As mentioned previously, i will only make changes after some consideration and sometime in March.
Considering that i will be busy for the next 2 weeks. i will just write down the changes first today.
But first the above is a snap shot of the portfolio before any changes on as of 18 March
Changed Portfolio as follows
Rationale for Position Removal:
1) Wee Hur - Since i have cut off most of the stake in my own portfolio, i would do the same here as well
I express concerns over the investment properties fair value as well as the AUD Depreciation which would affect earnings and divestment value. However, i do concur that the company will be very strong in financial health after the divestment deal goes through.
If i am free i will attend the AGM...... i don't rule out re-adding back in the future if say prices of dorm rocket again or they give hint of very good special dividends.
2) Tat Seng Packaging - Although a good consumer theme play in china along with the recent news of consumption stimulations will likely benefit Tat Seng, it was meant to be a short term results play for myself so i will take a look again perhaps closer to its results release again in August to see if i should pick it up as a tactical play again.
Rational for Position Addition:
Belief that Pre-Cast Demand will be a strong theme in 2025 with many BTOs to be completed.
2 Companies that i believe will benefit are the 2 stocks that I have added.
1) Hong Leong Asia - Perhaps a more diversified play with the China Engine Market, SG Msia construction business. Overall i think that its low utilisation precast factory which is run as a joint venture should finally benefit from this trend.
2) Hor Kew - A much smaller company and much riskier play due to its profitability being very shaky before 2024. As such, the stake is much lower and will explore further to see if there is any chance to add more. One thing i feel is good is that its commentary of future prospect is not a copy paste each year. When they mention about concerns over cost and margins, they do reflect it in the following result.
1H 2022 Commentary: However, inflationary cost pressures of staff and raw materials may erode the Group’s future profit margins.
As a result 2H 2022 is loss making with lower gross profit margin than 1H 2022.
1H 2024 Commentary: To manage this, the Group has been tendering for projects with prices that are expected to yield higher margins, thereby improving its overall gross profit margin as old projects get completed and newer projects start deliveries.
As a result 2H 2024 Margins is 49% compared to 1H 2024 which is 29%.
2H 2024 Commentary: Demand in the Singapore construction industry was strong in FY2024 and this trend is expected to continue in the coming year. The order books for the Group also continues to be strong.
Companies that i thought about it but did not add / increase
1) Centurion. The belief of the REIT as a short term catalyst still holds.
2) Hafary. Might be a good BTO boost play but i realised that it has many lines of business and over 30% revenue is not from SG with revenue from SG showing some retracement as well.
3) Far East Orchard: Student Accomodation should still do well but i don't see any near term catalyst to bring the weightage up.
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