Tuesday, May 8, 2012

1Q 2012

Dear Readers,

Some long overdue updates on the portfolio. 
Due to the problem with Google spreadsheet, I had to remove the live portfolio from the blog so I guess I'll have to manually input the numbers and update the performance manually. 

In the backdrop, 2012 is looking to be rather interesting, yet again due to the macro issues similar to August of 2011. Greece defaulted as declared by ISDA with the haircut on the sovereign debt (debt swap) and Spain/Italy is wobbling uncontrollably while elections woes brings everyone back to reality. ("Hey where are all the equity bulls now?" ..They come and go in increasingly rapid pace). 

On the portfolio, some notable mentions are: 
  1. Koon - Still remains undervalued while management has taken efforts to diversify. Also wrote down some amount on their Vietnam port project. 
    • Announced dividends of S$ 0.05/sh ex 10 May 2012. 
  2. Roxy Pacific - Recently rallied on announcement of 1 for 2 stock bonus. The institutional analysts who once have this firm a hold/sell are all starting to recommend a buy. Valuation of the hotel is up to over S$ 410m while carried at S$70+m on their books. Revenue declined on slower property development but a bulk of their developments are over 90% pre-sold with over S$ 700+m of sales yet to be recognised. Firm market value stands at over S$$400m.
    • Gave dividend of S$ 0.02/sh - April 2012.
  3. Nanyang Holdings - Still a good 40-50% discount to firm value. Firm now owns 4% of SCSB bank. Occupancy rate of commercial buildings previously 80+% are now all over 90% which was a pleasant surprise. HK government also released more announcements for plans to convert Kowloon into a residential work-play hub which is positive to the properties the firm owns there. There was also news that the founder unfortunately has also passed on.
    • (Will update this position shortly)
    • Announced dividends of HKD 0.50/sh - March 2012
  4. AEI - Pending updates from new plant in China for automobile parts engineering. Operationally still weak but inventory and receivable levels are satisfactory. Gross profit declined on higher COGS as expected due to the Japan earthquake/Tsunamis and Thailand floods (Supplies hard disk components). The firm also extended the M2B loan of USD 2.5mm for a security of over USD 21m consisting of properties in Cambodia and stock of listed firm on JSX but the convertible loan is carried at 0 value on their books.Current market cap of S$31m, net cash of c.S$23.7m with S$6.2m of potential loans receivable. Will keep a close tab to determine if there's any cash burn and if its ideal to increase the size of this currently small position.
    • Announced dividends S$0.01/sh ex 4 May 2012. 
  5. World Precision - Recently increased marketing awareness and size/position of the company. 1Q Sales took a slight decline due to the tight operating environment in China with the slowdown in capital flows and decline in incentives for promoting infrastructure and automotive markets. Firm is one of the few rare China based firms to have a good operating track record and good cash dividends payout. Their recent article on "The Edge" magazine also reflect frustrations of the founder on their depressed valuations, suspect something may be in planning on the horizon for this company. Also notably, their balance sheet has deteriorated slightly, will keep a close tab on this firm.  
    • Announced dividends of CNY 0.135/sh ex 9 May 2012. 
  6. Haw Par - Went long at the high 5s due to the unrecognised see through earnings, solid operating businesses and grossly undervalued assets. (I understand the risk that many view this as a value trap). 
    • Announced dividends of S$0.14/sh ex 22 May 2012
  7. Currently about over 40% invested and under 60% in cash at the moment. 

I have listed dividends for ease of reading and cross reference. It does not imply my insistence on only stocks that give dividends in any way. Thats all for now, will post a follow up on the performance for 1Q 2012. 

Cheers, 
MT




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