I pondered a bit whether i should share about this. Initially i did not want to post about it but i have decided to.
After sourcing the Asia markets which included Hong Kong, Indonesia, Malaysia and Korea, i have finally made my conviction purchase.
Yup its photocards, after missing out on a purchase from a website as i was missed the purchasing window, i had to source for it from various countries such as Indonesia, Hong Kong and Korea. I still have 1 more coming in from Malaysia (hopefully soon as it has been close to 1 week since it left the International Hub in KL.
Although the purchases were above book value and some were 3-4 times above the book value, i really wanted them and hence i did not really think that much into purchasing it.On a slightly serious note, folks might remember that i made my single largest purchase last year in November.
Fundamentally, i have not seen any thing alarming apart from its financial results whereby
- GRP recorded losses (expected)
- Luminor recorded losses on its penalty from illegal forex transaction in China (expected)
- Luminor remains strong as it is profitable without penalty
- It has placed shares at 0.30 to acquire Malaysia Financing Business
- It has not recognized the gains from its relocation yet
- GRP's affordable housing is making traction in sales(Orange denotes reserved. Out of 465 units, around 400 units have been reserved)(300 units sold, out of 465 units that is 64%. A very welcoming figure)
But how has GRP Share Price performed?
Purchase Price : 0.173
Since then it has distributed 2/3 Shares of Luminor for every GRP
Current Price of GRP: 0.061
Luminor Price: 0.135
Total = 0.061 + (0.135*2/3)
= 0.151
Currently sitting on a 12% loss. With that i can only say.........
Perhaps sticking to buying photocards would have been better as there is no reason for others to participate and get involved with such losses.
But what if i am interested in the latest 2022 conviction purchase for stocks?
You can consider the stock above. Of course just by looking at the chart, if you can tell what company it is then you do not need to read any further.
In terms of risk level, this company definitely has a very big risk, even larger than GRP. Why so?
As you can see from the chart , it is definitely bad if one bought into it at the higher levels and see it drop to the current levels if they held on to it.
However, if you consider its rise since the start of the year in what is a down market for many countries, it is not bottom fishing as well.
For myself, i thought about it a lot into the purchase. Had this been any previous years, i will not commit to this purchase. But this year, i intend to do something different / funny / weird / lol / idk hence i did it.
Alright. Serious Time. The stock i purchased is Samudera Shipping (SGX: S56)
3 Main Reasons why i decided to purchase this company
1) Recent Guidance given by other container shipping companies have affirmed a trend where by Q2 is better than Q1 and 1H 2022 is better than 1H 2021. This can be seen in companies like Cosco Shipping listed in Hong Kong as well as Evergreen
With that we can affirm that 1H results for Samudera should not be bad
2) Guidance given by Samudera Indonesia. Raised revenue target and affirmed the profit growth trend in 1st 5 months. Samudera Shipping is a big contributor to Samudera Indonesia.
3) Attractive Valuations. Based on my ballpark estimations, Samudera Shipping earned 68% of its 2021 full year profits in 1Q. As such, its half year results should beat its full year 2021 results. Assuming a similar market in 2H 2022, this gives an earnings of 65 usd cents for full year and it is trading at a PE of less than 1 currently.
A look at the PE And BV of its Peers
Cosco Intl PE of 1.6 BV of 1.18
Evergeen PE of 1.59 BV of 1.09
Yang Ming PE of 1.51 BV of 1.03
Samudera looks undervalued currently as its Book Value after adding the 1Q results should be below 1 as well.
If we look at it on a long term horizon track record, from 2011 to 2021, it has only been unprofitable for 2 years.
Excluding 2021, from 2011 to 2020 the consolidated profits is 56 million. While not a huge amount, it shows that the company has a track record of being profitable. Even if suddenly container rates go back to pre-covid era and the world suddenly found a cure for Covid and Covid has been exterminated, the company is still likely to be profitable.
Of course there are many risks. For example, if the expected recession comes then container rates might not hold in 2H. It is important to see what the estimates/guidances are for the major players such as Maersk, Evergreen and Cosco Intl. It is also a very volatile market that requires monitoring on a more regular scale.
To sum off the key risk and opportunities. I would use the post below found on a forum. In fact i copied most of what is mentioned from this post.
No comments:
Post a Comment