Frontloading refers to buying-in anticipating that results would be good.
It is an extremely risky way of purchasing shares.
I am actually not sure how many investment writers / youtubers books will actually write like that or share such content.
In fact, whenever i want to frontload, it reminds me of a life story.
In one of the job interviews, at an IFA company for an investment and admin role, i pitched a stock and i was told that i am actually a 'frontloader / cyclical investor that looks to get in for a gain of 20 to 30% before disposing the stock' I think the stock i pitched was Tat Seng Packaging. It triggered a mini bulb in my head that if i can keep doing this then won't it be amazing.
October 2019: 2.75
Back to the main topic, to do many Financial Analysis (FA) and learn from it and then review from any mistakes and keep doing FA is kinda fun and keeps me on my toes so i can keep tabs on different companies. It also serves as a list that i can refer to if i need ideas.
For Folks who have not read the previous post which was frontloading for companies that report results on 30 September 2025, you can read it here.
The previous result is as follows
Moving on, now we look towards front-loading for 31 December 2025.
Before going on to the list, i will talk about a few stocks that i have took a look but it did not hit my list.
Zengame (Hkex: 2660) - Revenue should be on par or 5 to 10% better than 1H but having distributed a good dividend in 1H and unsure on strategy of marketing spending which affects profitability, it did not fill the list.
BHCC Construction (Hkex 1552) - Any SG Construction Stocks with less than 5 PE would be interesting given the valuations seen in SGX. Company has performed better in margins for 1H 2025 and current orders to be fufilled in the upcoming year is 7% higher than last year.
My main concern is their industrial property development segment (Food Point is not selling well as a search seems to indicate 60% sold) along with the relatively high gearing.
Of course there is the competition from Powermatic's Food Industrial Property which has much lower base cost as well.
IGG (Hkex: 799) - Would have make the list but New Game results remains low grossing even though it has hit a higher ranking in December. Current games have poorer ranks compared to 1H so a lot of growth and profitability has to be driven from advertising which is a black box . Encouraging sign is that the share buyback has continued throughout the 2H.
Bamboos Health (Hkex: 2293) - Gold Price surge should provide a good other income gain if they held on to their gold investments. Its too hard to gauge or estimate the revenue from staffing although in a recent interview they say it would be better and longer term it would be higher as the staffing is supposed to increase and the drop is temporary.
The list is as follows
1. Nagacorp (Hkex: 3918)
2. San Miguel Brewery (Hkex: 236)
3. Perennial Intl (Hkex: 725)
4. Chuan Holdings (Hkex: 1420)
5. Mainland Headwear Holdings (Hkex: 1100)
1. Nagacorp (Hkex: 3918)
In 2025 1H, it has seen a rebound in its results as chinese tourist has came in and mass market margins which is better already in 1H has also improved in revenues in 3Q.
Tourism numbers remained strong in October and November as well
The downside is that when we think of Cambodia, there is more bad news than goods news.
This will still prove to be a stumbling block although tourism numbers for 2025 for Chinese to Cambodia is up 40%.
All in all, results might be able to surprise on the upside and core earnings should be below a PE of 10 (which is reasonable in my senses).
2. San Miguel Brewery (Hkex: 236)
Investing Thesis: Surely this year earnings will be better?
I think the biggest problem with this company will be balancing their international revenue which is a main driver of their income.
2024 was a slight dissapointment as they had to impair their factory and if that was excluded, results would have been slightly better.
This was boosted by their steady revenue they secured from a long 10 to 15 years lease out of their building.
In 1H 2025, they have turned around the margins.
In 2H 2024, they are actually unprofitable in terms of normal business operations, turning profitable due to the rental income and then once again unprofitable as a whole due to the write off.
Interesting to see if this impairment will make margins better or if any boost in international revenue can let them find the break-even point. But the normal case is that even if it is unprofitable by a little bit, the rental income will cover.
I think 75 million should be do-able. That is around 19 cents EPS and around 6+ PE .
At, 0.68 book value and 26% of market cap being cash, this is probably the deep book value investor's paradise.
How high this can go will depend on the dividend / 2H Company Operations.
3. Perennial Intl (Hkex: 725)
A company that produces wires and power cords for electrical appliances with majority of revenue going to US.
It is a company that has benefitted from 1H as there is a surge in demand due to front ordering.
Also, margins have improved from 2023 up till 2025.
Perhaps 2H 2025 might not generate the same amount of profit as 1H 2025 but i think it will not be as bad as there has been hiring in Vietnam despite only having 880 Staff.
Also, productivity improvements and shift to Vietnam would be beneficial to the company as well. Shows that it is able to handle increase in demand well.
Moving on to a Singapore Construction Stock, i think this is a very interesting stock if we strip off the 2 negatives.
A. Not paying a dividend.
B. Rights Issue in 2023 and Interested Person Transaction Acquisition in 2024.
Why this stock is interesting.
A. Improving Earthworks Margin
B. Acquiring of Dormitory
The company made an Interested Party Transaction by acquiring a dormitory from its major shareholder for around 46 million.
Considering that this announcement is in Feb 2024 and the rental income is low while latest lease expires only in April 2025, i think there is much upside to it.
C. Improving Orderbooks
Worth noting that the recent orderbook wins are also mostly in Earthworks which is the better margin.
D. Tender Victory for Dorm
While unsure how large this dormitory is, the lease price paid by the company is close to 2 times of its previous tender for a 1008 bed.
With only 654 employees, the dorm tender along with the dorm acquisition in 2024 provides good headspace for increased headcount and also cost savings if needed.
5. Mainland Headwear Holdings (Hkex: 1100)
Recovery in Earnings driven by Improved Bangaladesh Operations, Mexico Operations and Lack of 1 Off Settlement due to scaledown of China Operations.
Probable double digit increase in revenue.
The company made 13.8 cents EPS in 1H 25. Unfortunately, exports from Bangaladesh to US in 2H 2025 is around the same as 1H 2025 so lets hope that they are able to maintain this revenue.
My estimation is that they might make lesser than 13.8 cents as 1H Margins might be higher due to some panic ordering. Around 10 to 11 cents might be possible. This brings the PE of around 6. There will definitely be a positive profit announcement, its just what is the amount earned in 2025.
The company has one of the biggest cap factories in Bangaladesh and has a town built around it. As such, to say its capacity is one of the largest would probably be true.
As for longer term, a storage warehouse will be built beside their Mexico estimated to be operational in 2H 26. Also, they have decided to turn the Shenzhen land into a e-commerce industrial park.
The worry is that its acquisitions in its trading business have been losses so hopefully all these implementations and investments turns the business around and becomes a new profit driver.
Though if Mexico does turn profitable, then having a profitable factory in Mexico after 2 years and an increasing profitability huge factory in Bangladesh really shows good foresight and entrepreneurship in the owners.
No comments:
Post a Comment