Evaluating the IGG (799.HKEX) Positive Profit Announcement.

 IGG (799.HKEX) released a positive profit announcement after trading hours on 7 February

(On paper, it looks great as profits grew by 3600%. But in real, it was really expected if anyone had seen the 1H 2024 Financials)

As such, using 1H 2024 Financials to reference to see if there are any improvements

Positives

1) App Business Revenue went from 409 million in 1H 2024 to 691 million in 2H 2024. Representing a good 68% increase and a positive traction is seen.

2) Doomsday and Viking Rise both performed better in 2H 2024 compared to 1H 2024.

Doomsday 2H 2024 = 507m vs 1H 2024 = 493m

Viking Rise 2H 2024 = 391m vs 1H 2024 = 309m

3) Revenue is up as well compared to 1H 2024.

2H 2024 = 3.005 billion vs 1H 2024 =2.735 billion

Negatives

1) Profit from Core Business in 2H 2024 is lower than 1H 2024.

2H 2024 = 294 million vs 1H 2024 = 356 million

Conclusion

Scorecard: 6.5/10

Lords Mobile Revenue likely have decreased which led to the drop is core business profit as it is the game that has the least reinvestment of revenue into marketing and ads (and as such better gross and core profit margin)

It is not a bad result from the looks of revenue but in terms of profit it definitely is not as ideal.

At $4.51 HKD , it represents a PE of 8 which is not expensive when compared to index but is relatively expensive for small and mid cap hk games coy.

Much attention will be on the growth target and profitability of its App Business for 2025.

If they can pull off another 50% Revenue Growth from 2H 2024 to 1H 2025, this probably means 2 billion revenue(in 2025 for App Business) It would represent a good growth driver if profitability follows.

I think it will likely retrace again on market open on Monday.

Much attention will turn towards the earnings call in March as management would have data of 1st 2 months of 2025 to share as well as their view of 2025 prospects.

Lastly, in Citi's research report, it predicted net profit of 673 million and revenue of 5.94 billion with a target price of 4.50 HKD. The net profit of 580 million and revenue of 5.74 billion both missed their estimates.

(January 2025 Results) How i would invest in the singapore stock market if i had 100k of spare money

 

January 2025 Returns: 6.16%

Year to Date Returns: 6.16%

Since Inception (9 Sept 2020) Returns: 141.50%

First off , sorry for the delay as it is the Chinese New Year period. 

Happy Lunar New Year to the readers.

January is a surprising month actually. With Wee Hur, Centurion , Haw Par and Moneymax leading the gains.

Centurion quickly announced the news of a Reit Spin-off. I would probably have to wait till the prospectus is released before evaluating the whole spin-off as a whole then. I think this would be a good time for a spin-off actually, with the next good time being in 2030 after the dormitory rules have set in and market forces readjust the prices of dormitories depending on the construction demand then.

A stock idea had flashed past my head in the early days of January. I was thinking about how this stock would be placed in the portfolio and rather what i had to remove if i were to add this in. 

After some consideration, i have made the following change heading into the Crucial February Earnings Season.

Please refer to the image below for the changes

I made the tough decision to exit SUTL Enterprise and made the speculative play into adding Samudera Shipping.

A slight worry would be the hotel situation in Sentosa as there has been the oil spill in June and the increased competition of rooms in Sentosa. This can be seen in the results of CDL Hospitality Trust. The hotel business although a small part of SUTL Enterprise, would serve as a good driver of revenue still.

While the marina business will be stable in Singapore....the concern will be the start-up operating cost for the Phuket Marina.

Adding both concerns, i have decided to switch out of the position as i don't anticipate any exciting happening from its results.

Samudera Shipping is a company that has traditionally lagged behind the freight rates and seems to have been forgotten 

With stronger rates in Q3, i think there could be some positive momentum for this to be the same or sustain.

Given the valuations seems attractive on the back of a strong q3 might be spilled over to q4 and beyond for at least 12 months......my view would be that it is worth to hold this thru the earnings season and monitor again from there.

We will evaluate again as the companies in the portfolio report their earnings in Feb. 

Much volatility is expected in Feb and March.