Wednesday 31 August 2022

(August 2022 Results) How i would invest in the singapore stock market if i had 100k of spare money


August 2022 Returns: 2.50%
Year to Date Returns: -9.34%

Since Inception (9 Sept 2020) Returns: 54.52%

The STI has rose by around 0.31% in August. Companies like UMS did well in August while China Sunsine has rebounded back on its stronger results. Uni-Asia has also recorded higher profits while companies like Hotel Grand has missed my expectations.

A point to consider is that whether there are changes to be made to the portfolio. After some considerations, i have decided to streamline the portfolio by a bit.

I have decided to remove Uni-Asia Group and Hotel Grand from the portfolio and put the proceeds into Powermatic Data.

Hotel Grand's rev par in its latest result was disappointing and my own estimates did not really work in predicting the company's results. As such i would be divesting it.

As for Uni-Asia, the broad market conditions suggest that 2H 2022 will underperform 1H 2022 and although the demand and supply conditions in the longer term is beneficial, i believe that there will be huge price fluctuations in the near future and it is likely to be negative rather than positive fluctuations. As a whole, results was good but prospects remain very challenging.

For Powermatic, the increase in cash position, clean balance sheet and a bonus if the property is sold or value realized makes it a no brainer to add as the business is being valued very cheaply considering the cash it holds. Adding it is something that makes sense to me and is something i want to do as well for some time.

As such the portfolio will look like this.

Sunday 28 August 2022

FB Page Open


I have decided to open a FB Page which will have some of my shorter thoughts on certain stocks as well as to include my thoughts/ rants and all the random what not.

Do check it out if you have time at this link here

Friday 19 August 2022

Is Singpost (SGX: S08) a buy at 0.62?

Following recent social media postings on Singpost, the company has been in the eyes of some retail investors. 

From some of the comments i read, most would stay away from Singpost.

However, is that really the case?

I decided to take a look at it to determine if it would be a buy at current price of 0.62 as of 19 August 2022.

For Disclaimers, i used to owe some shares of Singpost as my 4th or 5th stock i purchased back in  2015 at around 1.7 and i sold it at 1.3 in 2017. Since then i have not really looked at the company closely.

Pros of Singpost

1) Internal Promotion of CEO. Following a long history whereby we had Ceos that did not really do well since 2015, the company has finally turned to promoting one of their own and not parachuting in anymore. They have promoted a CEO from the Postal Services Business to be the Group's CEO.

2) Strong Shareholder Backing. Its major shareholders include Singtel and Alibaba. With Singtel as a shareholder, it can be said that the company should be able to raise finances for a considerable acquisition should such chances appear.

3) Unreplaceable Moat. For the longest period, Singpost has been in charge of putting the letters and small parcels into the letter box of various households. While we used to get some flyers but in recent times these are getting far and few as the top of the letter boxes are being locked and as such its the Singpost man that has the access to the letter boxes. As such, it is very unlikely that anyone will come in and replace Singpost in doing these postal businesses.

Unfortunately, that's all the good things i can probably think of. Moving to the cons

Cons of Singpost

1) CEO has been in company for 2+ years. The promoted CEO (Mr Phang Heng Wee Vincent) has been in the company since April 2019 and his first position is already the CEO of the Postal Services. This meant that its not like he had worked up from the grounds or had a considerable amount of time being in the company to understand the processes from the bottom up etc. 

To add on, he has a Masters in Aeronautics and Post Graduate Diploma in Flight Test Engineering as well as Advanced Management Program from Harvard. While the management program would definitely help him in his leadership abilities, i am not sure how aeronautics and flight test engineering would be much help to a logistics company.

To quote an example , YTO Express International 's CEO has over 20 years of experience in logstics field and even so, the market cap of the company is only around 900 million HKD compared to 1.4 billion SGD market cap of Singpost. 

As such, i would have ideally preferred someone who has either worked at Singpost for a considerable amount of time or has been in the similar industry for a long amount of time. 

The appointment of a leadership that has experience in other fields would only make sense if Singpost would like to diversify out of its current businesses.

2) Poor Performance of Post and Parcel Segment

Ever since joining in April 2019, the CEO might have faced many challenges such as a declining market as well as Covid. However, the results are for all to see as operating profit continues to decline.

Time Frame

Revenue of Postal

Operating Profit of Postal

2021 April to 2022 March



2020 April to 2021 March



2019 April to 2020 March (Vincent Joins in 2019 April)



2018 April to 2019 March



2017 April to 2018 March



At this rate, we might see the postal segment being unprofitable by 2024 or 2025. At that point of time are we considering spinning it off to be a non-profit entity like one of the recently delisted company?

While i admit that times are different and the amount of things that goes by mail these days are getting lesser and lesser as folks go cashless and more things are available on the web for one to check. E.g CDP Statements, Brokerage Statements, Bank Account Statements etc, my understanding would be that the business is quite a human intensive business as last mile delivery involves a high amount of labour. As such, it should be alright to scale it down if volumes are down and use more technology in sorting and planning of deliveries to achieve cost efficiency.

3) Poor Record of Acquisitions

Probably one of the biggest weakness is that in trying to expand its revenue stream, it has made some bad acquisitions. In 2015 it acquired Jagged Peak and Tradeglobal which both went into Chapter 11 (Bankruptcy Proceedings) a few years later. Both of  them cost around $190 million USD in total and its roughly 15% of current market cap.

Fast forwarding to present, it has acquired Freight Management Holdings. Once again, it has recorded a goodwill of 181 million SGD on its balance sheet.

While the company has performed well for FY 2020 (PBT 20.1 million) and FY 2021 (PBT 25.8 million), it seems to have subsided in performance as it recorded 8.85 million profit after tax for its most recent financial year. This might start to show cracks in its acquisition which might result in further goodwill impairment down the road

(20.1 mil AUD PBT in July 19 to June 2020, 25.8 mil PBT in July 2020 to June 2021, 
8.85 mil SGD Profit April 2021 to March 2022)

4) Failed to improve profits of the company

Back in 2003 when it first listed, Singpost recorded 380.9 million in Revenue and 101.3 million in net profit in FY 2002.

Fast Forward to 2022, it has recorded 1404.6 million in Revenue but 47 million in net profit in FY 2021.

As such, if we look at it from a profit point of view, it seems to have taken many steps back and if we factor in inflation in the analysis, it seems to be doing much worst now.


There is no denying that the postal business is declining even though e-commerce is growing in the domestic postal business as Letters and Printed Paper continue to decline.

Profitability on most fronts are likely to be threatened as the margins for e-commerce is likely to be lower than traditional mail while its logistics segment's acquisitions has shown some signs of poor recent results. Also,  the company has already shown poorer 1Q FY 2022 

Having said that, the company still has some real deep value as the Singpost building is a deep value that will only be realized should the company decide to relocate its postal business or do away with it.

With a GFA of 137,227 SQM and assessing that Paya Lebar Square Offices has a Price Per SQM of $19,302(From Low Keng Huat Annual Report) , the valuation of the Singpost building would be around 2.6 billion . However, as it has only around 59 years left, it is likely to have a lower valuation. 

To put it simply, to buy it for value play, it does not make sense as it is unlikely currently that Singpost would vacate the building. 

To buy it for rental play, the Singpost building by itself is not attractive as its profits is around 52 million or 1.9 cents earnings per share per year.

To buy it for growth, there has to be a turn around in profits first which would likely to be driven by logistics or future acquisitions. Unfortunately, profits have been on a downtrend.

To buy it for strong leadership, i have not seen any outstanding points that suggest that this guy can be the next Jeff Bezos , Yu Huijiao (YTO Express CEO) or Wang Wei ( Founder of SF Express)

With that, i would not be considering purchasing Singpost at its current price.

Saturday 13 August 2022

Results Quick Thoughts (Hotel Grand, Luminor, YZJ Finance, HG Metal, Tat Seng)

 With a flurry of results released, just took a few glance and give my thoughts.

1) Hotel Grand Central

-Have to say that the revenue(increase of 1%) and profit (decrease of 31%) is quite bad. With only Singapore recording an increase of around 20-30% in revenue while the rest of the countries such as Australia and New Zealand recording lower revenues.

-Even accounting for its disposal of its investment property which resulted in lower revenue, the net profit still came in lower as the staff cost increased much more

-The only positive thing to talk about is that fixed deposit has increased a lot as the disposal proceeds have been transferred into it.

-Considering even Hotel Royal was able to double its room revenue from 5m to 10.5m, Hotel Grand is literally a joke.

Unfortunately, it will likely be moved out of the portfolio 

2) Luminor Financial Holdings (Hodlings)

-Have to say i am sorry again but i am not going to use the picture. Results-wise was shockingly poor. 

-The press release stated reaping fruits of diversification but all i can see is diworsification from the financial statements. 

-The new business segment is profitable but unfortunately they have wrote off 9.8m of factoring receivables which is 15% of its factoring receivables.

-With that the company has scored 2 goals in 2 years. Firstly, commiting a forex mistake last year in China and had to be fined. Secondly, recording a decent amount of write-offs as mistakes in loan surface

-On the bright side, i believe both are honest mistake and we should move on. After all, the owner has given a loan of 38 million at 6.5% per year and also managed to issue shares at 30 cents sgd when it is trading at around 13.5 cents currenly for an acquisition.

-Realistically speaking, i think they can do a hat-trick but i am not sure how they are going to score the 3rd goal. Could be a spectacular write-off of acquisitions which has occurred before.

-Fortunately / Unfortunately i do not have a huge position so while i keep note of the company, i do not think it is a good time to be adding more.

3) YZJ Financial Holdings

-It has been surprisingly hard to read the financial statements of the company. In fact i think the best way to align interest is to ask the whole management team of Singapore to own shares equivalent to at least 50% of their annual salary.

-Jokes aside, i am surprised to see a reversal of allowance for credit which could mean that its bonds are doing well

-The company's balance sheet is also much more healthy now compared to December 2021 as Under Performing Loan has increased from 3.34% to 5.38% while non performing loan has decreased from 10.4% to 1.39%

-The company has done step 1 correct which is generating some loans to cash. Around 900 million has been converted to cash (400m and the rest to other receivables which is prepayment for potential investments)

-Step 2 will be to convert the next 2.4 billion in the next 12 months into cash and investments then followed by Step 3 which is converting the remaining 400m and focusing on its investment funds and management companies etc.

-Lastly, results did come in much worst. With the main culprit being fair value losses in its 'Unlisted Equity' which was valued by unobservable input.

4) HG Metal

-Results is ok, among the 4 companies covered so far, the best of the worst would be this company.

-Unfortunately the market does not seem to be very positive on the results as it has plunged more than 15% after its results release

-Inventory remain high, bank borrowings have increased as well to finance inventory purchase. If its inventory purchase, i might not be as concerned yet as these tend to fluctuate time to time and at time of recording it might just be high. While finance cost is slightly higher, it has not really reflect a big increase e.g a close to 290% increase in bank borrowings but financial cost increased by only 26%

- I believe the company is probably at close to full production levels. Key to profitability will be the demand of steel and price of steel which is linked to global price trends as well as local construction demand etc.

5) Tat Seng Packaging

-Results came in at better than i expected as i expected a 20-40% drop in profits

-Profit before tax came in at 18.1% lower while gross profit is 12.6% lower. Both showing good signs amidst the tough industry

-Capex in 6 months 2022 has also increased to 14.3 million. However, there is nothing to be excited about as there is no to the moon or to the ground technology purchase. 12 million was used to purchase a new property in January 2022. However, it has 7.5m of capital expenditure commitments currently which means that this year's capex will be one of the higher ones in the recent years

-Lastly, a depreciation of the yuan has hurt the company in the other comprehensive income segment as it has recorded a translation difference loss. Unfortunately, yuan in mid august is still weaker than in June and January

If i were to rank the results( not balance sheet) of the companies then it would be 

1st HG Metal

2nd Tat Seng Packaging

3rd YZJ Financial

4th Hotel Grand

5th Luminor Holdings

In reality all 5 are somewhat bad but someone would rank better among the bad.

As for Uni-Asia i need some time to digest the results.