Friday 28 April 2023

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


April 2023 Returns: 9.63%

Year to Date Returns: 14.76%

Since Inception (9 Sept 2020) Returns: 63.21%

Much of April Returns came from Propnex that had a bonus issue and went ex-dividend. However it endured a volatile trading day on 27 April when property cooling measures were announced. 

My quick thoughts / reactions from the measures is that it seems to be shooting a bazooka at the wrong target. While the biggest increase in ABSD comes from trustees and foreigners, they do not account for large amount of transactions. As such, it is likely that they would consider becoming a PR or consider renting instead. With the rental market already hot and expensive, this would likely drive it up.

1 Theory Crafting is that this might result in lesser expat expansion into Singapore as this would mean that for them to set up company and settle here is now more expensive and as such they might consider other countries to set up their operations.

I do not believe that the HDB hitting 1 million dollars + and the increase in people buying resale / private housing instead of waiting for a  5-6 years for a BTO is actually due to these trustees or foreigners. As such i believe its just trying to prevent any weird huge influx of foreign buyers or just encouraging people to get PR and then purchase instead.

I just think its quite sad for the Singapore Generation these days. Whether one switches job to get a higher pay or gets promoted and say an increment of 7 to 15%, i just wonder if that is ever enough to purchase a house anymore. 

1 of my favorite sad truths i use when people ask why i am not attached is that 'I am ugly and my salary is low as such i don't think its correct for me to think about this as the partner and any children in future would likely suffer.' Of course the truth is i don't have any intention to get attached so i don't think about it but i know the sad truth still exist.

As such, Propnex will see some sale reduction but if prices keep going upwards, their commission which is in % will also be subsequently higher. I believe there should be a more targeted absd coming soon unless the elections might play a part in the decision making.

As for the rising house prices, its just a sad sight to see.

Back to Portfolio and Changes. I have decided to trim Propnex and replace YZJ Fin Holdings with Huationg Global

I will probably write about it in some detail when i have more time. Currently i am fifty-fifty on it but my gambler hunch will say lets go with it.

Wednesday 19 April 2023

'Deep' Dive Analysis on a SG Micro Cap

Introduction (Cautionary Comments)

My recent records on SGX Stocks has been disaster. So much so that i actually contemplated if i should ever buy into this counter that i have researched about. After some consideration, perhaps blinded by the need to overdrive and greed to achieve my targets, i have decided to throw the dice and gamble again by going back into sgx stocks. I can only do as much research the rest will have to leave it to fate and luck to decide my wealth.

Prior SGX Stocks Purchase

Profit / Loss

HG Metal

Loss (-7%)

Hotel Grand

Loss (-0.51%)

Samudera Shipping

Profit but Current Price higher than Sale Price

SUTL Enterprise

Loss (-0.51%)

Therefore it is very important to consider the above before actually reading further. 

Company Introduction and Thesis

The company that i will be sharing today is Ossia International (SGX: O08).

The Thesis for the company is: Golden Hour Arrives but Storms are ahead. Is current price mispricing?

Company Business Segments

The company can be broken into 2 portions. The first being its stake in Harvey Norman Singapore and Malaysia while the second will be its retail operations in Taiwan. 

The first segment as the mentioned earlier will be retail operations of Harvey Norman Singapore and Malaysia which has online sales as well as brick and mortar sales. Pretty Straightforward.

The second segment being its retail operations in Taiwan. The company distributes Columbia , Kangol, Tumi, True Religion and Sorel products. They can operate as standalone stores found in Shopping Outlets such as Taoyuan , Retail Spaces found in Shopping Malls such as SOGO or via their own website store or web stores on PChome.

(An example of the store layout in a taiwan departmental store)

Thesis for Buying

1) Solid Singapore and Malaysia Operations. 

Contrary to popular beliefs that brick and mortar will rip due to ecommerce and all, harvey norman's Singapore and Malaysia Operations have shown a good growth in profitability across a 5 years trend.

Profits rise from 25 million in 2018 to 45 million in 2022. Similarly, Revenue has rise from 489 million to 637.96 million. 

2) Improving Operations in Taiwan.

Taiwan's operations have always been stronger in the 2nd half (Sep to March). This is largely due to its brands such as Columbia selling much better when it is winter season compared to summer season. Taiwan experiences colder temperatures from Sep to March, with temperatures falling to 11 or 12 on some days.

With the brands including travel theme such as Tumi and Columbia (buying of winter clothes to travel), this is definitely a play on travel resuming in Taiwan. At the same time, Kangol has been a relatively well known brand worldwide outside of Singapore. I am always happy when i see someone wearing Kangol in South Korea or Taiwan.

As such, i do expect that the revenue will be stronger this 2H and gross profit will follow as well.

While i have not found any clear indication that revenue will be stronger(if i had the time i probably would want to monitor things at 台中 on a weekend where i am finally free), a couple of things i noticed that reinforced some beliefs in the company are as follows.

(Level of Relevance: High. Article in October 2022 saying that Columbia Jackets are hot sellers and record double digit increases in Climbing brand jackets. Due to its ability to be multi purpose of waterproof and windproof.)
(Level of Relevance: Low. Munxin Revenue from Sept 2022 to March 2023. Munxin is also one of the listed taiwan companies that has spaces in retail mall operations. While there are some overlapping similarities, it is more of a fashion/sports distributor. However, i use it as a gauge of how retail operations are doing in Taiwan. The double digit increase is encouraging to me but is more of a good to know.)

(Level of Relevance: Low. Columbia LAAP Distributor Data. Good to know its up low 80% but knowing that Taiwan is a small country and the revenue for a full year is not even 30 million, a quarter of revenue is a small part of LAAP.)
(Level of Relevance: Mid-Low. Samsonite Taiwan Revenue in 2022. As Ossia only has Tumi segment, which is under Samsonite (which has multiple brands such as Samsonite itself), this is good to know but unlikely to provide much analysis as Tumi might be a small portion only. In fact pre-covid, Taiwan Revenue was 20+ million USD, which is larger than Ossia Taiwan Revenue. This is why the data is Mid-Low)
(Level of Relevance: Mid-Low. Taiwan Operations hiring on a job site. If anything about this website is accurate, then the hiring of 17 people when total workers is estimated to be 180 which is close to 10% shows healthy signs)

(Level of Relevance: Mid. Kangol Taiwan Website Traffic Data. Good to know that more people in taiwan are surfing the site which shows its increasing presence in taiwan. As it is possible to purchase from the site as well, this could mean more profit.)

(Level of Relevance: High. This is the 6 months profit of Harvey Norman Singapore and Malaysia Operations. While it is good to see a 30.8% growth, it is good to see that the AUD weakening was not a strong reason to be contributing to profits.)

(Level of Relevance: Very High. 2Q 23 refers to October 2022 to December 2022. In terms of total sales, Singapore and Malaysia has recorded a 6.8% and 6.2% increase in retail's usually strongest quarter. This increase is in constant local currencies which makes the comparison more compelling. In fact it was one of the decisions that compelled me to press the buy button when i already dun have much ammunitions remaining.)

Company Owner Information

George Goh is the Group Executive Chairman and the Goh Brothers own more than 50% of the company. As George Goh is recently more into updating his information and social profile, it is much easier to find more information about him and what he does. With more increased public exposure as well as the increased sharing of the Harvey Norman Story in recent months, i would believe that things are looking up or at least looking decent. 

(George having a board meeting in Malaysia Harvey Norman)
More information about George Goh
(Interview with Zaobao. Published 12 February 2023)

Company's Longer Term Directions

One of the critical comments about my investing style is that i am someone that does not look a longer term horizon and paint a story and analysis about the company. 

My view towards that is that i do not have such visionary sense and i am more concerned about how much % i can make from a company in the short term compared to a story that might go wrong some how. 

Imagine painting a story of a certain property company in china making its recovery in 2026 and 2027 because it has sufficient balance sheet and diversification as well as the know-how and all. Even if the story is compelling, it is hard to estimate the gains made in 2026 as well as the opportunity cost might be too huge. To begin with, story telling is good for earning a job but rather hard for the portfolio especially when i just want to overdrive until i bang my head.

Back to Harvey Norman Malaysia, it currently has 28 stores. At Harvey Norman AGM, it has been announced that they are looking to increase the number of stores to 80 stores by 2028. 6 years. 52 stores increase.

This is a roughly 10.6% increase number of stores per year. Of course to satisfy some people we need to start painting a story and a thesis (as much as i don't like to do it). 

First off, we need to find out if increase in number of stores has been a success at Harvey Norman Malaysia Operations. From the graphs below, we can see that revenue has increased as number of stores increase. In the initial years, when stores increased from 18 to 23, there was a impact on store per revenue but it has recovered in recent years which is expected as it takes time to ramp up revenue at a store and dependent on when a store is opened it will affect revenue as well. Taking a bad case of 0.9 million per store, we are looking at 720 million revenue. Which means profits could close to triple.

Of course, as good as this story sounds, it is good to have an overall direction but a lot of tracking is needed. After all, they have announced this back in 2019 but Covid delayed a lot of what they wanted to do.

Lastly, it is also worth noting that i called it the golden hour before the storms. In fact, the storms are things that everyone are familar with. Inflation increasing cost of living, Increased Housing Prices in Singapore, Negative Economic Growth Fears as well as Unemployment Fears, High Interest Rates. These are likely to affect consumer sentiments of retail although if you ask me truthfully, i would say Harvey Norman has already performed better than its peers (more on that later). Also, it has done well in the past 5 years especially recovered from the Covid Lows.

In fact, in January 2023, sales are lower. While it is unsure that how much of this is due to CNY effect, Malaysia Retail Sales remain strong. Personally i think that Jan to March is less of an important quarter compared to October to December hence it is likely to play a lower role.


We have a company that trades at a PE of less than 5 based on Half Year Results and Book Value of 0.65. Profit of Harvey Norman Singapore and Malaysia Segment for July 2022 to Dec 2022 has been higher than Jan 2022 to June 2022. Also, sales growth is seen from Oct 22 to Dec 22 (which is not reflected in Ossia Half Year Results which ends at Sep 22).

In the Taiwan Segment, it has been improving year on year and with cold weather in Taiwan and the resumption of travel, i expect things to be better as well and record higher profits.

Last but not least, the executive chairman is someone who has a decent profile and has increased public exposure in recent times.

I wish there was more liquidity in the stock and i have more ammunitions to add into it.

Peer Comparison

Senheng is a eletrical retailer in Malaysia. Also one of Harvey Norman's Malaysia Competitor.

It recorded a decrease in revenue of close to 3% quarter on quarter. However, Harvey Norman has recorded a increase in revenue of 6.2%.

Wednesday 12 April 2023

Review of a SGX Stock that IPO-ed in 2021. Econ Healthcare (SGX: EHG)

 Recently a thought came to my head, i wondered if the IPOs on SGX might have been getting worst or even underwater. I am not sure but when i see headlines of Digital Core Reit, Manulife US Reit , it gives me this impression

As such, i decided to as and when i feel like it, review some of the SGX Stocks that Ipo-ed in the past years.

2021 is likely a good year to start. The company would likely released its FY 2022 results being in a more 'clean slate' due to lack of IPO Fees.

The first company that came to my mind was Econ Healthcare (SGX: EHG)

Basic Info

Business Model: Operation of Nursing Homes / Elderly Aged Homes

IPO Price and Date: 28 Cents ( 19 April 2021)

Current Price and Dividends Declared so far: 19 Cents and 1.2 cents

Total Loss = 27.85% in close to 2 years.

Implied PE = 14.39

BV = 1.28


4.7% Improvement in Profit, while other income such as grants by government has been the main reason, it can be deduced that the company benefits as it would have been translated into revenue anyway.

     On 1 look, it seems like a good company for a staff to work in, as the increase in staff cost is the same amount as revenue increase. But we would have to factor the increase in subsidies from government and then all in all it looks ok.

Unfortunately. a likely one-off other operating expense due to their new Henderson Nursing Home and a slight increase in utilities as well as depreciation expense meant that profit only grew by 10.8%.

With overall occupancy at 77.9%, there is definitely more room for revenue to grow? Lets find out.

Revenue = 21.215 million. 

SG Revenue & Occupancy Rate: 18.39 million & 96+% 

Msia Revenue & Occupancy Rate 2.609 million & 77.5%

China Revenue & Occupancy Rate 0.212 million & 77%

Hence at full revenue, 22.80 million is possible. 26% revenue growth. Not great at all.

Looking at tariffs has stabilized, the company just have to be more proactive in growing its occupancy rate and profitability in Msia and China. Then it is likely to have a better 2h compared to 1h. Furthermore, its cash flow is supposed to be better as most of the gains in revenue and other income is eradicated by depreciations as well.

Looking on a more long term scale, it has a 732 bed in Sg upcoming in 2025 while a 280 bed in China in 2H 2023. While i am excited over this 732 bed in SG in 2025 as this is inline with government policy to add 5000 bed from 2020 to 2025. It also represents a potential revenue increase of over 60% for SG Revenue, its strongest source of revenue and profitability.

Red Flags

1) Company has been involved in stock scam scandal before, putting in money into a pump and dump hk scheme stock and following which have been duped as the share has rapidly decreased. If an investor like me could tell that it had no earnings and no dividends record, i am pretty sure the reason

Negative Profit from 2019. Simple Yahoo Finance Search
A check using hkex website can already indicate the previously declared dividends = 0

As such, the PR Answer and lack of stock screening before deploying 3.992 million especially when the ipo proceeds was 7.5m with 2.5m going into ipo related expenses.....i find this really unacceptable.

Though i do admire the courage as the company continues to go on with its core competencies.

2) Nice Mistake but lets pay more remunerations.

It baffles me how the founder is paying himself more for making an investment mistake which caused the company to be barely profitable and dividend to be lower than what one might had expected.

2021 Remuneration (250k to 500k)
2022 Remuneration (500k to 750k)


I reckon we will see an improvement in results slightly and slightly. As there has been no disclosure of financial assets, the FY that just past will likely be better than the previous year due to the lack of losses from the pump and dump scheme.

Should it focus on its beds occupancy and profitability in China and Malaysia, its bottomline will grow as well. However, with a lack of economies of scale in these areas as well as a different demographic and spending habits, it remains to be seen how much of success it can be as the non controlling interest is still unprofitable (which indicates that the overseas business is loss making).

As for its 2025 expansion in beds, well i still think that at current PE and the time / risk involved needed, its just not worth looking at buying the stock at the moment.

In other words, its 2025 earnings expansion capability does not warrant a buy at this moment. If the company trades at a PE of less than 5 while showing growth in the FY that past and the current FY when we are in 2H 2024, i might actually relook the landscape and the company again then.

Based on its current performance as well as the abrupt increase in remunerations and lack of controls, it rightly trades at below its IPO price.

This just reinforced my initial thoughts that the quality of SG IPOs in recent years might be going down hill.

Sunday 2 April 2023

First 3 Months Return of 2023 = 10.71%

 First 3 Months Return of 2023 = 10.71%

The main reason why i am posting this is i believe that it will trend lower so it's just me selfishly posting it before it drops.

Reasons for it to likely trend lower
1) AAG Energy Meeting on 27 April. Currently it is 40% of my portfolio. Assuming the lowball deal goes through then it will add 4% to overall gains while if it falls through, it depends on market perception of the price in the short term. It could fall 20-30% which means that it will inflict a 8 to 12% on my portfolio and reverse the gains made.

My current plans is to add on failure and if it sadly succeeds then i will have to go back to the playbook to find a stock to deploy into but this means higher risk and as such returns are likely to trend lower as well.

Performance Thoughts

I think 10.71% performance is way too good for this 3 months. Considering the sizing / decisions / effort that i could have put in more but i was busy with other stuff.
Mostly SGX- Related Calls went bad but my next purchase if i had the funds to would also be SGX Related. When the time comes i will think about it again whether it would be sgx or hkex stock

2 Stocks that definitely produced mixed performance on my portfolio is Justin Allen and Winox Holdings

Justin Allen did not continue with the growth of pieces manufactured year on year but recorded better profits and margin with an eye on expansion therefore slightly reducing the dividend declared

Winox Holdings recorded slightly better profit but 2H 22 was slightly poorer than 2H 21. This was kind of expected as they have been hit by the lockdowns and had to volunteer to do covid test as well. The slight concern is the push back of the expansion project of factory but the mitigating factor is a higher dividend declared and margins / profits are better despite lower revenue.

Will probably go back to monitor these 2 companies when i am free but then again i am unlikely to make any purchases in these 2 companies before the 27 April AAG Meeting unless i see any revolutionary news or drastic drop in price.

(One of the reasons why i am busy recently)