My Share Portfolio Review ~ December 2009

NEWS RELEASE - MIDAS RECEIVES PRESTIGIOUS INTERNATIONAL WELDING CERTIFICATION

NEWS RELEASE - MIDAS’ JV COMPANY NANJING SR PUZHEN RAIL TRANSPORT SECURES RMB1.56 BILLION CONTRACT

Etika buys Vietnam UHT milk producer

Written by Ellen Lokajaya
Monday, 23 November 2009

The Edge Malaysia

Greater spending power, a more open economy and, of course, the Vietnamese liking for ca phe sua da (iced coffee with milk) is driving Malaysian condensed milk producer Etika International to move into Vietnam in a big way. It intends to set up base there and launch more products across Indochina and North Asia.

In July, Etika acquired Tan Viet Xuan Joint Stock Co, a family-owned dairy milk processor, for US$8.7 million (RM29.5 million). Located in the Cu Chi suburbs of Ho Chi Minh City, Tan Viet Xuan produces ultra-high temperature (UHT) fresh milk, milk products and beverages that are sold in the country under the Vixumilk brand.

“The market in Vietnam is still in its infancy. There’s a big potential to grow because consumption of milk per capita is rela­tively low,” says Kamal Tan, group CEO of Etika.

Tan says Etika had explored the possibility of making a foray into the Indochina market some years ago, when the Vietnamese dairy industry was still tightly regulated. Tan Viet Xuan came into the picture late last year through an introduction by a friend, although nothing happened until a few months ago when negotiations for its acquisition began in earnest.

The deal, which has fuelled interest among analysts and investors over Etika, comes at a time when the company is expanding rapidly from being a manufacturer of milk products to a regional F&B player. One of the world’s largest producers of sweetened condensed milk, Etika now has four main divisions comprising dairies, frozen food, packaging, and nutrition and beverage.

Etika’s dairies division manufactures milk products ranging from UHT milk and sweetened condensed milk to evaporated milk and flavoured milk drinks under its Dairy Champ brand and sells them to wholesalers, supermarkets and coffeeshops in Malaysia and worldwide. In the frozen food segment, Etika’s bakeries and butcheries sell meat and frozen foods to hotels, airlines, fast-food chains and grocery stores under the Gourmessa brand.

For the nutrition and beverage segment, Etika markets branded sports-nutrition and weight-management food products under the Horleys, Sculpt and Pro-Fit brands in New Zealand and Australia, and produces carbonated and non-carbonated Polygold canned drinks and Air Bull energy drinks. Lastly, the packa­ging division manufactures tin cans as well as fully recyclable PET (polyethylene terephthalate) bottles.

Indeed, Etika’s growth has attracted the attention of Malaysia’s Kuok Group, which is headed by 85-year-old billionaire Robert Kuok and has interests ranging from media to property and shipping. In July, Kuok Group’s subsidiary, PPB Group Bhd, raised its stake in Etika to 5% from 4.67%, by exercising its warrants through its indirect wholly owned subsidiary Masuma Trading Co. Currently, Masuma has a 4.99% stake in the company, owing to dilution of shareholding after other shareholders exercised their warrants.

Although the interest shown by Kuok Group has fanned more excitement about Etika because of the group’s extensive interests in staple foods, Tan says so far there has been no collaboration between both companies. In any case, he has already mapped out plans to expand from Vietnam.

Launching pad into China

Apart from exporting its Vixumilk milk products to neighbouring countries like Cambodia and Laos, Etika plans to use Vietnam as a second base to export its products to the Philippines and Northern Asian countries like China.

Meanwhile, there are synergies that Etika and Tan Viet Xuan can exploit. “We can bring in our technology to improve their production and maybe reduce some of the costs,” says Tan. Also, its new Vietnamese unit could bene­fit from lower raw material costs with Etika’s volume purchases, he adds.

In return for Etika’s transferring its know­ledge on sweetened condensed milk production to its Vietnam plant, Tan Viet Xuan could share its expertise and experience in manufacturing ready-to-drink UHT milk with Etika.

Currently, Tan Viet Xuan’s utilisation rate for UHT milk processing is 40%, while its sweetened condensed milk utilisation rate is 20%, says Tan. So, if there is a sudden surge in demand for Tan Viet Xuan’s sweetened condensed milk, the Ho Chi Minh facility can take on the extra processing load without having to increase capex drastically.

Tan Viet Xuan will also be able to tap Etika’s newly acquired expertise in the packaging and storage of UHT milk. In March, the company entered into a joint venture to set up a UHT Aseptic PET bottling plant in New Zealand. The NZ$6 million (RM14.7 million) facility will bottle an assortment of dairy pro­ducts, including vitamin-fortified flavoured milk drinks, lactose-free milk, ready-to-drink liquid infant formula and standard UHT milk for Etika as well as other brands. Stored in plastic bottles instead of cartons or tin cans, these milk products have a longer shelf life and can be transported without refrigeration.

In FY2009 ended Sept 30, Etika’s revenue rose 1.4% y-o-y to RM600.6 million, while earnings jumped 52.4% to RM61.5 million. Tan says although sales volume for its dairy products has risen 16.9% in Malaysia and the company’s export markets, its average net selling price was much lower than that in 2008, as retailers asked for prices to be reduced in line with the fall in most commodity prices.

Overall sales for its dairy products in Southeast Asia fell 7.6% y-o-y, owing to a delay in the processing of customs paperwork to allow the import of condensed milk into Indonesia. Even so, the company’s gross profit margin improved 3.3% as the prices of key raw materials such as skim milk powder, whey powder and palm oil fell.

The company recently acquired PT Vi­xon Indonesia, an Indonesian distributor of its sweetened condensed milk and other consumer items such as medicine and F&B products. Tan says the acquisition will strengthen Etika’s distribution network, especially in Jakarta, where its Dairy Champ sweetened condensed milk is still overshadowed by local popular brands like IndoMilk and Frisian Flag (more popularly known as Susu Bendera). “We do have distributors in Indonesia, but nothing beats our own people and our own organisation there selling and marketing our products,” says Tan.

NRA Capital’s analyst Angelia Phua notes in an Aug 31 research report that the Vietnam acquisition “is expected to contribute positively to Etika’s bottom line by FY2010, although we expect the initial contribution to be meagre”. Phua says once Etika starts improving Tan Viet Xuan’s production efficiency and marketing, profitability should lift further, which would likely “come through only by FY2011”.“New market access of Dairy Champ products into Vietnam is also expected to bring about additional revenue stream to the group,” adds Phua.New products, facilities in Malaysia

Meanwhile, Tan is building up other revenue streams in Malaysia. Etika has just launched a new beverage named Juice Milk, which is milk with 10% to 15% of fresh fruit juice. The new product currently comes in yoghurt, pineapple, apple, orange and cranberry flavours. Although Juice Milk retails at RM2 for a 250ml can, which is more expensive than soda drinks, which cost RM1.50, it offers a much healthier choice, says Tan. In the next couple of months, new flavours like peach and mango will be rolled out.

Etika is also expanding its frozen-food division. The company shifted its bakery to a new 30,000 sq ft plant in Meru, Klang, where it will be able to expand its product range and produce larger volumes of frozen dough and other bakery products for the domestic market and for export in the future. Its butchery has taken over the 12,000 sq ft of space vacated by the bakery. The company also plans to expand its cold room and dry storage facili­ties in Glenmarie, Shah Alam by 3QFY2010 and construct new cold rooms and warehouse facilities in Penang by 2QFY2011.

Tan and his brothers, Etika’s chairman Jaya Tan and Tajuddin Tan, who passed away in 2005, founded the company more than a decade ago. They also own Catalist-traded Lasseters International, which operates resorts, taverns as well as casinos in Australia.

NRA Capital’s Phua says in her research report last week that growth for the company will still come from its dairies division “through better market penetration of sweetened condensed milk under the Dairy Champ brand in existing and new markets [such as Vietnam] as well as the introduction of new products [such as Juice Milk drink and other flavoured milk drink]”.

“In view of strong FY2009 results and a positive business outlook, we have upgraded our FY2010 earnings forecast,” says Phua. For FY2010, NRA forecasts Etika’s revenue to climb 16% y-o-y to RM699.3 million, and earnings to rise 26% to RM77.2 million. For FY2011, it expects the company’s revenue to grow 13% y-o-y to RM792.2 million, and earnings to increase 16% to RM89.6 million.

NRA Capital has maintained its “buy” call on Etika, but has revised its target price to 61.5 cents from 43 cents. Based on current levels, the company is trading at 3.3 times the forecast earnings for FY2010 and 2.9 times that of FY2011.

This article appeared in Corporate page of The Edge Malaysia, Issue 782, Nov 23-29, 2009.

Raffles Education - Proposed Transaction

Transaction of My Portfolio

Bought Etika at $0.43

Abterra considers dual listing in Hong Kong Stock Exchange

It seems that there are 2 quickest ways to create value for shareholders in Singapore context:

1) just tie-up with Tan Kim Seng (the founder of KS Energy).. read the many success stories..
2) propose dual listing in HK, Taiwan or US

China XLX Fertiliser just demonstrated how the value of shareholders is enhanced by a whopping 50% today after the HKSE debut.

I expect more Companies to follow suit. Luckily I have 3 such stocks in my portfolio:
Oceanus: Taiwan listing, just obtained approval
Midas: Hong Kong listing by middle of next year
Abterra: Hong Kong listing as it has a strong Hong Kong based parent company

Huat ah!

End of November Share Portfolio Review

Latest Holding of My Portfolio ~ November 2009

Abterra
Biosensors
China Zaino
Oceanus
Qianhu
Yongnam
Asia Enterprise
Midas
Raffles Education

Abterra Q3 Results Media Release

Transaction of My Portfolio

Sold all Hongguo International at 0.315.

Oceanus Q3 2009 Results Press Release

Yongnam Q3 Results

Yongnam Holdings, the structural steel contractor and specialist civil engineering solutions provider, today reported a 68.2% surge in profit after tax to $11.2 million in the three months ended September 30, 2009 (3QFY2009), from $6.7 million recorded in the previous corresponding period (3QFY2008). The stronger bottomline was achieved despite a 14.2% decline in the group’s topline from $96.3 million in 3QFY2008 to $82.6 million in 3QFY2009.

On a cumulative basis, the group recorded increases in both its top and bottomlines. Profit after tax jumped 58.7% from $20.2 million in the nine months ended September 30, 2008 (9MFY2008) to $32.0 million in the nine months ended September 30, 2009 (9MFY2009). Revenue increased 15.6% from $230.0 million in 9MFY2008 to $265.8 million in 9MFY2009, largely due to the many ongoing mega infrastructural projects the group is working on.

Yongnam says Structural Steelworks maintained its position as the key contributor to the group’s total revenue, albeit a contraction in revenue for this quarter. Revenue for this division fell 17.7% from $67.4 million in 3QFY2008 to $55.5 million in 3QFY2009, as the increased activities at the Marina Bay Sands Integrated Resort were insufficient to offset the substantial completion of the Dubai Metro Rail and the New Delhi Airport projects. This division contributed 67.2% of the group’s total revenue in 3QFY2009.

The group’s Specialist Civil Engineering recorded a marginal 6.0% decrease in revenue from $28.8 million in 3QFY2008 to $27 million in 3QFY2009. This was mainly due to the substantial completion of the MBS IR projects, offset by the commencement of works at the Marina Coastal Expressway (MCE) C485 project – the group’s single largest contract-to-date valued at $185.5 million. The remaining 32.8% of the group’s total revenue in 3QFY2009 was derived from this division.

As at September 30, 2009, Yongnam says its group’s order book stood at $540 million, a record- breaking figure surpassing the $517 million achieved in end March 2009. Supported by a strong order book, it is optimistic that it will continue to perform well in the next 12 months.

BIOSENSORS’ Q2 FY2010 RESULT PRESS RELEASE

Press Release - China Zaino to strengthen distribution network with 500 new DAPAI retail outlets

NEWS RELEASE - MIDAS’ THIRD QUARTER NET PROFIT RISES 17.4% TO S$9.4 MILLION

NEWS RELEASE - ASIA ENTERPRISES' 3Q09 NET PROFIT UP 158% Q-O-Q TO S$3.1M

RAFFLESEDUCATIONCORP POSTS NET PROFIT OF S$14.0 MILLION ON REVENUE OF S$51.6 MILLION FOR Q1FY2010

End of October Share Portfolio Review

Latest Holding of My Portfolio ~ October 2009

Abterra
Biosensors
China Zaino
Hongguo
Oceanus
Qianhu
Yongnam
Asia Enterprise
Midas
Raffles Education

Qian Hu Q3 2009 Results Press Release

NEWS RELEASE - MIDAS WINS INTER-CITY HIGH-SPEED TRAIN CONTRACT WORTH RMB152 MILLION

End of September Share Portfolio Review

Latest Holding of My Portfolio ~ September 2009

Abterra
Biosensors
China Zaino
Hongguo
Oceanus
Qianhu
Yongnam
Asia Enterprise
Midas
Raffles Education

Remark: No changes from last month

NEWS RELEASE - MIDAS’ JV COMPANY NANJING SR PUZHEN RAIL TRANSPORT CLINCHES RMB1.76 BILLION CONTRACT

Biosensors Novel Polymer-Free Drug Coated Stent Demonstrates Significant Benefit in Efficacy Over Conventional Drug-Eluting Stent With Durable Polymer

Biosensors - LEADERS Two-Year Results Indicate Improved Safety and Efficacy of Biodegradable Polymer Technology over Conventional Durable Polymers

NEWS RELEASE - MIDAS PLANS SECONDARY LISTING ON THE STOCK EXCHANGE OF HONG KONG

China's growth - economic or accounting miracle?

Courtesy of Business Times Hock Lock Siew
Published September 1, 2009

By R SIVANITHY

BY now, most investors would be familiar with the China growth story - possibly 10 per cent GDP growth which has powered the country's stock markets' rise of more than 80 per cent this year alone. Even though there has been the occasional warning about a speculative stock market bubble, there is a smug belief that because this year is the 60th anniversary of the founding of the People's Republic of China, an image-obsessed government keen to cement the country's reputation as the next big economic powerhouse will do its utmost to ensure the party carries on - pretty much along the lines of the US, where the Treasury and Federal Reserve have pumped trillions into the system to keep Wall Street afloat and to keep up the appearance of a recovery.


This much is the conventional wisdom with regard to China - buy because you cannot lose, especially if the government is on your side. But conventional wisdom can always be challenged and for those who feel inclined to do a bit of probing, there's plenty to ponder.

Take the 8 per cent second-quarter growth which grabbed most of the headlines. Less conspicuous was that exports in June actually declined by 21.2 per cent year-on-year while first-half exports fell 20 per cent. These lesser-known figures beg the question: where did the growth come from?

The answer is, of course, the government. Late last year, a stimulus package equal to 14 per cent of GDP was launched to stimulate consumer demand and judging by the figures so far, it looks like it's working.

However, according to American Enterprise Institute visiting scholar John Makin, creative accounting plays a big part in creating the impression of robust growth.

In a recent article titled 'China: Bogus Boom?' (see http://www.aei.org/outlook/ 100061), Dr Makin wrote that the target 8 per cent annual growth figure will surely be achieved because the country's economic statistics are based on recorded production activity rather than expenditure growth, the latter defined as the sum of consumption, investment, government spending and net exports.

'The US stimulus package, for example, attempts to boost GDP by undertaking measures that will boost consumption, investment and government spending. China, however, decrees mea-sures that will generate recorded increases in production spending,' Dr Makin wrote.

'Once China had announced the 8 per cent growth target, it began to disburse funds directed at sharp increases in public works spending. It is important to understand that the disbursal of funds is recorded as GDP growth. So the government can easily control the pace of growth by the pace at which it releases funds that have already been allocated in the stimulus package to the creation of higher growth or production numbers,' he added.

'The same convention, counting production and shipments as de facto outlays by end-users, is employed with respect to retail sales data in China.

'Shipments to retailers are counted as retail sales on the apparent assumption that ultimately all goods shipped will be sold at some point in the future. China's nominal retail sales have been rising at a rate of around 15 per cent year-over-year over the first half of 2009 because that is the rate at which shipments to retailers have been occurring. There is very little data available to measure actual sales by recipients of the shipments to ultimate consumers.'

Quite correctly, Dr Makin questions the true health of the China economy and warns of inflationary pressure brought on by loose monetary policy.

Possibly the first - and only - broker to cast some doubt on the China 'miracle' story is DBS which, in its August Markets Update last week, warned against over-reliance on government support that it thinks can be withdrawn suddenly anytime over the next 12 months.

DBS also referred to the China market's high valuations, which it describes as 'unsustainable'. DBS is not wrong - according to Bloomberg's analytics, the Shanghai Composite sells for 31 times earnings and is supported by a paltry 1.4 per cent dividend yield, while the Shenzhen Composite's figures are much worse - 67 times earnings and 0.7 per cent dividend yield. Neither set of figures can be described as 'cheap', so the conclusion has to be that the market is expensive and is running on liquidity, much of which has been provided by the government. Such must have been the conclusion reached by most investors who yesterday sold off China stocks, dragging the major indices 7 per cent lower.

Given the high dependence of the local market on daily, minute-by-minute shifts in the Hang Seng Index, and because of the latter's reliance on events in China, local investors would thus do well to stay nimble and not place too much faith or money on the China growth story because the economic miracle could well be founded on an accounting miracle instead.

End of August 2009 Share Portfolio Review

Latest Holding of My Portfolio ~ August 2009

Abterra
Biosensors
China Zaino
Hongguo
Oceanus
Qianhu
Yongnam
Asia Enterprise
Midas
Raffles Education

MEDIA RELEASE - ABTERRA STRENGTHENS IRON ORE SUPPLY CHAIN WITH LATEST INDONESIAN ACQUISITION

Transaction of My Portfolio

Bought today Yongnam @ $0.315.

Transaction of My Portfolio

Sold all Sihuan at $0.96 today due to buyout offer. Average cost was around $0.70..too bad not able to keep this gem much longer.

NEWS RELEASE - RAFFLESEDUCATIONCORP POSTS NET PROFIT OF S$51.1 MILLION ON REVENUE OF S$202.0 MILLION FOR FY2009

VOLUNTARY CONDITIONAL CASH OFFER BY CHINA PHARMA LIMITED FOR THE SHARES IN SIHUAN PHARMACEUTICAL HOLDINGS GROUP LTD.

NEWS RELEASE - MIDAS POSTS 10.1% GROWTH IN NET PROFIT TO S$9.4 MILLION IN 2Q2009

Press Release - China Zaino achieves RMB 171.1 million net profit in 1H2009

NEWS RELEASE - MIDAS STEPS UP CAPACITY EXPANSION TO MEET MARKET DEMAND

End of July 2009 Share Portfolio Review

Transactions of My Portfolio

Sold today:
ChinaTaisan

Bought:
Hongguo International @$0.31


Latest Holding of My Portfolio ~ July 2009

Abterra
Biosensors
China Zaino
Hongguo
Oceanus
Qianhu
Sihuan
Asia Enterprise
Midas
Raffles Education

Oceanus’ profit up 16% to RMB209.3 million

Biosensors - 1Q FY2010 FINANCIAL RESULTS BRIEFING AND COMPANY'S UPDATE SLIDES

Transaction of My Portfolio

Sold all First Lease Shipping Trust @ $0.66


I have sold off the 2 shipping trusts over the past few days. FSL has announced that it will cut quarterly DPU to US$0.015. It is apparent that the trust has to start seeking for money somewhere to fund its acquisitions. Rickers may have a bigger credit issue on hand due to its aggressive expansion plan and the lack of funds.

As the share prices have doubled from my average costs, I just took some profits and look for other opportunities. The rising share prices coupled with shrinking DPUs make the investments less appalling.

Stay tuned for my next move....

Qian Hu Q2 FY09 Results Press Release

Transaction of My Portfolio

Sold all Rickmers Maritime today @$0.535

NEWS RELEASE - MIDAS' SHARE PLACEMENT MEETS WITH OVERWELMING RESPONSE; S$90.6 MILLION RAISED TO FUND EXPANSION PLANS

NEWS RELEASE - MIDAS SECURES ADDITIONAL FABRICATION CONTRACT WORTH RMB48 MILLION

Transaction of My Portfolio

Sold Lizhong Wheel.

NEWS RELEASE - MIDAS CLINCHES FOUR CONTRACTS WORTH RMB86 MILLION

Why I bought or sold certain shares?

Some followers of my blog have been asking me why I sold counter A or why I bought Company B. I thought maybe i should try to answer those questions here at once...

Some of you may have noticed that i have been rather quiet over the past 9 months or so. I have not been writing anything about my investing thoughts and ideas. I chose to stay away from the market until the dust has settled. It was quite meaningless looking at the market then because what you heard and what you saw was just negative news all the time.

Over this period, major economic events unfolded, financial scandals popped up one after another, shares around the world fell to the bottom and now have risen nearly 50% from the lows. I used the low period to spend more quality time with my family. After the Singapore F1 night race, i begin to pick up F1 racing. Following the sport developments and watching the race on tv with my son is certainly more fun than reading financial news.

Some forumers commented on the waves of financial turmoil and company specific misfortunes. Many believed that they seemed to know more than the average people on the street. A lot more were and maybe still are licking their wounds, after seeing their fortune vaporized in thin air. I think everyone deserves some dignity. Many of you may have bought into S-chips just like me and got burnt big time. For those who do not have a plan B, they are probably still stuck and resigning to their fate. Try selling them another counter and they will give you that angry look.

The S-chip scandals never seem to end with one victim falling after another.. from fictitious bank balances, inflated profit figures to defaulting on personal loans leading to the fall of the companies. I met a Chinese national who used to work as a banker and his experience dealing with the various clients say it all.

I don't really know who else to trust. The brokers and the analysts are there to write up a story if they wish to sell the shares. If i read the companies' financial results, there were little telling signs. Revenue was growing, margin was healthy and cashflow was strong and some even paying good dividends. The market darlings not too long ago suddenly become junk stocks, cursed and dumped by investors like no tomorrow.

At the peak of the share market meltdown, my paper loss was close to 70% because my exposure to China shares was around 70%. Shares like China Energy, XLX Fertiliser and Jiutian Chemical which i used to make quite a fair bit initially succumbed to the weakening commodity prices and lower consumer demands. I did not hesitate to sell them off when i identified good opportunities elsewhere. Some asked why i disposed of the s-chips when the share prices were so low. Well, simple. I do not hesitate to cut loss if i have better opportunity to recover my losses elsewhere.

Even my beloved Raffles Education was not spared. The Oriental Century scandal really rocked the boat and the share price plummeted. Those who are interested to know more can read the stories from various sources. On hindsight, i am thankful because i graped that golden opportunity by loading up even more shares at below $0.30.

Midas was another classic example of needing a cool head where you are torn between greed and fear. I had the courage to take the plunge and parked with a significant portion of my emergency funds. I remembered adding a fair bits at the range of $0.30 to $0.35. Fundamentally, Raffles Education and Midas are my most trusted bets as they have not failed me all this while. The underlying businesses are still robust and growing amid at a slower pace. The Chinese government's committed spending on infrastructure projects certainly bode well for Midas. The flow of contracts recently are testimonial to that belief and i think it has a long way to go.

During the uncertain period, i also bought into First Lease Shipping Trust and Rickmers Maritime. These trusts were trading at very low prices and their dividend yields were close to 40% at that time. The revenue stream for the short to medium term is pretty safe because they have locked in the chartered rates. Despite the tightening of credit, they seem to be taking the initiative to come up with script dividend scheme and also lowering DPU with the aim to ease their cashflows. The market appears to have applauded the move and these trusts have outperformed even the STI in general.

The other star perfomer is Oceanus. After all the scandals, the stock selection process is simple. I just asked my China friend. Forget about technical or fundamental analysis. I just buy because he thinks it has huge potential, just like what the CEO claims. Personally, i happen to know one of the angel investors so the decision to buy was a lot easier.

One counter that appears too good to miss is Sinotel. After my Chinese friend's advice, i decided to give it a miss, despite all the positive write-ups at one of the prominent share investment website and strong buy recommendation from brokers. In his view, this kind of business is easy to do as long as you have the money to start and you have some connection. The market is too big and too competitive. He has shared a lot about the China corporate dealings with me. Not very far from the "Confessions of a S-Chip CEO" article that was circulated not too long ago.

After my portfolio restructuring, S-chips constitute only about 10% of my share portfolio now. The collective price appreciation of Midas, Raffles, Oceanus and the 2 shipping trusts have helped recover all my paper losses. In fact, i am sitting on small gain and the entire portfolio value is higher than before the start of Lehman Brothers collapse.

As to why I sold Swiber and Cacola. Because i bought Biosensors and more Abterra. I believe the latest acquisitions have better chance of making money than the former ones. Sure or not? Well, only time can tell. Like i said earlier, no one is to trust. I don't believe in having a pretty portfolio or having a very sound fundamental analysis. I salute those who bought into Osim and Ezion because they have done better than me. And probably that is all that matters at the end of the day.

So cheer up and have fun. Do your bit for charity if you have gained from this recent rally. I feel happy to be able to give. What about you?

Transactions of My Portfolio

Bought today:

Biosensors International @ $0.49

Added more: Abterra $0.055

MEDIA RELEASE – Abterra to benefit from rising coking coal prices

NEWS RELEASE - MIDAS ANNOUNCES FORAY INTO DOWNSTREAM FABRICATION WITH TWO CONTRACTS WORTH RMB73.8 MILLION

End of June 2009 Share Portfolio Review

Transactions of My Portfolio

Sold today: Swiber & Cacola


Latest Holding of My Portfolio ~ June 2009

Abterra
China Taisan
China Zaino
FSL Shipping Trust
Lizhong Wheel
Oceanus
Qianhu
Rickmers Maritime
Sihuan
Asia Enterprise
Midas
Raffles Education

NEWS RELEASE - MIDAS SECURES A RMB70 MILLION CONTRACT FOR ANOTHER INTER-CITY HIGH-SPEED TRAIN PROJECT

NEWS RELEASE - MIDAS SECURES TWO ADDITIONAL CONTRACTS WORTH RMB172 MILLION FOR INTER-CITY HIGH-SPEED TRAIN PROJECTS

Transactions of My Portfolio ~ 17 June 2009

Sold: Jiutian Chemical @$0.12

Bought: Abterra @$0.06

NEWS RELEASE - MIDAS SECURES TWO PRESTIGIOUS CONTRACTS WORTH RMB603 MILLION FOR ITS SINGLE LARGEST PROJECT ORDER TO-DATE

End of May 2009 Share Portfolio Review

Latest Holding of My Portfolio ~ May 2009

Cacola Furniture
China Taisan
China Zaino
FSL Shipping Trust
Lizhong Wheel
Oceanus
Qianhu
Jiutian Chemical
Rickmers Maritime
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education

Transactions of My Portfolio

Sold last week:

All Courage Marine @ $0.185


Bought today:

Oceanus @ $0.235

Swiber Q1 09 Result Press Release

Midas Q1 Results press release

Raffles Education - Q3 Results

End of April 2009 Share Portfolio Review

Latest Holding of My Portfolio ~ April 2009

Cacola Furniture
China Taisan
Courage Marine
China Zaino
Courage Marine
FSL Shipping Trust
Lizhong Wheel
Qianhu
Jiutian Chemical
Rickmers Maritime
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education

Sihuan Q1 2009 Results

China Zaino Q1 2009 Results

Rickmers Maritime Q1 2009 Results

Qian Hu Q1 2009 Result Press Release

Transactions of My Portfolio

Bought: Rickmers Maritime

End of March 2009 Share Portfolio Review

Latest Holding of My Portfolio ~ March 2009

Cacola Furniture
China Taisan
Courage Marine
China Zaino
Courage Marine
FSL Shipping Trust
Lizhong Wheel
Qianhu
Jiutian Chemical
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education

Swiber and US-based ICON to jointly own Victorious

MEDIA RELEASE: SIHUAN UNLOCKS VALUE FROM INVESTMENT IN DRUG DISTRIBUTOR

Transaction of My Portfolio

Added more:

Raffles Edu

Transactions of My Portfolio

Sold:
Pacific Shipping Trust

Added more:
FSL Trust
China Zaino

FSL Trust provides business update to investors

Swiber FY08 Result Presentation

China Taisan FY08 Result Press Release

End of Feb 2009 Share Portfolio Review

Latest Holding of My Portfolio ~ February 2009

Cacola Furniture
China Taisan
Courage Marine
China Zaino
Courage Marine
FSL Shipping Trust
Lizhong Wheel
Pacific Shipping Trust
Qianhu
Jiutian Chemical
Sihuan
Swiber
Asia Enterprise
Midas
Raffles Education

Lizhong FY08 Result Press Release

Midas FY08 Result News Release

Courage Marine FY08 Result Press Release

China Zaino - FY2008 Result Press Release

Sihuan FY 2008 Results Press Release

PRESS RELEASE: SIHUAN'S ROBUST BUSINESS MODEL TURNS IN RECORD NET ATTRIBUTABLE PROFIT OF RMB237M IN FY08

Courtesy of Hock Lock Siew

Published February 20, 2009
Extraordinary times call for extra clarity
By CHEW XIANG

WHERE do you hide a tree? In a forest. Where do you hide a poor quarter's performance? In the full-year results.

Six years after quarterly reporting was made mandatory for all but the smallest listed companies, a number of blue chips still did not separately reveal fourth quarter results in their financial statements for the full year ending Dec 31.

These aren't fly-by-night companies with things to hide. They include blue chips such as ST Engineering, Hyflux, ComfortDelGro, Singapore Land and its parent United Industrial Corporation. No doubt there are plenty more.

In normal times, separate figures for the fourth quarter along with the full year results would be something nice to have, rather than a necessity. Not having them doesn't breach SGX listing rule 705, which sets out companies' continuing obligations with regards to financial statements.
But, as Members of Parliament were keen to stress in the Budget debates this month, these are 'extraordinary times'. During the three months to December, every conceivable economic and financial indicator sank without trace; confidence went through the floor and is still puddling in depression; trade, jobs, clients and accounts receivable have all but vanished.

How companies fared in this disastrous quarter is important because that is likely to be a far better guide to their performance in the coming months than their full-year showing, which for many would have included three quarters of strong results. When Oct-Dec results for many companies are likely to be poor, focusing on full-year results can be misleading.

For instance, Hyflux on Wednesday reported a record net profit (up 79 per cent) and sales (up 187 per cent) for FY2008, a fact highlighted in a number of media reports. But much of the boost came in the first three quarters of the year; Q4 net profit actually fell 32 per cent year on year, from $19.6 million in 2007 to $13.4 million, due to higher impairments and cost of sales.

Both ChannelNewsAsia and Today stressed Hyflux's record full year earnings without mentioning its quarterly performance. But investors need to know the full picture, especially retail investors without access to professional data suppliers or a good range of analyst reports.
And not disclosing the quarter's performance runs the risk that mistakes get made. Predictably, some of those that tried to ferret out Q4 data got it wrong: DBS Vickers issued a report yesterday which said that net profit fell 42 per cent year-on-year; this newspaper reported a 41.7 per cent drop in Q4 earnings and so too did Bloomberg (42 per cent) and The Straits Times, which had quoted Bloomberg. The problem was that 2007 earnings had been restated and those that relied on the original financial statements were caught out.

Mistakes can be corrected in due time, but the confusion, especially for traders or investors in the stock, is indelible.

And right now, it's not just headline and bottom line figures that matter. Investors also need to know how balance sheets, debt levels and cashflows have been affected by the gyrations of the past four months, as well as details of how line items have responded. For instance: how much has receivables changed? How heavy were the impairments taken over the period?
They can of course compare nine-month financial statements with the full-year version and do some simple arithmetic, but why should they have to?

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Courtesy of Business Times

Published February 2, 2009
Why the Dow is holding at 8,000
By R SIVANITHY

TO MOST casual observers, the fact that the Dow Jones Industrial Average (DJIA) has bounced back every time it dipped below 8,000 points over the past few months - even when there is bad news - suggests that the 8,000 mark is where the 'support' or the magical 'market bottom' lies. This means that as soon as the index nears 8,000 on the downside, chartists and traders will start calling a 'buy' on the market.

The divisor: For every dollar an index stock falls, the DJIA falls 7.964782 points, regardless of the stock's capitalisation

Closer examination, however, reveals that the bounces around the 8,000 mark are simply a function of the way the index is constructed. Because the Dow is price-weighted, it is also inherently flawed.

In Thoughts from the Frontline weekly newsletter dated Jan 23, writer John Mauldin correctly points out that the divisor for the DJIA is 7.964782, which means that for every dollar an index stock falls, the DJIA falls 7.964782 points, regardless of the stock's capitalisation.

As a result, if the stock of Microsoft, with a price of US$17 and a market cap of US$156 billion, was to crash to zero, the DJIA would only lose 135 points (17x7.964782). But if the same was to happen to IBM, with a smaller market cap of US$124 billion but a higher share price of US$92, it would cost the index to lose a whopping 700 points.

Now consider the four financial stocks currently in the DJIA - Citigroup (US$3.90), Bank of America (US$6.78) Amex (US$16.70) and JPMorgan (US$25.43) - using last Thursday's prices.
If all four stocks were to crash to zero, the DJIA would only lose 300 plus points, not that huge a loss in the context of the market, yet imagine the repercussions on the US and global economies if these four institutions collapsed totally.

Most of the news on Wall Street these days centres on the crippled financial and auto sectors. But because the share prices of these companies are now so low, these stocks do not affect the DJIA by much (General Motors' shares, for example, are now just above US$3).

In other words, because the index stocks most affected by bad news are already battered to rock-bottom levels, the DJIA doesn't seem to fall much when bad news is released, thus giving the mistaken impression of resilience to adverse news and of strong support around 8,000 points.

By right, these financial and auto stocks should have been removed from the index, given that it has been past practice to replace stocks whose prices drop below US$10.

For some reason, the DJIA's guardians have been reluctant to do the same now, possibly because of the political fallout that might ensue - imagine the repercussions of removing pillars like Citigroup or General Motors.

This then leads to the inevitable conclusions: the DJIA is not comparable over time; the only reason the DJIA appears well-supported around 8,000 is because the collapsed financial and auto components have not been replaced as they should have been; and that movements in large-price stocks are magnified because the index is heavily skewed in favour of these counters.
If the index was to be correctly re-balanced by removing the battered financials and autos and replacing them with stocks with prices above US$10, you'd have to wonder whether the 8,000 mark would hold as well as it has.

You'd also have to dismiss arguments that it is safe to buy since the index is at its lowest level in many years because historical comparisons are invalid - unless, of course, the same re-balancings that were done in the past are performed now.

How to overcome such a large distortion? The most commonly accepted solution is to use market-cap weights, but this too has its drawbacks.

Last Thursday, the market-cap weighted Straits Times Index (STI) rose 0.64 of a point to 1,766.72, a move that a casual observer might interpret to indicate a mixed or quiet session. Far from it - if you stripped out warrants, the rest of the market only recorded 95 rises against 188 falls, a gain/loss ratio that indicated market weakness rather than a mixed session.

Peer beyond the numbers and it would have been readily evident that an 11-cent rise by big-cap SingTel to $2.76 pushed the STI up 11 points, thus creating the mistaken impression of a slightly firm or mixed market. Assuming SingTel had not risen and everything else remained the same, the STI would have recorded an 11-point fall, leading a casual observer to correctly surmise that the market had been weak that day.

Similarly, on Dec 29 last year, a sudden 87 per cent surge by CapitaMall Trust in the final minute of trading helped push the STI up 54 points, once again creating the mistaken impression of a session that was much stronger than it really was.

Still, using market-cap weights is probably a much better way to capture what's going in a stock market, at least for most of the time and over longer time periods. The alternative is to use price weights, which has been shown to lead to even more inaccurate conclusions.

On this last point, local investors - chartists and fundamentalists alike - would do well to take into account just how distorted a picture the price-weighted DJIA paints of the US economy and market, while also pondering whether 8,000 is really where its 'support' lies. If Dow at 8,000 is artificial, where does this leave the STI?

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