There is actually a lot to talk about this month even though returns seems flattish.
The biggest talking point would be Nam Lee Metal's announcement on 31 October after trading hours where its MD was interviewed by CPIB. It is worth noting that the MD is not a major shareholder of the company but has been in the position since 2019.
When i first saw this announcement, i went to search up previous sgx announcements that are related to CPIB. It is worth nothing that, there was no charge / bail required nor passport surrendered and company is not involved.
Notably, the previous few companies to enjoy posting about CPIB is Seatrium, Singapore Kitchen Equipment , HPL and Jubilee
In Seatrium case, the company is involved and is informed by CPIB.
In Singapore Kitchen case, the company is involved, interview on 10 sept 2020 but halted only on 11 sept 2020. Bail needed and passports confiscated
In Jubilee Case, it involved the company and bail is required.
After reading the various previous cases in other companies, i would say for now , it seems like the matter involving Nam Lee is not as severe compared to other cases.
Also, there was no large share price fluctuations on the day of the halt or the past few days leading to it (which might be a hint of MD being convicted and decided to inform friends or related parties to dump the stock before informing the company about it.)
Having said that, it seems like someone really wants him convicted because the whistle blowing report to the company's audit committee in FY 2024 did not have any effect and thus another report on similar line of allegations is lodged to the CPIB this time.
However, i would be keen to know what are the procudural lapse and control gaps as well as what are the actions done to improve internal controls.
Of course, these are my own inference made from current information available only. Should there be more updates then the view might change.
Having read all of it, i have no intention to make any changes to the position upon resumption of trading.
Having said that, there will still be changes made to the portfolio.
Removal: Singpost and ChinaSunsine
Addition: XMH and Singshipping
Rationale for addition
Singshipping: I am just adding it for 1 month to see if there is any earnings surprise with regards to the lease extension of the ship whose previous price was set in 2010.
XMH: This is a fintwitter / substack favourite stock that i have read recently.
The current concern is the Indonesian tax which is a big earnings detractor if they fail in their appeal and have to pay as it is half of their 2025 earnings and it was for the year ended April 2024 which means 2025 they would have to pay even more given the higher earnings.
However, they have a factory which is largely undervalued as it has not been revalued for 5 years and their generator sets operation in Johor Malaysia is largely related to data centre projects which has been booming there and the recent sale of stake to their supplier (Mitsubishi Heavy Industries) also strengthens the partnership and allows for future expansion plans to be done easier since the supplier is a shareholder as well.
In terms of valuation, this allows for a sum of the part valuation. Which values the distribution business, and other portions such as the factory in Singapore cheaply.
Ending Thoughts
My conspiracy theory will be business might be too good at Nam Lee such that there might be internal struggle for power.
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