Thursday 30 March 2023

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

March 2023 Returns: 0.05%

Year to Date Returns: 4.68%

Since Inception (9 Sept 2020) Returns: 48.88%

As i will be busy on the next few days, i have decided to skip ahead 1 day and report the results.

China Sunsine - From the tone of the results briefing, it seems like Q1 would likely be not as good. The china automobile trend in the first 2 months of 2023 looked bad as well with a close to 20% fall compared to 2022. Considering that the industry is cyclical and the company has been expanding production levels, there is a time to think that the company might be overvalued but its definitely not now.

Centurion - Overall a solid result, with news that rentals are up and dorms are operating at full capacity. Only concern is the finance expense that has ate up profits in 2H 2022. 1H 2023 will likely reveal how good the reversion in rates are vs the cost.

Thursday 16 March 2023

Thoughts on Miramar Hotel (Hkex: 00071)

 Miramar Hotel (Hkex: 00071) released its results tonight.

Personally i am not as concerned about the results due to the large discount and cash position the company has.
Nevertheless, the results are positive as hotels and F&B Operations saw a turnaround to profit in 2H 2022 while travel agency operations saw reduced losses.


(Full Year 2022)

Current Share Price of 11.70 HKD makes no sense as the Cash- All Liabilities equate to 6.12 HKD per share.
Assuming a bad case scenario where the 2nd Half of the year situation persist which we know is unlikely due to reopening of HK and Revenge Travel, full year should come at 92 cents as 2H underlying earnings is 46 cents.
However, if we were to backtrack to 2019 before covid, the core earnings came at $1.13.
Therefore, the business which includes hotel, rental property income from shopping mall , F&B in hotels as well as travel agency (which has 100k likes on the facebook page) trading at around 6-7 PE based on 2022 2H earnings does not make sense.

Once again, share price looks funny again as the stock trades at a low range when its underlying earnings have shown signs of recovery.
If one says that share price is expectations of earnings ahead (which i am definitely not one of those that believe in that 100%), the company is showing covid valuations or a company that does covid swab sticks or mask because its share price is on the low side.
With HK Opening up happening in Jan/Feb 2023 only, i believe more is to come. Even if the already low expectations are not fufilled, the strong balance sheet more than makes up the buffer.
Underlying Earnings
2019: 1.13 HKD
2020 : 0.66 HKD
2021 : 0.61 HKD
2022 : 0.76 HKD
The slight worry might be the steady property rental of office and shopping mall might come down as it has shown a slight decline from 2021 to 2022. However, it remains relatively stable and recent rentals have shown stability as well. The broad forecast is for rental in malls to show 0 to 5% this year.

With that i end off by saying usually the higher frequency in posting means that i am jetting off. Which i am

Friday 10 March 2023

Thoughts on Dream International (HKEX: 1126)

 Dream International is a company i have once held in  before from 2017 to 2018 and i revisited it this year again.

It has just released a positive profit alert. While the alert was not a surprise, the magnitude of the profit is a positive surprise.

The reason for revisiting was pretty simple thinking any tom or harry can do.

1) Languishing Share Price

A glance at the share price and one might wonder what it has been doing the past 5 years as the share price has declined. Could it be a case of profitability being impacted? Lets find out a bit deeper.

2) Revenue and Net Profit on path of recovery. Financial Health Healthy

A look at its revenue will show that it has grown since covid and its profit has also recovered. If we can have reopening stocks moving ahead of time and recovering in share price, surely a company like Dream International should deserve better valuations as it is also benefitting from recovery and has already shown a recovery in 1H 2022.

While ratios has came down, book value has increased and against a languishing share price, the premium reverses into a discount.

The green theme colors are based on the positive profit announcement that was made on 10 March.

This means that in 2022 would have made its highest profit since 2010.

3) Increase in Capacity

From the table above, one can identify that 'there is a possibility' things are finally starting to fly as Utilization Rate has increased despite increase in number of plants.

Looking at these 3 factors, i have felt that it was worth putting a stake to see how things might turn out.

But of course before that, i had to see what are the factors or reasons that might explain why this company is so cheap and what are the possible risks.

1) Higher Operating Leverage. As the plants increase, the company will have higher operating leverage and as such it will do better when demand is strong while if demand falls off, the magnitude of reversing into a less profitable positions is more higher.

2) Key Customer Risk. In 2021, its major customer accounted for 34.8% of revenue. The master sourcing agreement with its major customer also expires in 2023 which means the risk factor cannot be discounted easily yet.

3) Missing Money. In Feb 2022, the company lost its i-banking token and found out that 41 million HKD has been transferred to a non related account. While a police report has been made, nothing has come out of it yet. The risk of this cannot be neglected but it is safe to say it has been some time since that event and no new tokens were lost recently.


The decision to take a stake in the company probably took shorter than the time needed to write the figures out and this post itself.

Dream's decision to add plants even during covid shows a remarkable believe in its strategies and ability to secure and execute orders. In fact, the sudden addition of 4 plants in 6 months is so quick that it took 3.5 years to add 4 plants before 2022.

It will be hard to estimate the demand / orders the companies has as the major customer is only 30+ % of the company. However, the management's decisions seems to echo that demand looks strong. Hopefully the Annual Results release will shed more light

If we took a look at other toy manufacturing companies' results, we will see that Dream performed better compared to peers.

Dream International: 45% Revenue Growth in 1H 2022, 343% Increase in Net Profit for 1H 2022

Kader Holdings : 2% Revenue Growth in 1H 2022

Playmates Toys: -20% Revenue Growth for FY 2022 despite 25% Revenue Growth for 1H 2022. FY and HY still loss making

Matrix Holdings: 19.1% Revenue Growth in 1H 2022, 116% Jump in Net Profit for 1H 2022

Despite good increase in 2022, the same magnitude of increase in 2023 looks rather unlikely currently. But at the trading price of 2.70 on 11 March, the PE is less than 3.