Corporate Visit - Centurion Corporation

First of all I would like to express my sincere appreciation to Centurion Corporation managers. They are kind enough to entertain a small group of retail investors on Saturday morning. I would also like to say thank you to InvestingNote. They organise this half day trip and I found this event is very helpful and meaningful.

The meeting point is at Dwell Student Accommodation @Selegie, one of the student accommodation owned by the company. The accommodation is located next to Kaplan Singapore. Morning was raining heavily, but lucky that it was not raining anymore when I reached there. When I reached there I saw Mr David Phey, the Head of Corporate Communication of Centurion Corporation and two InvestingNote team members were there. Really appreciate that they sacrificed their saturday for a small group of retail investors. We went to Westlite Papan at around 10 am. 

This if the first time I visit a worker accommodation. The building is relatively new. We met the CEO and CIO when we reached. We walked around the accommodation after Mr David Phey gave us a detailed presentation about the company's profile and some financial statement summaries. I realised that the units are quite clean and workers' living condition is quite good. There is also some TV rooms, playing rooms, and a gym in the building. Next to the main building of worker accommodation is a training centre operated by Aspri, a not for profit organisation. The workers get to take responsibilities of their skill development at subsidised cost. According to Aspri director all the courses are fully booked as the courses are quite popular among the workers. I found this training centre is valuable and I believe it should attract more companies to put their workers in this accommodation, so they are able to slowly develop their skills. 

Before we went back to Dwell Student Accommodation @Selegie, we were given a chance to have a short meeting with Centurion CEO and CIO. They mentioned that the company is looking to set up their second student accommodation fund, and looking for investors in Singapore and Hong Kong. They are also looking to increase their accommodation types. During the meeting I asked the CEO what is the marketing channel they are using to promote their student accommodation in China. CEO said they have collaboration with education agencies in China so the agents will introduce Centurion student accommodations to the students. They also employed local employees to do the marketing and they have their official wechat account. 

Unfortunately the meeting is too short for everyone to raise their questions. I guess many people got questions to ask but we have to go back to Selegie as we were already behind the schedule. The student accommodation manager told us that they are also promoting the accommodation through the institutions like Kaplan Singapore. Kaplan Singapore booked three levels of the building and Education First booked one level of the building, then subsequently subcontract to their students. I believe the institution customers are able to get a discount from Centurion, but it can ensure 100% occupancy rate and also the company is able to promote their accommodation through these institutions. The building is quite old but is well maintained. Interesting point to note is that students have to pay 12+1 month rental fee in advance. I guess at least for this accommodation company will not see any bad debt at all. 

The event ended at around 2 pm. This is my first corporate visit trip, and I had a very positive experience. Looking forward for the next event organised by InvestingNote!

Cheers.  

Portfolio Update August 2018

Blood is everywhere in the market now! Seems like sell in May and go away is working again. I have attached the performance of STI and HSI for 2018 below.

We can see that after April the indexes are heading south, and due to various issues and tensions there is no sign of trend reverse yet. In August STI down 3.21% to 3213.48 and HSI down 2.43% to 27888.55. Well at the time of writing STI is 3134.39 and HSI is 26973.47. My portfolio is in deeper red and down 0.854% in August. 

Let me first start with my transactions in August. My plan was to collect different counters slowly. I have bought ND Paper and Lee & Man Paper at the beginning of August. Unfortunately after I bought them it went down more than 10%..... The major reason for them to drop was China imposed new tariff on recycle paper imported from US, which is the major raw material of paper industry in China. Very interesting story is US recycle paper is the highest quality raw material for paper industry, so import from US is not even an option, it is almost a standard requirement for high quality paper factories. Depreciation of RMB was another concern. However I believe that since most of the major factories are importing raw materials from US and will be subjected to higher tariff, they will be able to transfer the cost to their customers. However must be prepared that the next few financial report won't look good, as cost transfer might be a mid-term progress. I don't believe that RMB will depreciate like Argentina Peso, due to China strict foreign currency exchange and transmit policy. I heard that it is more difficult to exchange RMB to foreign currency and all transactions will be subjected to more stronger regulation. Since my plan to build my portfolio is accumulate slowly, I believe that I shall be able to accumulate more of their shares at cheaper price. Although their valuation is higher than Tat Seng Pkg listed in SGX (I bought it last time and earned around 10%), but we all know that STI normally will have a lower valuation compare with other major exchange (due to lower trading volume?).  

I have sold my BOCA few months ago, but it produced an outstanding financial report in August. The share price went up alot even HSI is swimming in blood. Guess I have to put my plan on hold.. It is a really good company with stable financial performance. 

I also bought YZJ at 0.88. That day I saw it gap down from 0.9+ to 0.88 I felt that this is my last chance to buy it. Even though my plan was to wait for it to release its 1H report, but I decided to buy some. However due to my risk management I didn't buy big. The 1H report was outstanding and it went up to 1.14 in around two weeks. I have sold it at 1.13. The profit I made can somehow offset my loss from ND Paper and Lee & Man Paper. The reason of selling was it went up too fast. In fact if my position is large enough I will not realise all my profit in a day. 

SGD is now worth more than AUD. Have to take note of it and it might potentially affect some of the companies in my portfolio. Straits Trading and CDG are two of them. Straits Trading report so so only with huge other comprehensive loss, due to unrealised trading loss. But during current market condition I didn't expect much. CDG looks more stable at the moment, but I believe the growth is limited. However the dividend should be able to maintain therefore I still hold part of it in my portfolio.

I have exchanged some RMB from SGD as I believe that it will not further depreciate. Made very small profit on it at the moment. 

Currently around 25% of my portfolio is still in cash. In current market condition I believe we must take a safer approach. Must identify for companies that are able to survive in the tariff war, and we are able to invest in companies with good reputation at a cheaper cost. I see it as an opportunity, however it really feel bad to see my portfolio in deeper red ): Hope I will be able to generate some cashflow and invest more.

Meanwhile I just finished my ACCA F5, F6 and F8 exams! I think I screwed up with my taxation anyway ):. Hope can pass all exams. Currently also applying for internship to get some work experience. 

All the best everyone! Hope we all can survive and huat in the beat market! 

Thanks for reading.