(February 2023 Results) How i would invest in the singapore stock market if i had 100k of spare money

                      

February 2023 Returns: -1.13%

Year to Date Returns: 4.63%

Since Inception (9 Sept 2020) Returns: 48.80%

Quick Commentary for the Stocks that released their earnings in February

Propnex - The bottom line does not reflect the true story as there has been impairment of trade receivables being recorded under other expenses offset by derecognition of payables recorded as other income.

Having said that, gross profit is up while revenue has shown an increase in Q4 and Full Year. The increase of 16.88% in 2H 2022 and 7.5% in FY 2022 is much better than APAC Realty's -5% in 2H 2022 and -4.8% in FY 2022. The stock recorded a modest increase on 28 Feb and rightly so as it has proven to be able to increase its revenue despite what many would say is a poorer environment due to interest rates.

TC Auto - As anticipated, the repeated lockdown in 2H 2022 before the 'sudden open up' has resulted in poorer sales in 2H 2022 compared to 1H 2022. Surprisingly, handling and commission fee income actually is higher in 2H 2022 than in 1H 2022. The worst is likely over and 1H 2023 will be crucial.

Haw Par - Lack of Special Dividend might be a turn-off but not that it was anticipated anyway. Despite UOB declaring higher dividends, they will only be credited as dividend income in the upcoming financial result. Perhaps a slight worry is that the growth momentum of its Healthcare Segment has slowed down in 2H, but that is really picking the 1 mark mistake from a boy who got 99/100 for his exam. The ROA of the healthcare business is around 30% in 2022, and is valued at free on the balance sheet.

Centurion - Results not released at point of writing

Tuan Sing - Bells start to ring as the company recorded higher finance expense and reverse into a loss making position in 2H 2022. However, 2023 could finally be the year for Tuan Sing as Gultech seems to be nearing an ipo. It is a company i might want to give a closer look if i can spare some time and effort out.

China Sunsine - Results not released at point of writing

UMS - Have to see if the subcontracting cost come down. The slowdown in growth is anticipated and much will have to depend on if the company is able to get new customers to fill the demand. But given the trend that factories will still be completed, demand looks somewhat healthy.

Conclusion: Most looks rather good actually surprisingly. Those that did not have a much rosier outlook ahead as well apart from UMS which already looks cheap based on current valuations.

AAG Privatisation Offer at 1.85 Thoughts

To start off, i was planning on going 3 trips next month, upgrade my phone , take some money off the market and take a break because i  thought i would have net a profit similar to 2022 already when the announcement of AAG Energy was being halted due to takeover related announcement,

Following the announcement, i guess none of them will likely happen and i have to in-fact consider booking a trip to hk instead as it is a scheme of arrangement at a price of 1.85

To put things in perspective, the offer is not bad as it is a 10% increase from the price before it was halted (1.68). However, it just seriously undervalues the company and the overtaking company has already stated that the scheme will not be increased and the offeror does not reserve the right to do so. 

It has also stated that it will not be able to offer again within 12 months should the scheme not go through unless SFC allows. AAG has also said that they have no intention to declare any dividend prior to completion of the Proposal

In fact, i was asked about my thoughts on the privatization when i went to a more than 10 billion dollar market cap company for an interview before (Not Macdonalds as the company is sgx listed). The guy asked if i was happy with the privatization and i said no cause i know it is going to limit the real potential of the company. 

However such is life where if u are to offer for something, u would want to get it as cheap as possible so that u get more value for the buck.

I have seen some questions and comments online which i would like to give my 0.1 cent replies.

Some commonly seen questions/comments include

C: If Privatization fails, the company will fall in share price back to 1.1-1.2 levels

A: If so, you would think that insiders would start picking up shares by asking their affiliate or someone to do it like a 3rd party fund manager and then make privatization easier the next time round.

In fact, if it fails it may compel AAG to declare dividends instead so that the money can go back into the books of the parent company instead of being consolidated in the same financial statements but in different individual company books

C: What if the parent company misuses the money of AAG by acquiring assets anyhow?

A: They can do so but why would you do something that is detriment to your own balance sheets as well as affect your own chances of securing loans especially when a huge loan is already required to purchase the AAG Shares

In fact, AAG Energy has so much cash that if you do a takeover, you can get a cashback better than many credit card and miles card around.

C: Privatization is likely to succeed as many insiders have already got the shares.

A: If so, there is nothing anyone can do anyway, we can just take the 10% and then call it a day and move on

C: AAG Energy if Privatization fails, might start 'sabotaging' its own business to drive share price down and allow owners to offer lower next time round

A: The projects are in collaboration with CNOOC and Sinopec, with respective companies actually holding a stake and contributing staff and expertise as well. The projects since national stake is involved, also has to do regular reporting and try their best to hit the yearly targets of production that has been increasing as China is moving into clean energy and energy that is self-sustained. As such, sabotaging is going against the government companies and the national policy which i believe its not worth doing just to take over a company at a cheaper price.

To make things worst, most of the loss in profit should such things happen will also reflect on the parent company's income statement as well and in turn will affect their ability to borrow or their share prices which might result in shares that are held under custody to be sold-off if share price drops too much.

Conclusion

If it succeeds then oh wells so be it. 

If it fails then share price volatility is expected but to agree the offer of 10% premium kind of misses my low expectations of 20-30% already. For myself i would monitor how things goes but currently i will not agree to the offer.

How many companies that you have sold out but the current trading price is higher than your sale price?

I was asked this question recently…. Well frankly as the context was that I had to answer the question with a rough estimation, I had to give an answer and I said probably 15.

But I knew that is highly inaccurate as there has been too many things I have done across the past years. Nevertheless, it piped me to take a look at my previous sales in detail.

As I have over 100 transactions, I will take a look at my last 15 sales and my first 15 sales.

Last 15 Sales

Coy Name	Ticker	Sale Price	Current Price	Current > Sale Price
Zengame	2660 HK	2.69	3.18	Yes
Medialink Group	2230 HK	0.194	0.189	No
JH Edu	1935 HK	1.21	1.36	Yes
Chaoju Eye Care	2219 HK	4.15	5.65	Yes
Yuexiu Services	6626 HK	2.51	5.02	Yes
Central China NL	9983 HK	2.30	3.33	Yes
Human Health	1419 HK	2.08	1.91	No
AV Concept	595 HK	0.57	0.495	No
Hotel Grand	H18 SGX	0.98	0.89	No
Samudera Ship	S56 SGX	1.22	1.22	-
HK Johnson	1955 HK	0.98	0.72	No
YTO Express Intl	6123 HK	2.55	2.40	No
Tat Seng Packaging	T12 SGX	0.70	0.66	No
WKK INTL	532 HK	0.91	0.72	No
Uni Asia Grp	CHJ SGX	1.13	0.95	No

 

5 out of 15 this equates to a hit rate of 33%. In fact, most of it came at late last year and early this year sales. I still feel that this looks satisfactory to me.

First 15 Sales

Coy Name	Ticker	Sale Price	Current Price	Current > Sale Price
TTJ	K1Q	0.41	0.23	No
Genting Singapore	G13	0.985	1	Yes
UOB	U11	20.01	30.23	Yes
Valuemax	T6I	0.28	0.35	Yes
MM2 Asia	1B0	0.53	0.043	No
Bund Centre	BTE	0.785	0.485	No
Singpost	S08	1.315	0.555	No
Sembcorp Marine	S51	1.635	0.137	No
New Toyo	N08	0.26	0.21	No
LHT Holdings	BEI	0.69	0.7	Yes
PC Partner Group	1263	2.56	5.31	Yes
Frasers Cpt Trust	J69U	2.19	2.16	No
China Aviation	G92	1.70	1.03	No
Chu Kong Shipping	560	1.10	1.09	No
Figtree Holdings	5F4	0.169	0.033	No

Surprise and Surprise, its 5 out of 15 again. But if u asked me, I think my last 15 was better than my first 15.

Let’s put it in dollar terms, if $1000 is invested in each stock, what is the difference at the end of the day between selling and holding?

Last 15: -1035.10

First 15: 2783.50

Conclusion

Looking at this small backtest, I believe that the last 15 tend to be more inaccurate due to the duration being shorter and as such it is more influenced by market conditions and sentiments. However, it does show that I am truly a master of market timing like a noob as the last 15 sales came in 2022 and 2023.

Stretching a longer horizon, the first 15 happened between 2016 to 2018. As such, some stocks might have delisted, some might have change in fundamentals and business conditions etc. Not to mention, Covid has occurred and it might have brought the companies to new heights or new lows as well. Nevertheless, the first 15 definitely performed much better which justified my decision that holding them for long term is not ideal.

In fact only 5 companies having a higher share price than the share price I sold might paint a true picture that my deficiencies in investing is that I do not have a sound 3-7 year time-line in my investing line of thoughts when I think about investing in companies. Something that the person who asked the question highlighted as well.

Lastly I would like to end off by saying, its never easy to just continue holding on 3-5 years without selling. Even if I did to my first 15, none of them returned 200%. With the highest being around 110%. If discounted across 5 years, the return is just 16%. 40k will be 84k. 

I won’t commend if that is good or bad as everyone will have different view to it.

Going back to the question, another angle to consider is why am i selling it. It could be flipping ipo to realizing profits to cutting loss. Even when realizing profits it can also be non-related to hitting target prices.

On other hand, i think its time for me to go think about other non investing related things such as nursing post attending k-pop event depression and how good the S22 Ultra Zoom might be.

(This is probably 10 to 15x zoom, i forgot the exact zoom but it probably is the clearer photo among the many not clear ones. I wonder if S23 Ultra will be better....)

                                                 Maybe looking at some videos will help

Recent Portfolio Actions (HK Stocks Related)

In a surprise of a surprise, it took me till after CNY to actually have some changes to the portfolio albeit all of it came from the HK Side.

Divested Medialink Group Limited

Medialink Group Limited did very well in 2023, up by almost 30% as compared to the index which is up 9.4% (As of 3 Feb). This came after news that The First Slam Dunk has done very well in Hong Kong and Taiwan, 2 areas which it distributes the movie.

In English it means that Slam Dunk 's movie gross revenue is places 2nd for All-Time Japanese Anime Movies Box Office in Hong Kong. It has also broke 30 million HKD in Hong Kong. While it is estimated that it has broke 300 million twd in Taiwan or 79 million in HKD.

I find the success of the movie not a surprise at all, given that it was heavily promoted in Hong Kong and Taiwan as well as Slam Dunk being an anime that even a person that does not watch much anime like myself also know as i have seen it on channel 8 when i was young.

In fact, the management's ability to secure the distribution rights to Taiwan and Hong Kong has to be muchly accredited. Taiwan is a country which likes 2 sports the most, namely baseball and basketball.

As you can see here, the basketball stream  views for one of their leagues is at least 250k. 

This shows the general keen interest in basketball.

(The detail is the amount of crowd behind)

(The detail is the amount of crowd behind)

I have affirmed this by going down to a few games myself to experience the crowd as well in January. The crowd and all is good and it has affirmed my thoughts that The Great Slam Dunk will likely do well in Taiwan.

Why did i sell out of the company?

Well i feel that it has run up by quite a lot and it did not deserve a rapid share price increase as market cap has went up by 30 million HKD. Even though the movie gross revenue is around 110 million HKD or maybe slightly higher, the company has to also pay to acquire the rights and give a cut to the cinemas as well as incur promotional cost (e.g promoting the movie at 桃园跨年 as well as inviting some basketballers to go watch the show)

All in all, the company if it retraces back to my buying level, will tempt me back into buying it because of the solid management and their track record.

Companies Added

Justin Allen Holdings (Hkex: 1425) - Mentioned before in 1 of my previous blog post, 

Town Ray Holdings (Hkex: 1692) - Coffee Machine ODM/OEM Business is something interesting and just a purchase to see if they can continue to do well in this segment.

Miramar Hotel and Investment Co Ltd (Hkex: 71) - Had some spare cash left over as i did not fill my town ray holdings fully and as such just bought a small amount due to some idle cash left in the brokerage account.

All in all i have not decided on how long i will hold any of them.

If i had to rate my purchases based on 0 to 10 where 0 is no go based on my valuations to 10 is a must buy. Then the ratings are as such

Justin Allen 6/10

Town Ray Holdings 5.5/10

Miramar Hotel 8/10 if you do not intend to beat and index or any bloggers or any pro investors in terms of returns for 2023. 1/10 if you intend to multibag or beat the index or any competition. It falls in almost the same category as Haw Par in SGX. Though if anyone wants to see or hear a more detailed breakdown of this company, can always leave a comment below or let me know.

Conclusion:

Overall returns from Medialink Group is 45% as average price is 0.137 while my average sale price is 0.194. This is inclusive of a dividend of 0.007. Considering HSI returned around 9% since my first purchase, i guess this should be somewhat acceptable.