Portfolio Update October 2018

Today I observed a strong window dressing. However, HSI posts the worst performing month since 2016 after window dressing. Some of my counters got adversely impacted by the market. However, the window dressing covered up part of my loss.

As we can see from the table above, the index value of SGX down 7.31% in October, and HSI down 9.88% in the same period. My portfolio index value down 0.87% in October, which is a satisfied result to me. I closed my AUD position and change it back to SGD, as MAS might appreciate SGD and I don't see any force behind AUD to appreciate it at the moment. Kindly correct me if I am wrong, as I didn't do well in my Econ Lecture in college. I saw some political uncertainty in Australia, and I am also concern about the growth of China GDP, which got a heavy impact on AUD.

I started to average the costs down of my holdings. I bought Rivera and ND Paper in October. I will slowly increase my stake in these companies which gives sustainable dividend and I believe I will be able to further average down my costs with the dividend. I am also waiting for Keong Hong report to see if I shall further increase my holding in this company.

As mentioned in my previous portfolio update report, I expected that Air China SSE will drop. Even though today this counter up more than 5%, it is still lower than September closing price by 8%. Without today's window dressing then it should be lower than September closing price by 12.5%! I shall be able to buy it below 7 or even 6.8.

I am also going to increase my investment in China Banks. I will be investing in one of the Major Government Linked Bank in China. I will look into their ROA and bad debt ratio before reaching the final decision.

As mentioned in the last market review, we saw STI went below 3000 in October. I am expecting it to go down again.

Beside this bloody market, I received some good news in this month. I passed my F5, F6 and F8 exams and ACCA notified me that I am the best performing student for my F5 exam in Singapore! Now I got something new to add into my resume ~ I am also going to start an internship with one of the Big 4 and really looking forward to it.

Happy investing. Thanks for reading.

Cheers.
 

SBS Transit - Ticket Price Adjustment?!

Yesterday PTC said that it will implement the maximum allowable adjustment quantum of 4.3% for bus and train fares starting from December 29. Even though the adjustment for students and senior citizens will be capped at 1 cent, for most of the people who are using adult transport card the adjustment will 6 cents per journey.

I looked into their 1H report, I realised that while the 1H revenue increased by 17.8%, their total operating cost increased by 16% only. If we look into the details, we can see that repairs and maintenance costs increased by 30.3% and fuel and electricity costs increased by 35.4%. However, the biggest component of the total operating cost is staff costs, which account for more than 50% of the total operating cost, increased by 11.4% only.

I also noted that the finance costs decreased by 16.9%, and their total liability decreased by 6.6%. There are not many changes in terms of borrowings. The cash position was also healthy and the company got positive operating cash inflow for 1H 2018.

I don't really understand the reason behind the bus and train fares adjustment. It doesn't seem like the company is doing badly and need to increase their revenue to cover their interest expenses or daily operating expenses. The company got healthy cash flow with good cash position, and their biggest portion of operating expense increased at a slower pace compared with the revenue. So in conclusion, the fare adjustment will increase the company's profit before taxation, perhaps by another 60%. I took the revenue from 1H 2018 and multiplied by 1.043 to get the revenue with fares adjustment. Assumed that the revenue and the total operating expenses didn't increase (or perhaps they will increase by a similar speed), so the profit before taxation will be increased by around 60%.

If we view this adjustment solely on an investor's perspective, I guess this fare adjustment is a good news for SBS Transit's investors. The cash flow will be much healthier and I believe they will be able to distribute a higher dividend.

Will... Perhaps I shall buy some SBS Transit to hedge my transportation expenses...

DYODD.. I can feel the pain of my wallet ):

Market Review

A few months ago I wrote in my investment journal that I am interested in Air China listed on SSE. The price was 8+ cny at the end of September, but I wrote in my latest investment journal that I believe the price will drop again. At the time of writing Air China is trading at 6.98 cny. However, the PB is still above 1, so I guess I have to wait for another few months.

STI might drop below 3000 in the next few months... It sounds bad. But, today SSE closed below 2500. Can see the blood everywhere... I am thinking when should I average down, however I got very limited bullets, and it is a difficult decision to decide when to enter the market.

I transfer my aud back to sgd this month and realised a loss of few hundreds. The loss is offset by the appreciation of hkd.

I just read Tai Sin annual report. I guess there is nothing special. Increasing competition in the industry and cost of inventory, the profit is decresing when the turnover is increasing. The board even cut the dividend from 1.6 cents to 1.5 cents, but it is not a big deal. I am more concern about their cash flow. Given that the dividend level should be able to maintain at the current level, I will not sell my shares at the moment, but I would not increase my shareholding as well.

Hope everyone can survive in this bear market.

Cheers.

Portfolio Update September 2018

Nothing special happened in September.. Except that I went to the Centurion Shareholder day trip. 

I sold YZJ in the month and recognized the gain in less than a month after I bought them. The share is trading at an even higher value at the time of writing but I got no regret. Recognized a 28% gain in less than 1 month is more than enough. 

I am thinking of transferring the Australian Dollar in my account back to Singapore Dollar, as I found the strength of the Australian Dollar is getting weaker. US-China tension might even have more negative impacts on it. Currently, I am sitting on a 4% loss for the Australian Dollar. 

In September I also received the dividend from Goldpac Group. I realized that the dividend credited into my Poems HongKong Dollar account is not subjected to the foreign dividend tax. 

 

As the table shown above, my portfolio was underperformed then STI, but outperform HSI. Given that more than 20% of my portfolio is Hong Kong shares, I think the performance is still acceptable. 

I wanted to buy Air China (SSE), but it rose around 20% in a month. This might due to the China National Holiday and investors expected that Air China will benefit from it. However, the oil price is still rising and CNY is still depreciating. I expect that the price of Air China will drop back to the previous level, as the extra income from National Holiday should already be incorporated into the share price as it is a yearly event. The price should not have so much reaction to this recurring event. Air China (HSI) only rose around 11% during the same period, and I expect HKEX investors are more rational so the price is also more rational than SSE price. 

Currently, US-China tension is at an interesting stage. Not sure when are they going to have the talk again, so we must still invest with cautions. 

I completed ACCA F5, F6 and F8 in September, and started to look for internships. Hopefully, I will be able to start my professional career as soon as possible, so I will also be able to collect more bullets. 

Another reporting season is coming soon. Let's see if there are any interesting one for us to put the funds on. 

Thank you.