21 March 2018

FREE Portfolio Review for an online acquaintance

Date: 03/21/2018
Subject: Re: Portfolio Review


one of my fav bluechip counters which I have bought and sold some along the way. Banks are the pillars of the economy, thus if investing, bank shares are for serious considerations. Though in recent months, it seems to be capped at 28- 29 range. Hopefully, it breaks out from the 30 mark.

Keppel Corp 

After the recent years of diversification, Kep corp is not as dependent on oil as before. It is another good blue chip shares for consideration. The price has come down recently due to the bribery scandal in Brazil involving Keppel Corporation's offshore and marine unit. Still, overall it has transformed itself.


Not my favourite. Readership is on a constant decline, company struggling, new CEO is from NOL. Look at what happened to NOL eventually. On the other hand, perhaps there is a possibility of privatisation where price is higher than before.

If you are keeping SPH for dividends, why not consider SPH REIT?


noticed it has come down quite a fair bit. Charts look depressing. mainly due to a lower profit margin of only 8% in the first q of 2018. used to be 10 to 20% for the past several quarters. Thaibev has bought into some Vietnam businesses too. good for investing, picking it at a lower price.




quite similar to SPH, but slightly better due to business diversification and adaptation. Good to buy and hold for dividends, unlikely any short term gains.

Silverlake Axis 

the previous cofounder has sold his shares and exited the company. He has also started a similar company. So the price of Silverlake has not recovered since. Possible to recover if only there are other positive news as a catalyst.

Sabana Reit 

The dividend yield is about 6.5% pa. I don't follow this company closely but in general, it is the only shariah compliant counter for industrial properties.


telco industry is facing a 4th foreign player joining the industry; Zero1. It is offering unlimited data plans at the price of only $29.90 monthly, without contracts. The more impressive thing is, it matches SingTel plans.

investing wise, it is good because it is the largest player in the market. with dwindling market share among the players, the biggest market player will still be, the biggest player having the smaller pie. As such, the mentality is always to follow the market leader in hopes of lower risk.

Sembcorp Ind 

Market cap is smaller than Keppel Corp. a smaller bluechip for diversification waste management, utilities and marine. though the yield is 2.5%pa, the market cap is about S$5.8n. Keppel Corp is $14b

Ascott Reit 

good for investing CPF monies or for a cash investment. Dividend yield approximately 7% per annum. Personally, I like the business as it has hotels and service suits all over the world, creating a rather diversified business.

Date:        03/20/2018 12:57 PM
Subject:        Portfolio Review

Do hv a look at my current portfolio n make some recommendations?
I am especially keen on REITs n also some short-term trading.

Appreciate if you could revert by this week?


22 February 2018

Lee Metal privatisation deal - Congrats!

*Lee Metal
- Received a pre-conditional offer from BRC Asia at $0.42/share, or 1.09x P/B.
- The founding Lee family which owns 48.06% of share capital has given their undertaking for the voluntary offer.

Seems like all the good companies are being privatised.

Called for this counter since last year. Glad that all my followers made at least 43.5% gains from it. Thank you for your support and sharing with me.

Read more here http://sgstocksandshares.blogspot.sg/2017/03/lee-metal-at-least-6-dividends-since.html

21 February 2018

3 Steps to buy Bitcoin in Singapore, or anywhere else?

Bitcoin prices set new records this year and forecast to continue to increase until the end of the year. Moreover, 2017 shows that digital assets, in general, have risen dramatically and created a tremendously large market cap of $66 billion. Of which, Bitcoin accounts for nearly 50%.

Bitcoin trading volumes in the world are increasing sharply every day, and are becoming an alternative investment channel for many people besides traditional channels such as real estate and gold. It is also a good time to get involved before the Bitcoin price bump at the end of the year.

There are a few ways to go about participating and be part of the Bitcoin craze. Personally, I followed it briefly in 2008 and gave up subsequently. It is only the recent years (2016?), Bitcoin and its counterparts came into limelight.

So there are a few ways to go about buying Bitcoin. I shall share the simplest and straightforward way to do so.

Step 1

Open a Remitano account HERE

After that, you can choose to buy USDT from a list of local sellers.

(Tether is pegged to the United States Dollar – it operates as a currency board, holding United States Dollar in reserve and issuing a cryptocurrency token for each reserve dollar. The exchange rate is 1 Tether (USD₮) to 1 United States Dollar (USD$).)

Step 2

Open a HitBit account HERE

Step 3

Transfer the bought USDT to HitBtc platform

Once you have transferred, you can do the buy and sell trades accordingly. And just like that you will be able to participate and join the crypto rally.

I have included the links with my referral links. It will benefit you and me where you will receive some cash back. At the same time, it remunerates my effort to compile and educate. All the proceeds will be contributed to blog building and developments.

Thank you all for your support.

15 February 2018

Happy Lunar New Year!

SG market opens till 12pm today. Opens on 19th Feb. FYI.

Happy Lunar New Year,
May everyone happy and prosperous!

Singapore Stocks to Watch

* Low Keng Huat Singapore (LKH SP): Makes S$362M Enbloc Offer For Cairnhill Mansion
*Noble Group (NOBL SP): Said To Plan Asset Shuffle If Perpetual Holders Balk
*OCBC (OCBC SP): Upgraded to Outperform at Credit Suisse; PT S$14.70
*SATS (SATS SP): Downgraded To Neutral At Phillip Secs; Pt S$5.33
*Singapore Air (SIA SP): Jan. Passenger Load Factor 81.1% Vs 81.2% Y/Y
*StarHub (STH SP): Fourth Quarter Net Income S$14.1 Mln
* Valuetronics Holdings (VALUE SP): Raised To Buy At Rhb Research Institute

21 January 2018

Hock Lian Seng - trading at 5x Ex-(cash & investments) PE with 4 years of earnings visibility booked in

Our view: 
Currently no TP on it, as liked HLS due to its good dividend yield, and as we hope to ride it as a proxy to the pick up in local construction demand. We believe current valuations are backed by the earnings visibility it has for the next 4 years, dividend yield of 3.6-5%, and strong cash/investments of S$0.29/share. Upside will come from the sale of industrial property dev, and winning new contracts. 

Hock Lian Seng (HLS) is a BCA grade 1 contractor, with over 40 years of experience in the civil engineering and infrastructure projects in Singapore- with projects including MRT depots, bridges, expressways, water infrastructures and other specialised marine works.

Investment merits
A reputable civil engineering co. with over 40 years of experience and an established track record trading at 11.2x forward PE and ex(cash and investment securities) PE of 4.7x.

Strong balance sheet with net cash and investment securities of S$0.29/share (2016 mix: 84% corporate bonds, remaining in AFS equities) 

A near 100% cash company by end of 4 years? We estimate that the current order book if executed smoothly, may help HLS earn NPAT of S$22m/year for the next 4 years, and become a near 100% cash company by the end of the period, as it is trading at 4.7x forward ex(cash and investment securities) PE. (We assume HLS can sell out its industrial property shine@tuas which it is currently holding on its b/s at about S$96m- (believe will still incur more dev cost of about S$10-15m by the time it TOP), which will sort of net out the other liabilities in the balance sheet)

Positive industry outlook. (BCA projects the total construction demand to be awarded for 2018 to be between $26b-31b, up from $24.5b 2017E, driven by both private and public-sector projects. Major civil engineering contracts to be awarded include North-South corridor, new MRT works and deep tunnel sewage phase 2 etc)- Link to BCA press release

A dividend yield of 3.6-5%. HLS has proven to be a good pay master in the past, steadily increasing its dividend payment over the years, with at least S$0.01625 DPS since 2010. In 2016, Management declared a total DPS of S$0.125 (S$0.10 special dividend, S$0.025 normal dividend). Assuming it maintains its normal dividend of S$$0.018-0.025, translates to yield of 3.6-5% (which is well supported by its strong balance sheet and good cash flow generation)


Costs overrun, margins not as high as expected, inability to win contracts etc

Also noted that while historically the capex for HLS is quite low at S$1-3m/year, in 2016-2017, there is a huge rise in CAPEX as it purchase more PPE and build warehouse (mentioned for its ongoing projects)- not sure how much more it will still incur, which may reduce its cash pile abit, but if we view it positively, hopefully they are expanding their fleet too so they can bid for their other projects given the pick up in local construction demand and not just be tied down to the Changi airport projects. 


What we think HLS's earnings will be in the next 4 years?

Changi airport JV project with SCI only started contributing significantly in 3Q17. In its 3Q17 comments, HLS mentioned that the main rise in revenue (qoq and yoy) was due to the revenue contribution from the Changi airport JV project with SCI (where its 60% owned JV won a $1.1b contract from Changi airport which will run through 2022). In its 2Q17 commentary, contribution from this Changi airport JV is not yet significant, so 3Q17 was the first real quarter where revenue contribution from the project really kicked in (even though it was awarded only in Aug 16)

YE 31 Dec
cost of sales
Adjusted GP margin

**Adjusted GPM for 3Q16 were higher due to finalization of accounts for a few completed construction projects at end of defect liability period, such as Ark@Gambas, Ark@KB. 4Q16 GP was also helped by a $15m writeback of maintenance cost provision for completed projects (which we have already excluded in our adjusted GP calculation) 

If we have a look at the quarterly results, prior to 3Q17, sales were about S$23-30m, which we believe should be from projects such as Maxwell station, stabling yard at Gali batu etc.  Noted that this is a huge step up in sales and gross profit from 1Q and 2Q17. In its 3Q17 commentary, HLS attributed the rise in revenue mainly due to the contribution from the Changi Airport JV project. Hence, our 2 cents view is, it is reasonable to believe that the Changi Airport JV project has a much higher GPM than the other existing projects that HLS is currently working on.

Back of the envelope calculation
Assuming 1Q17 and 2Q17 revenue were derived mainly from projects such as Maxwell station etc (minimal contribution from Changi airport JV project), and these projects continue to contribute to HLS in 3Q17, we estimate the revenue and gross profit contribution from the new Changi JV project in 3Q17 to be about S$24m sales and S$5.6m in gross profit, implying a GPM for the project of about 23.6%. 

GP margin
Assumed average of 1Q17 and 2Q17 sales and gross profit (from other projects)
Assumed revenue contribution from new changi JV
3Q17 results

Based on the current order book of S$830m, we assume the mix of the order book is currently 
Order book
Blended GP margin mix: 19.8%
Changi JV
We less off the assume revenue contribution from the project in 3Q17

Others (eg. Maxwell station)

Based on the back of the envelope calculation, we assume the following
  • S$50m of sales per quarter (this will last them about 16 quarters or 4 years based on current order book of S$830m)
  • Assume GPM margin of about 18% (vs assumed order book mix blended GP margin mix of 19.8%)
  • Other costs (distribution, admin, other operating costs etc) per quarter of about S$2m. (From 1Q16 to 3Q17, other costs excluding change in fair value has been about S$1m-1.8m)
  •  Other income of S$0.75m/quarter (HLS recorded interest income from loans, investment securities of S$3.5-4.5m/year for 2015-2016)

Based on quarterly sales of S$50m, we estimate, HLS can recognised net profit of S$5.7m/quarter or S$23m/year. And the order book of S$830m, can last/provide earnings visibility HLS for another 4.2 years (assuming S$50m sales recognised per quarter)


Orderbook 830

no. of quarters it can be recognised 16.8

no. of years 4.2


Sales/quarter 49.5

GP/quarter 8.9
Assume GPM of 18%

Other costs/quarter -2


Increase in depreciation -0.8
PPE increased by S$16m in 9M17 due to acq of office units for own use, construction of warehouse, purchase of PPE to meet requirement of ongoing projects- We depreciate it over 5 years

Other income 0.75
interest income about $3-4m/year in 2015-2016

PBT per quarter 6.85

Tax (17%) -1.17

NPAT per quarter 5.69
11.5% NPM

Annual NPAT 22.8

GPM : Gross Profit Margin
PBT : Profits Before Tax
NPAT : Net Profit After Tax

14 December 2017

Fundamental BUY call: HongKongLand (H78) Target price $8.30

Hi All, this is our first (official) fundamental stock pick as we seek to create a place with both fundamental and technical ideas for sharing with investors and traders reading our blog. Welcome any feedback and ideas from our readers. 

We will also be including it in our model dummy fundamental portfolio to track the performance of our investment track record (mostly for our own learning purposes). For fun reading and sharing. Happy holidays! :)

Hong Kong Land

One of the largest property developer and investment group in Asia, owning and managing almost 800,000 sqm of prime office and retail property in key Asian cities. Hong Kong and Singapore made up bulk of the portfolio with 452,000 sqm (56%) and 165,000 sqm (20%) respectively.

FY16 Operating income by segment:
Commercial property: 77.8% (should be mostly investment property rental income)
Residential property: 22.2% (should be mostly property dev profits)

Source: HKL

My View: 
  • While this is just an over simplistic way of looking at the stock, I see HKL as a good proxy to the property market in HK, with its Grade A office assets in Central HK, that may benefit from the booming Chinese economy. Valuations are also backed by its grade A prime office and retail properties such as (Exchange Square, Forum, Jardine House etc in HK, and 33% owned One raffles Quay and MBFC in Singapore).
  • With P/B near a multi year low (0.5x), and potential for rise in dividend in the near term (given the dividend history and potential increase in rental income from contributions from new assets, and also multi year low net gearing), think HKL may be a good addition to my medium to long term portfolio at $7.22.
  • While waiting, I get a dividend yield of 2.6 % (based on current DPS of $0.19- same as CPF – might as well)

Investment merits:
Trading At 0.5x P/B (with most of its assets at prime locations in cities such as Hong Kong and Singapore), which is near a multi year low and -1SD of its 10 year range. Also attractive when vs its peers like CK asset, Swire properties and Champion REIT who are trading at 0.6-0.9x P/B.

P/B is near a multi-year low and -1SD of its 10 year range.

Source: Bloomberg

Leasing momentum slowed, but overall rental growth still positive in HK. The vacancy rate for prime office space in HK Central rose to 2.4% in 3Q from 1.7% in 2Q, according to Colliers International. According to Colliers, Rents in Central/ Admiralty increased 0.4% QOQ, supported by sustainable renewal and new demand irrespective of the rising relocation trend. Hong Kong’s office area forms 48% of HKL’s total investment portfolio (by floor area).
  • ·   For 1H18, HKL’s HK central office portfolio as at 30th Jun 17 maintained its high occupancy rate with only 1.5% vacancy rates. Average office rent rose to HK$106 psf vs HK$103 in 1H and 2H 16. Its HK central retail portfolio was 99.4% occupied with little change in base rents. There were some mildly negative rental reversions in its Sg office portfolio (S$9.1 psf vs $9.4 psf and $9.2 psf in 1H and 2H16 respectively), but occupancy rate remained strong with vacancy of only 0.2% as at end of Jun 17.

New contribution from Beijing retail mall coming on stream in 4Q?  (84% owned) WF Central (Beijing ) comprising luxury retail complex and 74 room Mandarin Oriental hotel is scheduled for completion in late 2017 and 2018 respectively.

Good free cashflow yield… As a result of its steady rental income from investment properties, HKL typically generates very good free cash flow of more than US$500m in the last 3 years (FY16: US$948m, translating to a free cashflow yield of 5.5%). This has helped it continuously pare down its net gearing to only 5.5%, which will allow HKL to scoop up good assets if investment opportunities arises. 
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Last 12M
12 Months Ending
Cash From Operations
Capital Expenditures
Free Cash Flow

Net Debt To Shareholders Equity
Source: Bloomberg

and potential for rising dividends? Noted that dividend/share has been stagnant for 2014-2016 at US$0.19 (dividend yield: 2.6%). If you study the pattern of its dividend payment, DPS remained at US$0.16 from 2009-2011 (3 years) before slowly increasing DPS by US$0.01/year from 2012-2014. If 3 years is a cycle, can we potentially see management raising dividend again this year by at least US$0.01 (or best 1 shot US$0.03). This is considering the potential rise in core investment property rental income (from the potential positive rental reversion in its HK office rentals, new revenue contribution from the new mall in Beijing, WF Central (84% owned) which will be coming up soon in 4Q, and continuously decreasing net D/E which is now at 5.5% (lowest in years)

FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Dividends per Share
Diluted EPS
Dividend Payout Ratio
Source: Bloomberg

Technically, prices have been consolidating between $7.10-7.80, after a strong rally from $5.95 at the start of the year. With prices near the low end of the trading range, and potential near-term catalysts such as the completion of the 84% owned WF Central in Beijing and hopefully higher dividends (my guess- prays), hopefully the stock will be ready to retest $7.80 and breakout soon.