Group expects the demand for Dimethyl Ether (DME) to remain strong. The Group is also in the midst of setting up new DME production facilities at Zhangjiagang, Jiangsu Province, China. This additional 300,000 metric tons per annum (“mtpa”) of new capacity is expected to complete by the end of this year. This will increase the existing DME production capacity by 50%, bringing the total DME capacity to 900,000 mtpa by the end of 2007.
Net profit rose 26% while revenue improved 37%, on the back of higher Dimethyl Ether (“DME”) sales · Gross margin improved from 36.3% in 3Q2006 to 37.7%in 3Q2007 · New capacity expansion at end of year will increase existing production capacity by 50% Singapore.
05 November 2007 - China Energy Limited , China’s largest producer of Dimethyl Ether (“DME”) – an environmentally-friendly and cost efficient alternative fuel, achieved a record net profit of RMB64.7 million in 3Q2007. This is a 26% increase as compared to the net profit in 3Q2006.
Revenue for 3Q2007 rose 37% to RMB232 million, mainly due to the higher DME sales achieved. Sales volume for DME increased from 22,900 metric tons in 3Q2006 to 50,300 metric tons in 3Q2007, on the back of new capacity recently added in 3Q2007. Overall, gross margin also improved from 36.3% in 3Q2006 to 37.7% in 3Q2007.
Going forward, the Group expects the demand for Dimethyl Ether (DME) to remain strong. The Group is also in the midst of setting up new DME production facilities at Zhangjiagang, Jiangsu Province, China. This additional 300,000 metric tons per annum (“mtpa”) of new capacity is expected to complete by the end of this year. This will increase the existing DME production capacity by 50%, bringing the total DME capacity to 900,000 mtpa by the end of 2007.
PetroChina the largest company in the world by market capitalisation!
PetroChina's Value Tops $1 Trillion, Surpassing Exxon
By Ying Lou
Nov. 5 (Bloomberg) -- PetroChina Co. almost tripled on its first day of trading in Shanghai, becoming the world's first company to be valued at $1 trillion, larger than the entire Russian stock market.
PetroChina shares rose to 43.96 yuan from the sale price of 16.7 yuan, giving the state-owned oil producer a greater market value than Exxon Mobil Corp. and General Electric Co. combined.
The rally makes PetroChina shares four times more expensive than those of Exxon, even though China's biggest oil producer has a quarter of the revenue. China's stock market was valued at less than $1.1 trillion before tripling this year and giving the communist nation five of the world's 10 biggest companies.
The share sale, the world's biggest this year, surpassed the 66.6 billion yuan raised by China Shenhua Energy Co. in September. PetroChina raised 66.8 billion yuan selling 4 billion shares last week as investors applied for more than 3.3 trillion yuan of stock, almost 50 times the amount PetroChina sold.
The other Chinese companies that rank among the world's 10 largest by market value are China Petroleum, known as Sinopec, China Mobile Ltd., Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp.
By Ying Lou
Nov. 5 (Bloomberg) -- PetroChina Co. almost tripled on its first day of trading in Shanghai, becoming the world's first company to be valued at $1 trillion, larger than the entire Russian stock market.
PetroChina shares rose to 43.96 yuan from the sale price of 16.7 yuan, giving the state-owned oil producer a greater market value than Exxon Mobil Corp. and General Electric Co. combined.
The rally makes PetroChina shares four times more expensive than those of Exxon, even though China's biggest oil producer has a quarter of the revenue. China's stock market was valued at less than $1.1 trillion before tripling this year and giving the communist nation five of the world's 10 biggest companies.
The share sale, the world's biggest this year, surpassed the 66.6 billion yuan raised by China Shenhua Energy Co. in September. PetroChina raised 66.8 billion yuan selling 4 billion shares last week as investors applied for more than 3.3 trillion yuan of stock, almost 50 times the amount PetroChina sold.
The other Chinese companies that rank among the world's 10 largest by market value are China Petroleum, known as Sinopec, China Mobile Ltd., Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp.
Performance of Virtual Fund on this day ~ PetroChina made its debut
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $11,390 = 2.28%
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $11,390 = 2.28%
Friday, 2 November 2007
Performance of Virtual Fund
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $34,670 = 6.93%
Not bad, the portfolio managed to register slight gain even the broader market was down by 88 points thanks to the last minutes recovery of some S shares.
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $34,670 = 6.93%
Not bad, the portfolio managed to register slight gain even the broader market was down by 88 points thanks to the last minutes recovery of some S shares.
Thursday, 1 November 2007
Performance of Virtual Fund
Sum invested = $521,950
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $34,220 = 6.84%
Cash holding = $109,749
Realised profit = $131,699 = 26.34%
Unrealised Profit = $34,220 = 6.84%
Transactions for Virtual Fund
Transactions:
Sold:
Federal 50,000 @ $0.84, Cost $0.78, Realised Profit = $3,000
ChinaXLXmBLeCW80303 500,000 @ $0.10, Cost $0.095, Realised Profit = $2,500
YangzijiangBNPeCW80115 200,000 @ $0.105, Cost $0.125, Realised Loss = -$4,000
C & G Industrial 50,000 @ $0.625, Cost $0.59, Realised Profit = $1,750
ChinaMilk 48,000 @ $1.27, Cost $1.43, Realised Loss = -$7,680
Net Realised Loss = -$4,430
Sale Proceeds = $205,210
Bought:
Courage Marine 100,000 @ $0.475 = $47,500
Golden Agriculture 50,000 @ $1.81 = $90,500
KS Energy 20,000 @ $3.80 = $76,000
Total investment bought = $214,000
Sum invested = $521,950
Cash holding = $109,749
Sold:
Federal 50,000 @ $0.84, Cost $0.78, Realised Profit = $3,000
ChinaXLXmBLeCW80303 500,000 @ $0.10, Cost $0.095, Realised Profit = $2,500
YangzijiangBNPeCW80115 200,000 @ $0.105, Cost $0.125, Realised Loss = -$4,000
C & G Industrial 50,000 @ $0.625, Cost $0.59, Realised Profit = $1,750
ChinaMilk 48,000 @ $1.27, Cost $1.43, Realised Loss = -$7,680
Net Realised Loss = -$4,430
Sale Proceeds = $205,210
Bought:
Courage Marine 100,000 @ $0.475 = $47,500
Golden Agriculture 50,000 @ $1.81 = $90,500
KS Energy 20,000 @ $3.80 = $76,000
Total investment bought = $214,000
Sum invested = $521,950
Cash holding = $109,749
Wednesday, 31 October 2007
Performance of Virtual Fund
Sum invested = $517,590
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $32,000 = 6.4%
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $32,000 = 6.4%
Tuesday, 30 October 2007
Performance of Virtual Fund
Sum invested = $517,590
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $28,340 = 5.67%
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $28,340 = 5.67%
Comments on Warrants
Roden said...
Hi, a friend just recommend your blog to me, I think you are good and would like to learn something from you, especially you are qualify accountant
Dun know much about warrant, as I check Jiutian premium is 65%, isn't too high? Exercise price $0.80. I am novice in stock and warrant market. Can you teach me how to interprete the gearing? how do we choose warrant? base on gearing or premium. If this need to take you a lot of time to explain, kindly tell me any website I could learn about it. Thanks!
Hi Roden,
Thank you for following my blog and ur compliments but I am just doing what many of u can also do. The difference is u need to spend plenty of time "doing ur homework".
I tin u hv done well by pointing out the high premium that Jiutian warrant is commanding at the moment. The text books can teach u all u need to know about Black Scholes and option pricing model. In practice, it is quite different.
Technically speaking, high premium means the market prices the warrant to reflect potential capital gain from converting the warrants. In this case, the market feels that the mother share price will hit higher than S$0.80 in 3 years time and so investors are willing to pay for the premium. The same can be said about PE ratios.
Just like buying a stock, there is no one right formula as to how to choose a warrant. It depends on the underlying stock itself and the time to expiry plus conversion ratios. For me, I bought the warrants with the longest expiry period possible and also with reasonable absolute value. I will never buy warrants eg Cosco at more than $1 as the risk exposure is deemed too much for me.
In Jiutian's case, it is safer because you are buying the warrants directly from the Company and not thru some third party bankers. The chances of it being manipulated is lower.
You may want to read my comments in CNA forum on the expected warrant price before the warrant started trading.
Lastly, remember that all warrants carry high risks. It should only be used for the purpose of leveraging on your investment cost and not for punting. The put warrants provide a hedging mechanism for people to cap their exposure to downside risk. If use wisely, it can supplement your investment portfolio.
Hi, a friend just recommend your blog to me, I think you are good and would like to learn something from you, especially you are qualify accountant
Dun know much about warrant, as I check Jiutian premium is 65%, isn't too high? Exercise price $0.80. I am novice in stock and warrant market. Can you teach me how to interprete the gearing? how do we choose warrant? base on gearing or premium. If this need to take you a lot of time to explain, kindly tell me any website I could learn about it. Thanks!
Hi Roden,
Thank you for following my blog and ur compliments but I am just doing what many of u can also do. The difference is u need to spend plenty of time "doing ur homework".
I tin u hv done well by pointing out the high premium that Jiutian warrant is commanding at the moment. The text books can teach u all u need to know about Black Scholes and option pricing model. In practice, it is quite different.
Technically speaking, high premium means the market prices the warrant to reflect potential capital gain from converting the warrants. In this case, the market feels that the mother share price will hit higher than S$0.80 in 3 years time and so investors are willing to pay for the premium. The same can be said about PE ratios.
Just like buying a stock, there is no one right formula as to how to choose a warrant. It depends on the underlying stock itself and the time to expiry plus conversion ratios. For me, I bought the warrants with the longest expiry period possible and also with reasonable absolute value. I will never buy warrants eg Cosco at more than $1 as the risk exposure is deemed too much for me.
In Jiutian's case, it is safer because you are buying the warrants directly from the Company and not thru some third party bankers. The chances of it being manipulated is lower.
You may want to read my comments in CNA forum on the expected warrant price before the warrant started trading.
Lastly, remember that all warrants carry high risks. It should only be used for the purpose of leveraging on your investment cost and not for punting. The put warrants provide a hedging mechanism for people to cap their exposure to downside risk. If use wisely, it can supplement your investment portfolio.
Monday, 29 October 2007
My portfolio transactions
Today transactions:
Sold:
FSL Trust @ $0.865, cost US$0.86 Breakeven + dividend of US$0.0223
ChinaSports @ $2, cost $1.35 Realised Profit 48%
Fibrechem @ $1.70, cost $1.53 Realised profit 11%
Foreland @ $0.55, cost $0.50 Realised Profit 10%
Hongwei @ $0.365, cost $0.44 Realised Loss 20%
Bought:
ChinaHongxing @ $1.38
ChinaXLX @ $1.26
Sold:
FSL Trust @ $0.865, cost US$0.86 Breakeven + dividend of US$0.0223
ChinaSports @ $2, cost $1.35 Realised Profit 48%
Fibrechem @ $1.70, cost $1.53 Realised profit 11%
Foreland @ $0.55, cost $0.50 Realised Profit 10%
Hongwei @ $0.365, cost $0.44 Realised Loss 20%
Bought:
ChinaHongxing @ $1.38
ChinaXLX @ $1.26
Performance of Virtual Fund
Sum invested = $517,590
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $47,230 = 9.45%
Cash holding = $118,539
Realised profit = $136,129 = 27.23%
Unrealised Profit = $47,230 = 9.45%
Sunday, 28 October 2007
Virtual Fund Transactions
Transactions:
Buy:
Federal 50,000 @ $0.78 = $39,000
Pine 100,000 @ $0.515 = $51,500
ChinaXLXmBLeCW80303 500,000 @ $0.095 = $47,500
YangzijiangBNPeCW80115 200,000 @ $0.125 = $25,000
JiutianCW101015 150,000 @ $0.205 = $30,750
ChinaHongxin 50,000 @ $1.34 = $67,000
Total investment bought = $260,750
Sum invested = $517,590
Cash holding = $118,539
Buy:
Federal 50,000 @ $0.78 = $39,000
Pine 100,000 @ $0.515 = $51,500
ChinaXLXmBLeCW80303 500,000 @ $0.095 = $47,500
YangzijiangBNPeCW80115 200,000 @ $0.125 = $25,000
JiutianCW101015 150,000 @ $0.205 = $30,750
ChinaHongxin 50,000 @ $1.34 = $67,000
Total investment bought = $260,750
Sum invested = $517,590
Cash holding = $118,539
Friday, 26 October 2007
Performance of Virtual Fund
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $32,220 = 6.44%
I just came back from holiday. Not bad, the unrealised profit of Virtual Fund has increased by some $20k over the past week. Many S shares have dropped to close to pre-cheong level. Need to do some homework this weekend.
What a week it has been. Heard that Sembcorp Marine got into some deep ****. Some friends asked me whether this is the time to pick up the share on the cheap.
Some have got burnt by Uni-Asia when it plummeted to $1. I had warned you guys beforehand.
I did not get to reply to some of the queries as I did not have internet access during my break. Sometimes, it is very comfortable to live in a world without phones and computers.
I will try to pen my thoughts on these issues this weekend. Meanwhile, enjoy your weekend and spend quality time with your loved ones!
Thursday, 18 October 2007
Forum queries
Questions:
Mr kit, what u think of hiap seng? i think its time for it to have the next surge forward.. fundamental wise, im comfortable with it, yet tat credit agricole has been selling out.. notice they sold alot of other counters recently.. must be having some kinda trouble.. and wats ur view on anwell? back to recovery path hopefully.. yet i think dow look very bad.. !
Answers:
Hiap Seng's fundamental is ok. With the rising oil prices, its order book may continue to rise. The share placement and disposal of shares by key shareholders might have dampened its share price performance. Anwell has shown turnaround in its fortune. The strong demand for its DVD products from South America and China may drive its top and bottomline even higher. I reckon the stock is still cheap in absolute terms. As the general market seems fatigue, try to stay clear of the market for the time being until the next FOMC meeting at the end of the month.
Mr kit, what u think of hiap seng? i think its time for it to have the next surge forward.. fundamental wise, im comfortable with it, yet tat credit agricole has been selling out.. notice they sold alot of other counters recently.. must be having some kinda trouble.. and wats ur view on anwell? back to recovery path hopefully.. yet i think dow look very bad.. !
Answers:
Hiap Seng's fundamental is ok. With the rising oil prices, its order book may continue to rise. The share placement and disposal of shares by key shareholders might have dampened its share price performance. Anwell has shown turnaround in its fortune. The strong demand for its DVD products from South America and China may drive its top and bottomline even higher. I reckon the stock is still cheap in absolute terms. As the general market seems fatigue, try to stay clear of the market for the time being until the next FOMC meeting at the end of the month.
First Ship Lease Trust To Distribute US2.23 cents for Q3
FIRST SHIP LEASE TRUST TO DISTRIBUTE US$11.15 MILLION TO UNITHOLDERS FOR 3Q FY07
• Distribution – US2.23¢ per unit (4.7% higher than IPO projection)
• Revenue – US$12.8 million (10.7% higher than IPO projection)
Singapore, 18 October 2007 – FSL Trust Management Pte. Ltd. ("FSLTM"), trustee-manager of First Ship Lease Trust ("FSL Trust"), today announced a total distribution of US$11.15 million to unitholders of FSL Trust for the third quarter ended 30 September 2007 ("3Q FY07"). This represents 100% of the amount available for distribution.
Based on 500 million outstanding units, the Distribution Per Unit ("DPU") is US2.23¢, 4.7% higher than the DPU of US2.13¢ projected at the time of FSL Trust’s Initial Public Offering ("IPO") in March 2007.
• Distribution – US2.23¢ per unit (4.7% higher than IPO projection)
• Revenue – US$12.8 million (10.7% higher than IPO projection)
Singapore, 18 October 2007 – FSL Trust Management Pte. Ltd. ("FSLTM"), trustee-manager of First Ship Lease Trust ("FSL Trust"), today announced a total distribution of US$11.15 million to unitholders of FSL Trust for the third quarter ended 30 September 2007 ("3Q FY07"). This represents 100% of the amount available for distribution.
Based on 500 million outstanding units, the Distribution Per Unit ("DPU") is US2.23¢, 4.7% higher than the DPU of US2.13¢ projected at the time of FSL Trust’s Initial Public Offering ("IPO") in March 2007.
Jiutian Bonus Warrants to commence trading 19 Oct
Bonus Warrants will be listed and quoted on the Official List of the Singapore Exchange Securities Trading Limited with effect from 9.00 a.m. on 19 October 2007. Trading in the Warrants will also commence with effect from 9.00 a.m. on 19 October 2007.
Performance of Virtual Fund
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $10,330 = 2.07%
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $10,330 = 2.07%
Wednesday, 17 October 2007
Performance of Virtual Fund ~ on this day 1st A380 landed in Singapore
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $8,170 = 1.63%
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $8,170 = 1.63%
Tuesday, 16 October 2007
Performance of Virtual Fund
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $8,510 = 1.7%
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $8,510 = 1.7%
Monday, 15 October 2007
Uni-Asia VS FST
Today a friend called and asked me what I think of Uni-Asia. She said her husband is laughing to the bank as the share price rocketed from $0.60 to more than $2 in just 2 weeks.
I told her Uni-Asia does not meet my investment criteria. However attractive it might seem, I will not hold such counter unless there are fundamental changes to its business model and other new growth drivers come into play to support the hefty valuation at this moment.
I just checked the share price performance for today. It shot to new high of $2.75 and dropped to under $2 at closing. At the half year result briefing, the management highlighted that a significant part of the income arisen from the launch of Akebono Fund and one-time disposal of 3 vessels under its finance.
Some investors might interpret these exceptional items as recurring transactions and hence the high profitability can be sustained. That is unlikely to be the case as the Company has not made any other significant announcement so far.
My friend also asked why i did not dump everything into this stock as the Virtual Fund doesn't involve real money anyway. That way, I might be able to reap the returns in the shortest possible time.
I wish to reiterate that despite my stated target return of 50%, I still have more than 1 year to achieve that. I will not be pressurised to punt at this juncture. Moreover, I know that this Virtual Fund has been closely followed by some. Some friends even try to mirror what i buy and sell in using hard earned savings. To this group of followers, despite my disclaimer, I need to act responsibly so not to mislead them into speculating.
For my own portfolio, I bought some First Ship Lease Trust today at US$0.86. FST is in the business of leasing, similar to that of Uni-Asia. It doesn't however engage in any ship operating activities. Uni-Asia, on the other hand, derived half of their revenue from ships investment and management, which arguable can be more risky.
FST has committed to be paying quarterly dividends. The potential payouts could yield more than 10% return at current prices. Its share price has been heading south since listing, mainly due to the weakening USD. I believe FST provides good exposure to the shipping trust sector, which has been under performing so far.
I told her Uni-Asia does not meet my investment criteria. However attractive it might seem, I will not hold such counter unless there are fundamental changes to its business model and other new growth drivers come into play to support the hefty valuation at this moment.
I just checked the share price performance for today. It shot to new high of $2.75 and dropped to under $2 at closing. At the half year result briefing, the management highlighted that a significant part of the income arisen from the launch of Akebono Fund and one-time disposal of 3 vessels under its finance.
Some investors might interpret these exceptional items as recurring transactions and hence the high profitability can be sustained. That is unlikely to be the case as the Company has not made any other significant announcement so far.
My friend also asked why i did not dump everything into this stock as the Virtual Fund doesn't involve real money anyway. That way, I might be able to reap the returns in the shortest possible time.
I wish to reiterate that despite my stated target return of 50%, I still have more than 1 year to achieve that. I will not be pressurised to punt at this juncture. Moreover, I know that this Virtual Fund has been closely followed by some. Some friends even try to mirror what i buy and sell in using hard earned savings. To this group of followers, despite my disclaimer, I need to act responsibly so not to mislead them into speculating.
For my own portfolio, I bought some First Ship Lease Trust today at US$0.86. FST is in the business of leasing, similar to that of Uni-Asia. It doesn't however engage in any ship operating activities. Uni-Asia, on the other hand, derived half of their revenue from ships investment and management, which arguable can be more risky.
FST has committed to be paying quarterly dividends. The potential payouts could yield more than 10% return at current prices. Its share price has been heading south since listing, mainly due to the weakening USD. I believe FST provides good exposure to the shipping trust sector, which has been under performing so far.
Performance of Virtual Fund
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $22,440 = 4.49%
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Unrealised Profit = $22,440 = 4.49%
Virtual Fund Transactions
The market seems fatigue after recent surge. I have decided to lock in the profits of the key holdings ahead of the FOMC meeting at the end of this month.
Transactions for today:
Sold:
ChinaSports 100,000 @ $1.82, Realised Profit = $47,000
Jiutian 250,000 @ $0.66, Realised Profit = $27,500
(Still have 50,000 bonus warrants yet to be traded)
China Energy 20,000 @ $1.60, Realised Profit = $4,400
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Transactions for today:
Sold:
ChinaSports 100,000 @ $1.82, Realised Profit = $47,000
Jiutian 250,000 @ $0.66, Realised Profit = $27,500
(Still have 50,000 bonus warrants yet to be traded)
China Energy 20,000 @ $1.60, Realised Profit = $4,400
Sum invested = $256,840
Cash holding = $379,289
Realised profit = $136,129 = 27.23%
Friday, 12 October 2007
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $104,320 = 20.86%
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $104,320 = 20.86%
Thursday, 11 October 2007
Raffles Education Corp ~ A phenomenon Stock!
Raffles Education Corp was listed on the SGX back in early 2002. If I remember correctly, it was trading at below $0.20 after IPO. After many rounds of splits and bonus issues, if you held on to 1,000 shares since IPO, today you would have got 6,500 shares.
If you had invested $1,000 back then, that $1,000 would have grown by 158.444 times. ie, you shares would be worth close to $160,000 at today's closing price of $2.87.
This was probably the best performing stock in the history of SGX until Ezion came about recently. It has made Mr Chew one of the richest men in Singapore.
Today, I would like to congratulate Raffles Education as it set to become the largest education provider in the Asia Pacific region. I will continue to hold the shares in my own portfolio. Who knows? It might be worth more than $1million in 10 years time.
If you had invested $1,000 back then, that $1,000 would have grown by 158.444 times. ie, you shares would be worth close to $160,000 at today's closing price of $2.87.
This was probably the best performing stock in the history of SGX until Ezion came about recently. It has made Mr Chew one of the richest men in Singapore.
Today, I would like to congratulate Raffles Education as it set to become the largest education provider in the Asia Pacific region. I will continue to hold the shares in my own portfolio. Who knows? It might be worth more than $1million in 10 years time.
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $115,490 = 23.1%
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $115,490 = 23.1%
Raffles Education set to be the Largest Education Provider in the Asia Pacific
- Makes strategic acquisition of Oriental University City in the PRC for RMB2 Billion
- Acquisition opens new growth opportunities and will add 5 colleges and a university to the Group’s PRC footprint
- Entrenches leadership position in the PRC education industry
Singapore, October 11th, 2007 - Main Board-listed Raffles Education Corporation Limited (“RafflesEducationCorp” or “the Group”) today announced that it has entered into an agreement to acquire Oriental University City Development Co., Ltd ("Oriental University City") in Langfang City, Hebei Province, the PRC. A strategic development that will entrench the Group’s leadership position in the PRC and set it as the largest education provider in the Asia Pacific.
Oriental University City is a company involved in the development, operation and management of educational assets in the PRC.
Under the terms of the agreement, the Group will acquire Oriental University City for a purchase consideration of approximately RMB 2 billion (S$392 million). The acquisition is payable in 4 equal instalments over a 4 year period and will be funded either through external financing arrangements, internal resources, or a combination of both, and the revenues generated by the Group’s operations in Oriental University City.
As part of the terms of the acquisition, Oriental University City will provide a pre-tax profit guarantee of RMB 100 million in 2008 and RMB 140 million in 2009. In addition, it will also transfer the ownership of Langfang Vocational Technical Institute and Langfang Health School to the Group. It will also apply to the PRC Ministry of Education to obtain the necessary approvals for the establishment of a private university, a private college and two Sino-foreign cooperative schools.
- Acquisition opens new growth opportunities and will add 5 colleges and a university to the Group’s PRC footprint
- Entrenches leadership position in the PRC education industry
Singapore, October 11th, 2007 - Main Board-listed Raffles Education Corporation Limited (“RafflesEducationCorp” or “the Group”) today announced that it has entered into an agreement to acquire Oriental University City Development Co., Ltd ("Oriental University City") in Langfang City, Hebei Province, the PRC. A strategic development that will entrench the Group’s leadership position in the PRC and set it as the largest education provider in the Asia Pacific.
Oriental University City is a company involved in the development, operation and management of educational assets in the PRC.
Under the terms of the agreement, the Group will acquire Oriental University City for a purchase consideration of approximately RMB 2 billion (S$392 million). The acquisition is payable in 4 equal instalments over a 4 year period and will be funded either through external financing arrangements, internal resources, or a combination of both, and the revenues generated by the Group’s operations in Oriental University City.
As part of the terms of the acquisition, Oriental University City will provide a pre-tax profit guarantee of RMB 100 million in 2008 and RMB 140 million in 2009. In addition, it will also transfer the ownership of Langfang Vocational Technical Institute and Langfang Health School to the Group. It will also apply to the PRC Ministry of Education to obtain the necessary approvals for the establishment of a private university, a private college and two Sino-foreign cooperative schools.
Wednesday, 10 October 2007
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $101,970 = 20.39%
Just back from biz trip. Unrealised gains have shrunk by some $30k mainly due to Jiutian ex bonus warrant. When the warrant starts trading, it should make up the lost ground.
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $101,970 = 20.39%
Just back from biz trip. Unrealised gains have shrunk by some $30k mainly due to Jiutian ex bonus warrant. When the warrant starts trading, it should make up the lost ground.
Monday, 8 October 2007
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $130,140 = 26.03%
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $130,140 = 26.03%
Friday, 5 October 2007
New STI Index 30 Stocks
SGX unveils revamped STI index of 30 stocks:
1. Capitaland
2. Capitamall Trust
3. City Developments
4. Cosco Corp
5. DBS Group Holdings
6. Fraser and Neave
7. Genting International
8. Hong Kong Land
9. Jardine Cycle & Carriage
10. Jardine Strategic
11. Keppel Corp
12. Keppel Land
13. NOL
14. Noble Group
15. Olam
16. OCBC
17. Sembcorp Industries
18. Sembcorp Marine
19. SIA engineering
20. SIA
21. SGX
22. SPH
23. ST Engineering
24. SingTel
25. StarHub
26. Thai Beverage
27. UOB
28. Wilmar
29. Yangzijiang
30. Yanlord
1. Capitaland
2. Capitamall Trust
3. City Developments
4. Cosco Corp
5. DBS Group Holdings
6. Fraser and Neave
7. Genting International
8. Hong Kong Land
9. Jardine Cycle & Carriage
10. Jardine Strategic
11. Keppel Corp
12. Keppel Land
13. NOL
14. Noble Group
15. Olam
16. OCBC
17. Sembcorp Industries
18. Sembcorp Marine
19. SIA engineering
20. SIA
21. SGX
22. SPH
23. ST Engineering
24. SingTel
25. StarHub
26. Thai Beverage
27. UOB
28. Wilmar
29. Yangzijiang
30. Yanlord
Performance of Virtual Fund on this day ~ Singaporeans have no confidence in future retirement planning
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $131,300 = 26.26%
Today the unrealised profit continued to rise mainly attributed to 8 cents or 4.4% recovery in the price of ChinaSports from $1.80 to $1.88. ChinaSports is the second largest holding in the Virtual Portfolio.
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $131,300 = 26.26%
Today the unrealised profit continued to rise mainly attributed to 8 cents or 4.4% recovery in the price of ChinaSports from $1.80 to $1.88. ChinaSports is the second largest holding in the Virtual Portfolio.
Thursday, 4 October 2007
Performance of Virtual Fund on this day Liverpool had a dismal CL performance
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $124,290 = 24.86%
I have been rather inactive for the past few sessions due to my demanding work commitments. Plenty of works to prepare for my business trip next week. Anyway, the current portfolio of stocks should be robust enough to ride out the current market volatility.
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $124,290 = 24.86%
I have been rather inactive for the past few sessions due to my demanding work commitments. Plenty of works to prepare for my business trip next week. Anyway, the current portfolio of stocks should be robust enough to ride out the current market volatility.
Wednesday, 3 October 2007
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $102,350 = 20.47%
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $102,350 = 20.47%
Tuesday, 2 October 2007
Performance of Virtual Fund
Sum invested = $556,940
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $136,890 = 27.38%
The fund came so close to crossing the final hurdle. I thought I was able to close the fund today. It looks like I have to wait a little longer.
The unrealised gain has declined by some $20k as I was not able to response swiftly to the market movements today. I was engaged in the management meeting most of the day. But it also adds realism to this exercise that the value of the fund can fall sometimes.
Cash holding = $289
Realised profit = $57,229 = 11.44%
Unrealised Profit = $136,890 = 27.38%
The fund came so close to crossing the final hurdle. I thought I was able to close the fund today. It looks like I have to wait a little longer.
The unrealised gain has declined by some $20k as I was not able to response swiftly to the market movements today. I was engaged in the management meeting most of the day. But it also adds realism to this exercise that the value of the fund can fall sometimes.
Monday, 1 October 2007
Performance of Virtual Fund
Sum invested = $551,690
Cash holding = $539
Realised profit = $52,229 = 10.44%
Unrealised Profit = $162,730 = 32.5%
Tomorrow I may achieve my $250,000 gain or 50% return target. I only short of $35,041!
Cash holding = $539
Realised profit = $52,229 = 10.44%
Unrealised Profit = $162,730 = 32.5%
Tomorrow I may achieve my $250,000 gain or 50% return target. I only short of $35,041!
Maggie Q and the charging Bull
Someone asks why i put Maggie Q photo in my blog. Well, i happened to come across this photo in her latest movie. She is pretty and wearing red (symbolising red chips). I thought by putting her next to the charging bull on her right. The bull sees red sure cannot tahan and would cheong like mad. My feng shui master told me so. haha...
Virtual Fund transactions
Transactions for today:
Sold
22,000 Tiong Woon @ $1.15, Realised profit = $2,200
20,000 Swiber @ $3.56, Realised Profit = $8,800
Bought
100,000 CMZ @ $0.285 = $28,500
48,000 ChinaMilk @ $1.43 = $68,640
Sum invested = $551,690
Cash holding = $539
Realised profit = $52,229 = 10.44%
Sold
22,000 Tiong Woon @ $1.15, Realised profit = $2,200
20,000 Swiber @ $3.56, Realised Profit = $8,800
Bought
100,000 CMZ @ $0.285 = $28,500
48,000 ChinaMilk @ $1.43 = $68,640
Sum invested = $551,690
Cash holding = $539
Realised profit = $52,229 = 10.44%
Sunday, 30 September 2007
Some thoughts on the Virtual Fund
This Virtual Fund has caused a bit of controvesy in the investing community. Some forumers feel that it is easy to simulate this kind of virtual thing as it does not involve human emotions; greed and fears. Some friends have asked me if I could develop a similar portfolio for them in real terms.
Personally, I feel that the timing of the launch of this Virtual Fund is crucial to the overall profitability so far. The fund was launched after the major correction subsequent to the sub-prime woes. The rush into China stocks over the last few sessions also contributed significantly to the gains.
If you have been following this blog, you would appreciate what I have done on a day to day basis. It was mentioned at the outset that the fund was created with a specific intent and purpose. For the benefit of people who follow my buy and sell movements, I have also detailed my daily transactions and balances. I hope to be as transparent and accountable in the whole process as this exercise could well be used as a testimonial of my fund management skills in the future.
To be fair, I have treated this fund as if I were managing real money. Personally, I also hold most of the counters in my own portfolio. The dollar value involved of course is no way near the $500,000 war chest. But the investing principle involved is similar.
As you can see, i do actively manage the counters by making timely switches, taking into account the latest market developments and the fundamental of individual stocks. Had I not been keeping myself abrest of the trends, would I have bought into so many China stocks before the current rally to maximise the return?
During the past 2 months, I was fortunate enough to develop a portfolio for a friend with an initial capital of $7,000. The investment has yielded capital gain of close to $2,000 or 28%. Her mother came to know about it and asked me to invest $5,000 for quick return. I turned her down as I never promised quick bucks!
I think there is still a lot of steam left in the China related counters. There will be profit taking here and there but in the medium term you can expect very decent return if you stay invested.
Good luck!
Personally, I feel that the timing of the launch of this Virtual Fund is crucial to the overall profitability so far. The fund was launched after the major correction subsequent to the sub-prime woes. The rush into China stocks over the last few sessions also contributed significantly to the gains.
If you have been following this blog, you would appreciate what I have done on a day to day basis. It was mentioned at the outset that the fund was created with a specific intent and purpose. For the benefit of people who follow my buy and sell movements, I have also detailed my daily transactions and balances. I hope to be as transparent and accountable in the whole process as this exercise could well be used as a testimonial of my fund management skills in the future.
To be fair, I have treated this fund as if I were managing real money. Personally, I also hold most of the counters in my own portfolio. The dollar value involved of course is no way near the $500,000 war chest. But the investing principle involved is similar.
As you can see, i do actively manage the counters by making timely switches, taking into account the latest market developments and the fundamental of individual stocks. Had I not been keeping myself abrest of the trends, would I have bought into so many China stocks before the current rally to maximise the return?
During the past 2 months, I was fortunate enough to develop a portfolio for a friend with an initial capital of $7,000. The investment has yielded capital gain of close to $2,000 or 28%. Her mother came to know about it and asked me to invest $5,000 for quick return. I turned her down as I never promised quick bucks!
I think there is still a lot of steam left in the China related counters. There will be profit taking here and there but in the medium term you can expect very decent return if you stay invested.
Good luck!
Friday, 28 September 2007
Review of Virtual Fund Performance for Sep 2007
Sum invested = $540,050
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $91,570 = 18.31%
Shareholdings as at end of Sep 2007:
C&G Ind 50,000 Bought $0.59 Last $0.675 Unrealised Profit $4,250;
ChinaEnergy 20,000 Bought $1.38 Last $1.52 Unrealised Profit $2,800;
ChinaSports 100,000 Bought $1.35 Last $1.67 Unrealised Profit $32,000;
FibreChem 25,000 Bought $1.35 Last $1.57 Unrealised Profit $5,500;
Foreland 50,000 Bought $0.50 Last $0.565 Unrealised Profit $3,250;
Jiutian 250,000 Bought $0.55 Last $0.65 Unrealised Profit $25,000;
Midas 20,000 Bought $1.41 Last $1.73 Unrealised Profit $6,400;
Sihuan 50,000 Bought $0.76 Last $0.845 Unrealised Profit $4,250;
Swiber 20,000 Bought $3.12 Last $3.46 Unrealised Profit $6,800;
Tiong Woon 22,000 Bought $1.05 Last $1.11 Unrealised Profit $1,320
The Virtual Fund has achieved return of 26.56% since inception on 5 Sep 2007. This is half of my expected return of 50% for only 3 weeks!
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $91,570 = 18.31%
Shareholdings as at end of Sep 2007:
C&G Ind 50,000 Bought $0.59 Last $0.675 Unrealised Profit $4,250;
ChinaEnergy 20,000 Bought $1.38 Last $1.52 Unrealised Profit $2,800;
ChinaSports 100,000 Bought $1.35 Last $1.67 Unrealised Profit $32,000;
FibreChem 25,000 Bought $1.35 Last $1.57 Unrealised Profit $5,500;
Foreland 50,000 Bought $0.50 Last $0.565 Unrealised Profit $3,250;
Jiutian 250,000 Bought $0.55 Last $0.65 Unrealised Profit $25,000;
Midas 20,000 Bought $1.41 Last $1.73 Unrealised Profit $6,400;
Sihuan 50,000 Bought $0.76 Last $0.845 Unrealised Profit $4,250;
Swiber 20,000 Bought $3.12 Last $3.46 Unrealised Profit $6,800;
Tiong Woon 22,000 Bought $1.05 Last $1.11 Unrealised Profit $1,320
The Virtual Fund has achieved return of 26.56% since inception on 5 Sep 2007. This is half of my expected return of 50% for only 3 weeks!
Most unrecognised value stock: C&G Industrial
Cai Junyi, 33, CEO of C&G: Key driver of C&G's business, and holds a master's in economics
C&G Industrial has emerged as the stock with the most unrecognized value among SGX-listed companies in a complex analysis by Business Times senior correspondent Teh Hooi Ling.It has a lot of cash - some 40 per cent of its market cap is represented by cash. On top of that, assuming it can maintain its first-half operating profit, the company may rake in $44.8 million in pre-tax profits this year, she wrote.According to Bloomberg, the cost of capital for C&G - a producer of PET chips used to manufacture polyester fibre - is 10.73 per cent.Based on this, that business is worth $335 million, assuming it can maintain that performance in perpetuity.A caveat Hooi Ling had: In the analysis, investors have to decide if they think the respective companies can maintain their current performance for their existing businesses, and that these are not top-of-the-cycle figures.The analysis was based on McKinsey’s three-step approach to disaggregate a company's current market value into its current performance, its return premium, and the value expected from its future growth.
Source: Business Times
C&G Industrial has emerged as the stock with the most unrecognized value among SGX-listed companies in a complex analysis by Business Times senior correspondent Teh Hooi Ling.It has a lot of cash - some 40 per cent of its market cap is represented by cash. On top of that, assuming it can maintain its first-half operating profit, the company may rake in $44.8 million in pre-tax profits this year, she wrote.According to Bloomberg, the cost of capital for C&G - a producer of PET chips used to manufacture polyester fibre - is 10.73 per cent.Based on this, that business is worth $335 million, assuming it can maintain that performance in perpetuity.A caveat Hooi Ling had: In the analysis, investors have to decide if they think the respective companies can maintain their current performance for their existing businesses, and that these are not top-of-the-cycle figures.The analysis was based on McKinsey’s three-step approach to disaggregate a company's current market value into its current performance, its return premium, and the value expected from its future growth.
Source: Business Times
Review of Own Portfolio for Sep 2007
Latest Holdings:
Cash
C&G Industrial +5.5%
China Energy +10.1%
ChinaSports +23.7%
ChinaWheel +2.1%
FibreChem +2.6%
Foreland +8.6%
Hongwei -2.6%
Jiutian Chemical +58.5%
Pine Agritech -8.7%
Sihuan +11.2%
CPF
Asia Enterprise -12.3%
Midas +10.2%
Raffles Education +1.8%
Cash
C&G Industrial +5.5%
China Energy +10.1%
ChinaSports +23.7%
ChinaWheel +2.1%
FibreChem +2.6%
Foreland +8.6%
Hongwei -2.6%
Jiutian Chemical +58.5%
Pine Agritech -8.7%
Sihuan +11.2%
CPF
Asia Enterprise -12.3%
Midas +10.2%
Raffles Education +1.8%
Own transactions
Bought:
Fibrechem
ChinaWheel
C&G Industrial
Partially Sold:
Hongwei
Foreland
Pine
Jiutian
Fibrechem
ChinaWheel
C&G Industrial
Partially Sold:
Hongwei
Foreland
Pine
Jiutian
Which companies hold greatest market value?
By TEH HOOI LING SENIOR CORRESPONDENT
Most investors associate high- PE stocks with high-growth stocks. But as pointed out by consulting firm McKinsey in a couple of its reports, there is another, possibly more important, component which accounts for a stock's high or low earnings multiple.
That is return on capital. It makes sense. Growth requires investment, and if the investment doesn't yield an adequate return over the cost of capital, then it will not create shareholder value. That means no boost to share price and no increase in the price-earnings multiple.
So a high-PE stock could be one which is generating high growth at a return which slightly exceeds its cost of capital, or one which is chugging along slowly and steadily but earning a return on capital that far exceeds its cost of capital.
McKinsey has proposed a three-step approach to disaggregate a company's current market value into its current performance, its return premium, and the value expected from its future growth. Current performance is derived by estimating the value of a company's current earnings in perpetuity, assuming no growth.
At no growth, it is assumed that depreciation is equal to capital expenditure, and therefore net operational profit less cash taxes is equal to free cash flow for a business that does not grow. So dividing net operational profits after cash taxes by the cost of capital would give us the value of current earnings, with no growth, in perpetuity.
The premise is that companies with the highest ROICs relative to their WACCs are the greatest creators of value for shareholders
Return premium is the value a company delivers by earning superior returns on its growth capital. In order to assess how a company's return on growth capital influences its PE multiple, McKinsey recommends discounting a company's cash flow as if it grew in perpetuity at some normalised rate, such as nominal GDP growth. Through repeated analysis, McKinsey has found that the result is a good proxy for the premium a company enjoys in the capital markets because of its high returns on future growth capital.
And finally, value from growth represents how much a company delivers by growing over and above nominal GDP growth. It can be calculated as that portion of the company's current market value that is not captured in current performance or the return premium. For a company that grows more slowly than the GDP, this value will be negative.
I've decided to use this three-step approach on some Singapore-listed companies.
Three-step method
First I downloaded from Bloomberg the entire list of stocks traded on the Singapore Exchange with attributes like return on invested capital (ROIC), market capitalisation, their weighted average cost of capital (WACC), and so forth.
I then calculated the difference between the ROICs and the WACCs, and ranked them from the highest to the lowest. The premise is that companies with the highest ROICs relative to their WACCs are the greatest creators of value for shareholders.
From the top 50 companies, I randomly picked 13 and went through their latest results one by one so as to calculate their pre-tax operating margin, their asset turnover, and their ROIC (excluding and including cash held in banks). Finally, I attempted to attribute how much of the stocks' current market value is from its current performance under a no-growth scenario, how much of it is from return premium, and how much is from expected future growth. The results are pretty interesting.
The formula I used to calculate ROIC is net operating earnings before interest and amortisation charges, but after cash taxes divided by total assets, net of excess cash, and non-interest-bearing current liabilities.
Almost all the companies on the list have strong ROIC. A company can arrive at a high ROIC by either having a high profit margin, or more efficiently utilising its assets to increase sales. The former is measured by operating profit margin, and the latter by asset turnover.
As can be seen from the table, most of the companies are high-margin, low-volume businesses. The three exceptions are Hersing Corp, Apex-Pal and Olam, which are low-margin, high-volume businesses.
Meanwhile, a lot of these companies also have a lot of cash. With the exception of MobileOne and StarHub, all have more than 5 per cent of their market capitalisation represented by cash in the bank. The most extreme was C&G Industrial, which according to its June 30, 2007 balance sheet, has 557 million yuan in the bank. That's about $112.5 million, or about 40 per cent of its current market cap of $274 million.
I then tried to calculate the value for these companies based on their existing businesses under a no-growth scenario. As suggested by McKinsey, I divided net operational profits after cash taxes by the cost of capital (obtained from Bloomberg) to arrive at that number.
So companies whose existing business, under a no-growth scenario, has a higher value than their current enterprise value are presumably undervalued. Enterprise value is market cap plus debts minus cash.
From the list, you can see that C&G Industrial tops my list of companies which has the most unrecognised value.
As mentioned, it has a lot of cash - some 40 per cent of its market cap is represented by cash. On top of that, assuming it can maintain its first-half operating profit, the company may rake in $44.8 million in pre-tax profits this year. According to Bloomberg, the cost of capital for C&G - a producer of PET chips used to manufacture polyester fibre - is 10.73 per cent. Based on this, that business is worth $335 million, assuming it can maintain that performance in perpetuity.
Raising its cost of capital to 15 per cent would reduce the current business worth to $240 million. Add in the company's return premium and the stock still looks undervalued. Other stocks which appear undervalued based on the above screening include Courage Marine, Hersing, MobileOne and Micro Mechanics.
In all the above analysis, investors have to decide if they think the respective companies can maintain their current performance for their existing businesses, and that these are not top-of-the-cycle figures. Another factor to consider is the WACC, whether they think it is too low and hence not representative of the risks faced by the companies.
For example, Courage Marine is enjoying the very high dry-bulk freight rates now. Can this be sustained? Perhaps the current valuation of its business is high enough, relative to its enterprise value, to allow for the easing of freight rates going forward.
As for MobileOne, its high valuation has much to do with its relatively low WACC. Is that justified?
Meanwhile, among all the stocks I looked at, Olam has the highest imputed growth value and return premium based on its current enterprise value. The value of its existing business - under a no-growth scenario - only makes up about 19 per cent of its enterprise value today.
Most investors associate high- PE stocks with high-growth stocks. But as pointed out by consulting firm McKinsey in a couple of its reports, there is another, possibly more important, component which accounts for a stock's high or low earnings multiple.
That is return on capital. It makes sense. Growth requires investment, and if the investment doesn't yield an adequate return over the cost of capital, then it will not create shareholder value. That means no boost to share price and no increase in the price-earnings multiple.
So a high-PE stock could be one which is generating high growth at a return which slightly exceeds its cost of capital, or one which is chugging along slowly and steadily but earning a return on capital that far exceeds its cost of capital.
McKinsey has proposed a three-step approach to disaggregate a company's current market value into its current performance, its return premium, and the value expected from its future growth. Current performance is derived by estimating the value of a company's current earnings in perpetuity, assuming no growth.
At no growth, it is assumed that depreciation is equal to capital expenditure, and therefore net operational profit less cash taxes is equal to free cash flow for a business that does not grow. So dividing net operational profits after cash taxes by the cost of capital would give us the value of current earnings, with no growth, in perpetuity.
The premise is that companies with the highest ROICs relative to their WACCs are the greatest creators of value for shareholders
Return premium is the value a company delivers by earning superior returns on its growth capital. In order to assess how a company's return on growth capital influences its PE multiple, McKinsey recommends discounting a company's cash flow as if it grew in perpetuity at some normalised rate, such as nominal GDP growth. Through repeated analysis, McKinsey has found that the result is a good proxy for the premium a company enjoys in the capital markets because of its high returns on future growth capital.
And finally, value from growth represents how much a company delivers by growing over and above nominal GDP growth. It can be calculated as that portion of the company's current market value that is not captured in current performance or the return premium. For a company that grows more slowly than the GDP, this value will be negative.
I've decided to use this three-step approach on some Singapore-listed companies.
Three-step method
First I downloaded from Bloomberg the entire list of stocks traded on the Singapore Exchange with attributes like return on invested capital (ROIC), market capitalisation, their weighted average cost of capital (WACC), and so forth.
I then calculated the difference between the ROICs and the WACCs, and ranked them from the highest to the lowest. The premise is that companies with the highest ROICs relative to their WACCs are the greatest creators of value for shareholders.
From the top 50 companies, I randomly picked 13 and went through their latest results one by one so as to calculate their pre-tax operating margin, their asset turnover, and their ROIC (excluding and including cash held in banks). Finally, I attempted to attribute how much of the stocks' current market value is from its current performance under a no-growth scenario, how much of it is from return premium, and how much is from expected future growth. The results are pretty interesting.
The formula I used to calculate ROIC is net operating earnings before interest and amortisation charges, but after cash taxes divided by total assets, net of excess cash, and non-interest-bearing current liabilities.
Almost all the companies on the list have strong ROIC. A company can arrive at a high ROIC by either having a high profit margin, or more efficiently utilising its assets to increase sales. The former is measured by operating profit margin, and the latter by asset turnover.
As can be seen from the table, most of the companies are high-margin, low-volume businesses. The three exceptions are Hersing Corp, Apex-Pal and Olam, which are low-margin, high-volume businesses.
Meanwhile, a lot of these companies also have a lot of cash. With the exception of MobileOne and StarHub, all have more than 5 per cent of their market capitalisation represented by cash in the bank. The most extreme was C&G Industrial, which according to its June 30, 2007 balance sheet, has 557 million yuan in the bank. That's about $112.5 million, or about 40 per cent of its current market cap of $274 million.
I then tried to calculate the value for these companies based on their existing businesses under a no-growth scenario. As suggested by McKinsey, I divided net operational profits after cash taxes by the cost of capital (obtained from Bloomberg) to arrive at that number.
So companies whose existing business, under a no-growth scenario, has a higher value than their current enterprise value are presumably undervalued. Enterprise value is market cap plus debts minus cash.
From the list, you can see that C&G Industrial tops my list of companies which has the most unrecognised value.
As mentioned, it has a lot of cash - some 40 per cent of its market cap is represented by cash. On top of that, assuming it can maintain its first-half operating profit, the company may rake in $44.8 million in pre-tax profits this year. According to Bloomberg, the cost of capital for C&G - a producer of PET chips used to manufacture polyester fibre - is 10.73 per cent. Based on this, that business is worth $335 million, assuming it can maintain that performance in perpetuity.
Raising its cost of capital to 15 per cent would reduce the current business worth to $240 million. Add in the company's return premium and the stock still looks undervalued. Other stocks which appear undervalued based on the above screening include Courage Marine, Hersing, MobileOne and Micro Mechanics.
In all the above analysis, investors have to decide if they think the respective companies can maintain their current performance for their existing businesses, and that these are not top-of-the-cycle figures. Another factor to consider is the WACC, whether they think it is too low and hence not representative of the risks faced by the companies.
For example, Courage Marine is enjoying the very high dry-bulk freight rates now. Can this be sustained? Perhaps the current valuation of its business is high enough, relative to its enterprise value, to allow for the easing of freight rates going forward.
As for MobileOne, its high valuation has much to do with its relatively low WACC. Is that justified?
Meanwhile, among all the stocks I looked at, Olam has the highest imputed growth value and return premium based on its current enterprise value. The value of its existing business - under a no-growth scenario - only makes up about 19 per cent of its enterprise value today.
Thursday, 27 September 2007
Virtual Fund Performance
Sum invested = $540,050
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $55,880 = 11.17%
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $55,880 = 11.17%
Wednesday, 26 September 2007
Virtual Fund Transactions
Sold:
50,000 BH Global Marine @$0.755 = $37,750
10,000 Labroy Marine @$2.47 = $24,700
Realised Profit = $300
Bought:
20,000 ChinaEnergy @$1.38 = $27,600
25,000 FibreChem @$1.35 = $33,750
Sum invested = $540,050
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $57,450 = 11.49%
I feel that such a strategic switching of counters is necessary as I anticipate the China counters to continue surging ahead.
50,000 BH Global Marine @$0.755 = $37,750
10,000 Labroy Marine @$2.47 = $24,700
Realised Profit = $300
Bought:
20,000 ChinaEnergy @$1.38 = $27,600
25,000 FibreChem @$1.35 = $33,750
Sum invested = $540,050
Cash holding = $1,179
Realised profit = $41,229 = 8.25%
Unrealised profit = $57,450 = 11.49%
I feel that such a strategic switching of counters is necessary as I anticipate the China counters to continue surging ahead.
Virtual Fund Performance on this day Torres scored his first hat-trick for Liverpool
Sum invested = $540,850
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $57,750 = 11.55%
The unrealised profit jumps some $20,000 in line with the powering ahead of china related counters today.
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $57,750 = 11.55%
The unrealised profit jumps some $20,000 in line with the powering ahead of china related counters today.
Tuesday, 25 September 2007
Virtual Fund Performance
Sum invested = $540,850
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $36,900 = 7.38%
ChinaSports and Swiber continue the uptrends which contributed to the increase in unrealised profit for today.
Have a Happy and Fruitful Mid Autumn Festival!
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $36,900 = 7.38%
ChinaSports and Swiber continue the uptrends which contributed to the increase in unrealised profit for today.
Have a Happy and Fruitful Mid Autumn Festival!
Monday, 24 September 2007
Own transactions
Sold 1,000 EZRA
The share price of EZRA has weakened for the past week since it announced the S$162.4 Million Order for a Multi-Functional Support Vessel. I feel that it is not wise to go against the general downtrend at the moment so decided to lock in the small profit.
The immediate concerns for investors would be how the Company fund this sophisticated equipment. It could use the proceeds from the partial disposal of EOC, alternatively, it could raise fund by share placement and lastly combining internal funds plus borrowings.
In any case, the market does not seem to appreciate this latest move. The huge capital outlay would leave shareholders who are expecting some kind of cash distribution from EOC listing disappointed. To do share placement would dilute the earnings further. Lastly the borrowings would increase the gearing of the Company and investors would need to price in some credit risk premium.
The share price of EZRA has weakened for the past week since it announced the S$162.4 Million Order for a Multi-Functional Support Vessel. I feel that it is not wise to go against the general downtrend at the moment so decided to lock in the small profit.
The immediate concerns for investors would be how the Company fund this sophisticated equipment. It could use the proceeds from the partial disposal of EOC, alternatively, it could raise fund by share placement and lastly combining internal funds plus borrowings.
In any case, the market does not seem to appreciate this latest move. The huge capital outlay would leave shareholders who are expecting some kind of cash distribution from EOC listing disappointed. To do share placement would dilute the earnings further. Lastly the borrowings would increase the gearing of the Company and investors would need to price in some credit risk premium.
Virtual Fund Performance
Sum invested = $540,850
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $31,410 = 6.28%
The contributor for the significant improvement in the portfolio today is Jiutian. It jumped 21 cents or 7.4%.
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $31,410 = 6.28%
The contributor for the significant improvement in the portfolio today is Jiutian. It jumped 21 cents or 7.4%.
Friday, 21 September 2007
2nd Batch Virtual Fund Transactions
Further Bought:
50,000 BH Global Marine @$0.755 = $37,750
50,000 C&G Industrial @$0.59 = $29,500
50,000 Foreland @$0.50 = $25,000
10,000 Labroy Marine @$2.44 = $24,400
20,000 Midas @$1.41 = $28,200
50,000 Sihuan @$0.76 = $38,000
20,000 Swiber @$3.12 = $62,400
22,000 Tiong Woon @$1.05 = $23,100
Sum invested = $540,850
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $15,000 = 3%
50,000 BH Global Marine @$0.755 = $37,750
50,000 C&G Industrial @$0.59 = $29,500
50,000 Foreland @$0.50 = $25,000
10,000 Labroy Marine @$2.44 = $24,400
20,000 Midas @$1.41 = $28,200
50,000 Sihuan @$0.76 = $38,000
20,000 Swiber @$3.12 = $62,400
22,000 Tiong Woon @$1.05 = $23,100
Sum invested = $540,850
Cash holding = $79
Realised profit = $40,929 = 8.18%
Unrealised profit = $15,000 = 3%
Virtual Fund Transactions
Bought:
50,000 Jiutian Chemical @$2.75 = $137,500
Sold:
500,000 CapitalandDBeCW80121 @$0.17 = $85,000
500,000 CoscoCorpBNPeCW080204 @$0.085 = $42,500
Sum invested = $272,500
Cash holding = $268,429
Realised profit to-date = $40,929 = 8.18%
50,000 Jiutian Chemical @$2.75 = $137,500
Sold:
500,000 CapitalandDBeCW80121 @$0.17 = $85,000
500,000 CoscoCorpBNPeCW080204 @$0.085 = $42,500
Sum invested = $272,500
Cash holding = $268,429
Realised profit to-date = $40,929 = 8.18%
Forbes Top 200 Companies in Asia Pacific
The following Singapore companies made it to the list:
- Asia Enterprises (vested)
- ASL Marine
- Best World
- BH Global Marine
- China Sun Bio-Chem
- CSE Global
- EZRA (vested)
- Food Empire
- Hongguo International
- Inter-Roller
- Jiutian Chemical (vested)
- Labroy Marine
- Midas (vested)
- Midsouth
- Multi-chem
- Raffles Education (vested)
- Raffles Medical
- Rotary Engineering
- Tat Hong
- Unisteel technology
I have invested in 5 of the above companies. Many were previously in my portfolio.
- Asia Enterprises (vested)
- ASL Marine
- Best World
- BH Global Marine
- China Sun Bio-Chem
- CSE Global
- EZRA (vested)
- Food Empire
- Hongguo International
- Inter-Roller
- Jiutian Chemical (vested)
- Labroy Marine
- Midas (vested)
- Midsouth
- Multi-chem
- Raffles Education (vested)
- Raffles Medical
- Rotary Engineering
- Tat Hong
- Unisteel technology
I have invested in 5 of the above companies. Many were previously in my portfolio.
Thursday, 20 September 2007
Virtual Fund Transactions
Bought:
100,000 ChinaSports @$1.35 = $135,000
500,000 CapitalandDBeCW80121 @$0.17 = $85,000
500,000 CoscoCorpBNPeCW080204 @$0.095 = $47,500
Sum invested = $267,500
Cash holding = $278,429
Realised profit to-date = $45,929 = 9.18%
100,000 ChinaSports @$1.35 = $135,000
500,000 CapitalandDBeCW80121 @$0.17 = $85,000
500,000 CoscoCorpBNPeCW080204 @$0.095 = $47,500
Sum invested = $267,500
Cash holding = $278,429
Realised profit to-date = $45,929 = 9.18%
Own Portfolio
Latest Football News
Thu, 20th Sep 2007
Chelsea Football Club and José Mourinho have agreed to part company today (Thursday) by mutual consent.
http://www.channelnewsasia.com/stories/afp_sports/view/300933/1/.html
Chelsea Football Club and José Mourinho have agreed to part company today (Thursday) by mutual consent.
http://www.channelnewsasia.com/stories/afp_sports/view/300933/1/.html
Tuesday, 18 September 2007
Happy Birthday to Me
No transactions to report for the day. I will have an early night cos I need to catch Liverpool match tomorrow at 2.30am. The new season of Champion League begins tonight. For those who stay up for the Fed decision, please take care. My personal view is that, whatever the outcome, the market is bound to fall eventually. Lets wait and see...
Monday, 17 September 2007
Today's Virtual Fund Transactions:
Disposed of all Put Warrants:
STI3500BNPePW070927: 500,000 @$0.13 Profit = $17,500
HSI21800BNPePW070927: 1,000,000 @$0.045 Profit = $5,000
DBS DBePW071001: 500,000 @$0.045, No Gain No Loss
Total Realised Profit to-date= $45,929 =9.18%
Sum invested = $0
Latest Cash Holding = $545,929
The decision to dispose of the entire equity porfolio proved timely. The STI was down by 60 points and therefore the put warrant made the most.
Tomorrow, market should be firmer ahead of the FOMC meeting. I have decided to clear all my position as the market could swing one way or another depending what Uncle Ben has to say.
Stay tuned for my next move.
Disposed of all Put Warrants:
STI3500BNPePW070927: 500,000 @$0.13 Profit = $17,500
HSI21800BNPePW070927: 1,000,000 @$0.045 Profit = $5,000
DBS DBePW071001: 500,000 @$0.045, No Gain No Loss
Total Realised Profit to-date= $45,929 =9.18%
Sum invested = $0
Latest Cash Holding = $545,929
The decision to dispose of the entire equity porfolio proved timely. The STI was down by 60 points and therefore the put warrant made the most.
Tomorrow, market should be firmer ahead of the FOMC meeting. I have decided to clear all my position as the market could swing one way or another depending what Uncle Ben has to say.
Stay tuned for my next move.
Saturday, 15 September 2007
Contradicting Singaporeans
Funny truth....
1. Nite - Sleep with air-con; Day - Bathe with heater on.
2. Day - Cannot Wake up; Nite - Cannot Sleep.
3. Translation is needed between Singaporean Chinese and Mainland Chinese.
4. Smell Of rubbish besides letterboxes; Rubbish inside Letterbox.
5. Spore Chinese use different languages other then Chinese to communicate.
6. Sporean never likes to vote, but like to complain.
7. There are quite a number of rich/poor in spore - They have Car, Credit Card, CPF but no Cash and are liable to lots of loans
8. Education - Teach Less Learn More.
9. There are quite a few high-tech barbaric Singaporeans -they know how to use state-of-the art equipment, 3g mobile phone and powerful computers but they don’t know how to use a simple dustbin or a toilet.
10. Half Sporeans rushed to buy Hello kitty, but the other half busy killing stray cats.
11. Chewing Gum - Can Chew, Cannot buy?? (Restricted to buying).
12. Cigarettes - Convenient to buy; not convenient to smoke.
13. Private Cars - Cheaper and Cheaper to buy, harder and harder to Maintain.
14. Public Bus - Half the Crowd squeeze in front section of the Bus, Second section is for Carrying Ghost.
1. Nite - Sleep with air-con; Day - Bathe with heater on.
2. Day - Cannot Wake up; Nite - Cannot Sleep.
3. Translation is needed between Singaporean Chinese and Mainland Chinese.
4. Smell Of rubbish besides letterboxes; Rubbish inside Letterbox.
5. Spore Chinese use different languages other then Chinese to communicate.
6. Sporean never likes to vote, but like to complain.
7. There are quite a number of rich/poor in spore - They have Car, Credit Card, CPF but no Cash and are liable to lots of loans
8. Education - Teach Less Learn More.
9. There are quite a few high-tech barbaric Singaporeans -they know how to use state-of-the art equipment, 3g mobile phone and powerful computers but they don’t know how to use a simple dustbin or a toilet.
10. Half Sporeans rushed to buy Hello kitty, but the other half busy killing stray cats.
11. Chewing Gum - Can Chew, Cannot buy?? (Restricted to buying).
12. Cigarettes - Convenient to buy; not convenient to smoke.
13. Private Cars - Cheaper and Cheaper to buy, harder and harder to Maintain.
14. Public Bus - Half the Crowd squeeze in front section of the Bus, Second section is for Carrying Ghost.
Friday, 14 September 2007
Disposed of Entire Virtual Share Fund and bought put warrants ahead of volatile week
3 Key events in US next week could make or break the recovery of global share markets:
(1) Fed meeting on 18 Sep - The billion dollars question: Will Fed cut interest rate? How much? What to expect next?
(2) Major Bank Earnings - Morgan Stanley to report on Wed and Goldman Sachs and Bear Sterns on Thurs.
(3) Expiring of Option and Futures Contracts (This is very "chim" to explain). The impact will probably not as big as the other 2.
The above factors could swing the global market in a big way. The rate cut has been priced in the recent market recovery. If Uncle Ben decides to do otherwise, investors will be done for. Bank earnings have also been widely estimated. What remains is negative surprises.
Due to all these uncertainties, I decided to unload my entire virtual share portfolio. I bought some put warrants in anticipation of a selldown.
Total realised profit = $23,429 = 4.69%
Warrants bought:
STI3500BNPePW070927: 500,000 @$0.095 = $47,500
HSI21800BNPePW070927: 1,000,000 @$0.04 = $40,000
DBS DBePW071001: 500,000 @$0.045=$22,500
Sum invested = $110,000
Cash Holding = $413,429
(1) Fed meeting on 18 Sep - The billion dollars question: Will Fed cut interest rate? How much? What to expect next?
(2) Major Bank Earnings - Morgan Stanley to report on Wed and Goldman Sachs and Bear Sterns on Thurs.
(3) Expiring of Option and Futures Contracts (This is very "chim" to explain). The impact will probably not as big as the other 2.
The above factors could swing the global market in a big way. The rate cut has been priced in the recent market recovery. If Uncle Ben decides to do otherwise, investors will be done for. Bank earnings have also been widely estimated. What remains is negative surprises.
Due to all these uncertainties, I decided to unload my entire virtual share portfolio. I bought some put warrants in anticipation of a selldown.
Total realised profit = $23,429 = 4.69%
Warrants bought:
STI3500BNPePW070927: 500,000 @$0.095 = $47,500
HSI21800BNPePW070927: 1,000,000 @$0.04 = $40,000
DBS DBePW071001: 500,000 @$0.045=$22,500
Sum invested = $110,000
Cash Holding = $413,429
Thursday, 13 September 2007
Noble Group - The Best Performing Blue Chip in SGX
For the second straight year, Noble Group has been named to the Forbes Fabulous 50, Forbes third annual compilation of Asia's best public companies.
To assemble the list, Forbes studied long-term profitability, sales and earnings growth, stock price appreciation and projected earnings for every company in the region with revenues or market capitalisation reaching $5 billion and above.
Noble is joined by new entrants Neptune Orient Lines and SembCorp Industries as the only three companies to appear listed on the Singapore Exchange. The Fabulous 50 List appears in the Sept 17 issue of Forbes Asia.
Indeed, Noble's share price has appreciated more than 800% if you had held the share since its IPO in 1997. It is still the best performing share within its market capitalisation category. During this period, Singtel appreciated a mere 20%, Capitaland 70% and even the bigger DBS +200%.
To assemble the list, Forbes studied long-term profitability, sales and earnings growth, stock price appreciation and projected earnings for every company in the region with revenues or market capitalisation reaching $5 billion and above.
Noble is joined by new entrants Neptune Orient Lines and SembCorp Industries as the only three companies to appear listed on the Singapore Exchange. The Fabulous 50 List appears in the Sept 17 issue of Forbes Asia.
Indeed, Noble's share price has appreciated more than 800% if you had held the share since its IPO in 1997. It is still the best performing share within its market capitalisation category. During this period, Singtel appreciated a mere 20%, Capitaland 70% and even the bigger DBS +200%.
Wednesday, 12 September 2007
Performance of Virtual Fund
Total sum invested $500,221
Cash Holding $579
Realised Gains = $800
Unrealised Gains = $20,429 = 4.09%
Cash Holding $579
Realised Gains = $800
Unrealised Gains = $20,429 = 4.09%
Tuesday, 11 September 2007
Why does CFO resign?
Jiutian announces resignation of its Chief Financial Officer:
http://info.sgx.com/webcorannc.nsf/ef3ba6cb188613ea482571b2003641d3/9343cc1eb0229f384825735200344249?OpenDocument
What I have to say below is not specifically directed to this particular announcement but my personal opinion of how people react to the announcement of this nature.
Whenever CFO or any key personnel in any organisations resigns, it always raises a few eyebrows. You need not look far. Recently there were rumours that Labroy Marine's Technical Director was leaving and the share price plummeted more than 10% on the day.
There are 2 school of thoughts to this kind of announcement:
1. Positive: The CFO leaves on his own accord to pursue his own interests (usually quoted as such)
2. Negative: The CFO is "forced" to resign because he knows something that the profession requires him to quit.
The first one is more straight forward. People do resign because they need to take a break to pursue other interests or careers. The current position maybe too stressful or he is not well rewarded. Other undisclosed reasons include the capability of the CFO to discharge the duties required of him. Maybe he refuses to travel or cannot cope with different culture and languages in a foreign country. Whatever it might be, this is good for shareholders because we all do not want a CFO who cant do the job and that it would only be bad for the company to keep him.
The second one is more tricky. It can sometime send the company's share price tumbling because the public perceives the management is up to no good and the CFO is compelled to leave. No kidding. We accountants are taught to leave a job, however well paid a job maybe, if we discover something or when we find ourselves in a situation where our professional ethics might be compromised.
In this modern world, CFO is the right-hand man of the CEO. Usually he is the first to know if anything is not proper. Because of the privileges we accountants enjoy, we also carry the same weight of responsibilities as those of a company director. Its not hard to find cases where CFOs or Finance Directors of commercial and charitable organisations convicted on criminal charges together with the number one man at the helm.
Maybe SGX should consider making the CFO to disclose the "real" reason for leaving the company, just like what is going to be required by directors soon. That would make the announcement more transparent and it could minimise the damage that it might cause to the company.
China and India are reported to be short of qualified accountants. Indeed, qualified accountants with technical and good soft skills are hard to come by. Good accountants are not just good at interpreting accounting standards or reading financial statements. What is equally important is his ability to understand the business operations and be able to deal and connect to different group of people and personnel in the organisations. This is what I call the soft skills.
Accountants are generally not good at expressing themselves, myself included. I have been to AGMs and I have seen how accountants are grilled by shareholders and the CEO or directors have to shield him from further embarrassment due to the lack of understanding of the business the company is in or the general knowledge of the industry.
As an accountant, I make no excuse for myself. Ever since I quit my audit profession to join the commercial world, i have to constantly remind myself to learn the business skills as much as keeping myself abreast with the latest corporate developments. I always force myself to understand the various aspects of the business operations. My boss always get me involved in key decision making as he feels that I am in the best position to evaluate any course of action. At the end of the day, the management decision must take into account dollars and sense because that's how the management is being measured by shareholders.
For those accountant wannabe, please ensure you acquire the relevant technical skills, after that the soft skills will get you far. Good luck!
http://info.sgx.com/webcorannc.nsf/ef3ba6cb188613ea482571b2003641d3/9343cc1eb0229f384825735200344249?OpenDocument
What I have to say below is not specifically directed to this particular announcement but my personal opinion of how people react to the announcement of this nature.
Whenever CFO or any key personnel in any organisations resigns, it always raises a few eyebrows. You need not look far. Recently there were rumours that Labroy Marine's Technical Director was leaving and the share price plummeted more than 10% on the day.
There are 2 school of thoughts to this kind of announcement:
1. Positive: The CFO leaves on his own accord to pursue his own interests (usually quoted as such)
2. Negative: The CFO is "forced" to resign because he knows something that the profession requires him to quit.
The first one is more straight forward. People do resign because they need to take a break to pursue other interests or careers. The current position maybe too stressful or he is not well rewarded. Other undisclosed reasons include the capability of the CFO to discharge the duties required of him. Maybe he refuses to travel or cannot cope with different culture and languages in a foreign country. Whatever it might be, this is good for shareholders because we all do not want a CFO who cant do the job and that it would only be bad for the company to keep him.
The second one is more tricky. It can sometime send the company's share price tumbling because the public perceives the management is up to no good and the CFO is compelled to leave. No kidding. We accountants are taught to leave a job, however well paid a job maybe, if we discover something or when we find ourselves in a situation where our professional ethics might be compromised.
In this modern world, CFO is the right-hand man of the CEO. Usually he is the first to know if anything is not proper. Because of the privileges we accountants enjoy, we also carry the same weight of responsibilities as those of a company director. Its not hard to find cases where CFOs or Finance Directors of commercial and charitable organisations convicted on criminal charges together with the number one man at the helm.
Maybe SGX should consider making the CFO to disclose the "real" reason for leaving the company, just like what is going to be required by directors soon. That would make the announcement more transparent and it could minimise the damage that it might cause to the company.
China and India are reported to be short of qualified accountants. Indeed, qualified accountants with technical and good soft skills are hard to come by. Good accountants are not just good at interpreting accounting standards or reading financial statements. What is equally important is his ability to understand the business operations and be able to deal and connect to different group of people and personnel in the organisations. This is what I call the soft skills.
Accountants are generally not good at expressing themselves, myself included. I have been to AGMs and I have seen how accountants are grilled by shareholders and the CEO or directors have to shield him from further embarrassment due to the lack of understanding of the business the company is in or the general knowledge of the industry.
As an accountant, I make no excuse for myself. Ever since I quit my audit profession to join the commercial world, i have to constantly remind myself to learn the business skills as much as keeping myself abreast with the latest corporate developments. I always force myself to understand the various aspects of the business operations. My boss always get me involved in key decision making as he feels that I am in the best position to evaluate any course of action. At the end of the day, the management decision must take into account dollars and sense because that's how the management is being measured by shareholders.
For those accountant wannabe, please ensure you acquire the relevant technical skills, after that the soft skills will get you far. Good luck!
Performance of virtual fund on 6th Anniversary of 9-11
Unrealised Gains = $13,760
Realised Gains = $800
Total Gains to-date= $14,560 = 2.91%
On this day 6 years ago, I lost around $20,000 and it took me 3 months to recover the amount.
It was a bad day for the global financial markets but it was a good personal experience learnt.
Realised Gains = $800
Total Gains to-date= $14,560 = 2.91%
On this day 6 years ago, I lost around $20,000 and it took me 3 months to recover the amount.
It was a bad day for the global financial markets but it was a good personal experience learnt.
Ezra to sell 40% of EOC before Oslo Listing
Ezra to sell 40% of unit headed for Oslo mainboard listing MARINE group Ezra Holdings is selling a 40 per cent stake in EOC Ltd for up to 1.068 billion Norwegian kroner ($282 million), a move that will make its production and construction unit the first Singapore company to list on the mainboard of the Oslo Stock Exchange. Mr Lee: EOC's listing in Oslo will also enable the company to tap new sources of funding Ezra, which owns 88 per cent of EOC, said yesterday that it is selling up to about 44.5 million EOC shares through private placement to institutional and professional investors at an indicative price range of 22-24 Norwegian kroner per share. EOC currently trades on the over-the-counter (OTC) of the Oslo exchange. This is expected to raise gross proceeds of S$258-282 million and pare Ezra's stake in EOC to 48 per cent. The actual pricing will be determined through a book-building process by Pareto Securities ASA that will run from Sept 10 to 19. 'The sale is in line with our asset-light strategy,' Ezra's managing director Lionel Lee said. 'EOC's separate mainboard listing in Oslo will also enable the company to tap new and diversified sources of funding to accelerate its growth in line with the buoyant demand for offshore construction and production support vessels.' Mr Lee noted that the placement of EOC shares to investors in Norway and internationally will ensure a sound investor support. EOC's European listing is also strategic for the group as it will enhance its overall position in the North Sea, South America and West Africa markets. One of the conditions for the Oslo mainboard listing is that EOC must have a free float of at least 25 per cent of the shares admitted to listing. Ezra said members of EOC's board and management will be pre-allocated a maximum of 4.5 million shares. 'The placement will facilitate EOC's upgrade to the mainboard and will enable the group to raise its profile among investors as a high-growth company in the construction and FPSO (floating production storage and offloading) segment of the offshore oil and gas industry,' said EOC's managing director KK Lim. EOC's mainboard status wiill allow it to tap on a wider range of funding possibilities to finance its future growth plans as it carves out a niche in the medium to deepwater projects, he added. EOC, which provides offshore fabrication, commissioning and transportation services to the oil and gas industry, currently manages two heavy lift accommodation crane barges and recently took delivery of a pipe-lay and accommodation vessel called the Lewek Champion. Ezra manages 25 vessels comprising anchor handling tug supply vessels (AHTS), anchor handling tugs (AHTs), crewboats, barges and a pipelaying vessel.
Courtesy of CNA Forumer
Courtesy of CNA Forumer
Monday, 10 September 2007
Transactions for Virtual Portfolio 10/09/07
Sunday, 9 September 2007
Sharing with you the following posts in one of the share forums:
People always worry
On weekend, they worry about monday.
On monday, they worry about tuesday..
On tuesday, they worry about wedsnesday..
2 Years ago, they worried about inflation.
Year ago, they worried about oil price.
Today they worry about subprime and credit.
tomorrow, they are going to worry abt something... but Market goes on.
Even filthy rich also has worry. Buffet worries he can get a good successor. Others worry they dont have a son to take over their wealth. The bears worry that they will be caged for their biles.
Story of " 杞人忧天“ 。。。 - long long ago in china, a person from qi keep worry that the sky will fall.
1997 : - Hongkong returned back to china mainland, people say hongkong going to finish. Now ?
1999 : - lots of dooms day tellers say 1999 end of the world, bible predicted it. Now?
2001 : - US WTC kena attacked, many say world war III coming , now ?
People always worry
On weekend, they worry about monday.
On monday, they worry about tuesday..
On tuesday, they worry about wedsnesday..
2 Years ago, they worried about inflation.
Year ago, they worried about oil price.
Today they worry about subprime and credit.
tomorrow, they are going to worry abt something... but Market goes on.
Even filthy rich also has worry. Buffet worries he can get a good successor. Others worry they dont have a son to take over their wealth. The bears worry that they will be caged for their biles.
Story of " 杞人忧天“ 。。。 - long long ago in china, a person from qi keep worry that the sky will fall.
1997 : - Hongkong returned back to china mainland, people say hongkong going to finish. Now ?
1999 : - lots of dooms day tellers say 1999 end of the world, bible predicted it. Now?
2001 : - US WTC kena attacked, many say world war III coming , now ?
Buying a blender
My wife bought a multi function blender at a departmental store this afternoon. The blender is made in Japan. The usual price is $120 but today special promotion at only $69 with free filter.
The promoter was pretty good with the demo and was surrounded by a big group of housewives and some uncles like myself. She diligently tried out one method after another and she had about 10 different types of food items to do the demo.
I was convinced by the functionality of the machine so I asked my wife to get one. I feel that the price was cheap as I had seen it selling at more than $100 before. I thought many would follow suit and buy. To my surprise, out of the group of about 30 onlookers, only my wife bought it.
Interestingly, after my wife stepped aside to check the machine, 3 women came after her and asked her questions like: what is the price? is it really useful? is it really selling at bargain? does it really come with free gift etc?
I was thinking at one side. We were all there listening and witnessed the demo for 20 mins. Surely we heard and saw the same thing. Why these people want to get 2nd opinion? Maybe it has to do with the kiasu and kiasi mentality in general.
I recall my experience of recommending some shares to one of my ex colleagues. This lady in her 50s I suppose was quite loaded. I recommended some good companies like Midas and Raffles Education to her. At that time Midas was trading at below $0.30 and I myself bought more than 100 lots. No matter how hard I tried to convince her, she would not bite. She always had excuses such as China businesses are risky bla bla bla .. and I put that to her kiasi attitude.
More than 1 year gone by and Midas shot to $2 and Raffles Edu also had doubled in price. I met her on the street one day. She regretted not to heed my advice at that time or she would have made good money investing in Midas and Raffles Edu.
Recently I happened to talk to her on the phone. She asked me whether can buy Midas and Raffles Edu as both had corrected significantly prior to the recent market melt down as they were hit hard by untrue articles and rumuors.
So I tried to convince her to pick up some if she can afford to hold for medium term. She was sceptical and did not buy any at first. Last week she phoned me to say that she had finally picked up some Midas. However at that time, Midas had been hitting recent high, so much higher than the price I asked her to buy at around $1.23. She told me she did not want to regret again as she saw the price jumped from $1.20 to $1.45.
Go back to the blender story. I am sure some aunties will go back to check the price tomorrow to confirm whether it was really selling at 40% discount. And I am sure they would be kicking themselves and say "I should have bought it yesterday as it was so much cheaper"! Why cant people be more simple minded at times and take things at their face value. In Singapore, if you sell things too cheaply, people think it must be a junk.
It happens everywhere and everytime. Thats just human nature: Fear and Greed. As long as humans live, this will not die. Tomorrow market should trend downwards again and many people would panic and sell low again. Before they recovered from their shock, big boys would come and push up the prices and they would then start to chase again by paying even more for the shares as they do not want to miss the boat.
Now that Mr Chew has been accumulating Midas at the cheap, maybe its time we follow the big boys and see what it brings. Good luck!
The promoter was pretty good with the demo and was surrounded by a big group of housewives and some uncles like myself. She diligently tried out one method after another and she had about 10 different types of food items to do the demo.
I was convinced by the functionality of the machine so I asked my wife to get one. I feel that the price was cheap as I had seen it selling at more than $100 before. I thought many would follow suit and buy. To my surprise, out of the group of about 30 onlookers, only my wife bought it.
Interestingly, after my wife stepped aside to check the machine, 3 women came after her and asked her questions like: what is the price? is it really useful? is it really selling at bargain? does it really come with free gift etc?
I was thinking at one side. We were all there listening and witnessed the demo for 20 mins. Surely we heard and saw the same thing. Why these people want to get 2nd opinion? Maybe it has to do with the kiasu and kiasi mentality in general.
I recall my experience of recommending some shares to one of my ex colleagues. This lady in her 50s I suppose was quite loaded. I recommended some good companies like Midas and Raffles Education to her. At that time Midas was trading at below $0.30 and I myself bought more than 100 lots. No matter how hard I tried to convince her, she would not bite. She always had excuses such as China businesses are risky bla bla bla .. and I put that to her kiasi attitude.
More than 1 year gone by and Midas shot to $2 and Raffles Edu also had doubled in price. I met her on the street one day. She regretted not to heed my advice at that time or she would have made good money investing in Midas and Raffles Edu.
Recently I happened to talk to her on the phone. She asked me whether can buy Midas and Raffles Edu as both had corrected significantly prior to the recent market melt down as they were hit hard by untrue articles and rumuors.
So I tried to convince her to pick up some if she can afford to hold for medium term. She was sceptical and did not buy any at first. Last week she phoned me to say that she had finally picked up some Midas. However at that time, Midas had been hitting recent high, so much higher than the price I asked her to buy at around $1.23. She told me she did not want to regret again as she saw the price jumped from $1.20 to $1.45.
Go back to the blender story. I am sure some aunties will go back to check the price tomorrow to confirm whether it was really selling at 40% discount. And I am sure they would be kicking themselves and say "I should have bought it yesterday as it was so much cheaper"! Why cant people be more simple minded at times and take things at their face value. In Singapore, if you sell things too cheaply, people think it must be a junk.
It happens everywhere and everytime. Thats just human nature: Fear and Greed. As long as humans live, this will not die. Tomorrow market should trend downwards again and many people would panic and sell low again. Before they recovered from their shock, big boys would come and push up the prices and they would then start to chase again by paying even more for the shares as they do not want to miss the boat.
Now that Mr Chew has been accumulating Midas at the cheap, maybe its time we follow the big boys and see what it brings. Good luck!
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