(March 2024 Results) How i would invest in the singapore stock market if i had 100k of spare money

 

March 2024 Returns: -2.93%

Year to Date Returns: -0.07%

Since Inception (9 Sept 2020) Returns: 74.21%

There is nothing much to report about with regards to March as companies already reported their results in February.

One thought that i had in mind was whether to shift Huationg Global out of the portfolio in this imaginary portfolio as well as my real portfolio.

Why sell out?

-Despite decent results, one of the major shareholders was disposing shares and as such it might have proved tough for the stock to record any capital gains

-On the other hand, dividends was conservative and somewhat not really ideal.

Why not sell out?

-Does not make sense to sell out of a stock that is <2 PE and has good cashflow and reduced debt

-Increase in refundable deposit might signal higher dormitory revenue moving forward

-Effort needed to replace the stock. As always, if there is something else that caught my eye then it would make the switch more attractive. Push/Pull.

With this thought parked somewhere at the back of my mind, i embarked on a trip to Korea in March. After returning, my mind is pretty much set on not selling for the time being.

So what happened in the trip to Korea?

I met a fan who is also from Singapore. It happened just so that we were both there to support the same group and i had a chit chat with him.

Turns out that he works in a foreign owned construction firm in Singapore and in the finance department.

We then had some chit-chat with regards to the construction sector the past years and in 2023/2024. 

I mentioned that dormitory prices have been increasing and asked if he was aware of it. 

Turns out that he does know the prices of the dormitories that his company has been paying and the terms. This instantly sparked my interest to know more and i also treated him a meal as well.

(Huationg Global Dormitory Revenue from its Results)

It is always good to hear from a view of a customer.

From my understanding, some of the dormitories that they are paying could easily go up to 660 per bed per month. This is of course dependent on where they stay etc. 

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After typing for so long, the question would be ? does he know anything about Coastal Dormitory? Turns out he does.....so i was able to get the rate that his company is paying currently as well as when was the last time the price was changed and more information such as prices in the past year etc.

Unfortunately Coastal Dormitory is actually one of the 'cheapo' dormitories around. As you can see from the 2H 2023 results, price per bed is only 395 when beds can be going up to 600+. Due to its inaccessible location and being located far from many construction projects apart from the T5.

I will not be saying the price that they are paying as it is sensitive information (lol). But all i can say is that i expect 1H 2024 Revenue to be higher than 2H 2023.

Low Teens increase(from 2H 2023) in revenue is something that i would expect to see based on my understanding. However this is subjective because some folks might have renewed earlier while some later and as such rates can vary for everyone altogether as well.

So for now i will be staying put and holding my position (at least until the AGM is over, which i hope i would have time to attend)

(Results Released Thoughts) Dream International

Back in January, i released a preview of my thoughts on the results.

The concise portion was what i wrote below.

Concise Version

2023 Revenue Fall Compared to 2022 is likely, with any growth in profits to come from margin expansion / revenue growth in Plush Stuffed Toy.

Revenue from Top Customer in 2022 will fall in 2023. For 2023 revenue, Japan and China should see revenue growth while US it should see revenue decrease compared to 2022.

I am still optimistic that we will see profit growth for FY 2023 compared to FY 2022.

Safe to say. Everything is correct. 

(This image probably describes my mood/emotions after seeing the results)

What I like about the results

1) Since everything i mentioned is correct, then there is nothing to point out. But something incredible would be......its increase in cash position. 

The company started 2023 with 761 million HKD cash and current liabilities of 1126 million HKD.

At 30 June 2023, it has 845 million HKD cash and current liabilities of 1003 million HKD.

At 31 December 2023, it has 1390 million HKD Cash and current liabilities of 896 million HKD.

This to me is some remarkable cash generation year.

(At 31 December 2023)

(At 30 June 2023)

2) Adaptability of its production. With its top customer in 2022 cutting its orders and resulting in a revenue fall of close to 1 billion hkd or 50%....Dream was able to claw back in some ways and tap on Customer A and C which contributed a gain of close to 400 million.

As a whole, revenue still fell by around 900 million or around 15%. This was kind of expected looking at the export data as well as how the toy companies have done in 2023 amidst a bad retail environment of overstocking etc.

3) Margins. 

A question on the minds of many will be whether the margins are a fluke in 1H 2023. After all with plush stuffed toys 30.17% margin , many might think that it is a one-off. While margins in 2H 2023 did not improve, it still is remarkable at 28% as it is the highest 2H margins. 

The 17% margin for its plastic figures is also laudable considering revenue for 2H is one of the lowest since Covid Started.

Interestingly enough, utilisation rate for 2023 is 84% with lower labour cost compared to 2022 which has higher revenue, higher labour cost but utilisation rate of only 80%.

So that is some food for thought.

Overall, 26.83% Gross Margin for 2H 2023 is the highest since 2018, and also i believe the highest in its history.

How about 2024 then?

Well at current stage, we are only about 3 months in. From whatever data that i have seen across the board, it is relatively mixed. Which means i am pretty sure there is no positive profit alert coming for now.

Funko's revenue guidance for 2024 is actually similar to 2023. Therefore, it is rather unlikely that we will see any revenue growth from that end. Even if there is, it might not be significant.

Theme Park Demand ? . I guess we have to see the guidance given from Oriental Land in April before making a more informed decision.

Export Data for Jan and Feb seems muted, lower than 2023 by around 20% . Though to be fair, 2H 2023 Japan Export compared to 1H 2023 was 40% increase but revenue is only 9% for Dream. Therefore the indicator's accuracy leaves much to be questioned.

For Industrial Index of Production (Manufacture of games and toys) 2024's first 2 months is about 4.5% higher.

There is also Customer C, which increased its revenue contribution by 30%....

It really is still early days i feel. 

K-Pop Pictures Spamming Time.

(It really is anyone's guess at this point)

(10/10 Results)