Keong Hong Annual Result 2018

Finally Keong Hong has released their annual results, when other counters in my portfolio released much earlier in November. I have high expectation in this counter, and I guess its 2018 Annual Result didn't disappoint me.

The 12 months revenue down 29.4% or 69 million. Sounds bad, but the management explained it was mainly due to lower recognition of revenue from construction projects as some of the projects had largely been completed in the previous financial year (well but I guess I have always see this line in its financial report). Fortunately, the company managed to win some projects in FY2018, including National Skin Centre and Mattar Road condo contract, and the order book stood at approximately 376.1 million and last year it was around 344 million at the end of financial year. The company shows that it has the ability to win contracts continuously, however I was concerning about the revenue in Q4 as it down 45.6% or 45 million. In its Annual Report 2017 the company disclosed that they recognise the revenue based on the output method, and the company won its major contracts in earlier this year so I believe that "some of the projects had largely been completed in the previous financial year" didn't fully explain the performance of its revenue. 1.1% of the total revenue was from the investment property in Japan, and I went back to 2017 Annual Report and found the investment property segment asset is around 23 million SGD. So the rental income is around 1.65 million so the rental yield is around 7%, while the interest rate of the term loan secured by the investment property is around 2.6%. Guess it is a good business. COGS down more than revenue so in fact the changes in its gross profit figure is still acceptable. 

Impressively, the company recorded positive results from its joint ventures and associates after disappointing result of associates in Q4, compared to negative results in previous year. Hopefully these are not due to one one-time gain. The company's net profit down 66% or 42 million, but if we remove the one-time gain from previous year, the result is actually better than previous year. To be honest I still don't understand the logic  behind the one-time revaluation gain, as the company is not going to sell its joint venture and it is not a listed company, so the main consequence of such revaluation is that the result looks good on its face. I personally excluded that revaluation gain when looking into this company, as it won't turn to cash in any foreseeable future (at least the management never disclose that they are planning to sell it). 

The company disclosed that the Mercure Maldives Kooddoo Resort has been conferred the Global Winner of the 2018 Luxury New Resort awarded by The World Luxury Hotel Awards. It sounds amazing, but when I check the website of The World Luxury Hotel Awards, there is 4 Global Winner in Maldives. Guess it is not as impressive as it sounds, but at least it is a quality confirmation and recognition. The hotel's rating on Booking.com is 9.2/10, quite good, but it is based on 32 reviewers only. Hope more people can give their comments and review online so we can understand more about this business.

The company is going to give 2 cents final dividend for this financial year! In total the dividend for FY2018 is 2.5 cents and it is a 5% dividend yield at current share price. Since the company is still trading at a discount to its NAV with low PE, higher dividend will contribute to my cashflow and I will have chance to add more in the future. 

Looking forward to attend its AGM in January.

Cheers.  

Transaction Update

My laptop finally broke down after 3 years.. I believe that I didn't take good care of it and I just got a new laptop.. Wallet is crying.. Hopefully can earn back soon. I lost all my files in my old laptop... just spent an hour to redo my portfolio performance record.

I sold my entire holdings of Tai Sin Electric few days ago at a price of 0.355, day after they released their disappointing results. I reaslied that it is kind of hopeless (at least for short to mid time frame period), their failed to pass the cost of its inputs to its suppliers, as the management said the competition is fierce in the industry. I first bought Tai Sin at 0.395 in February 2017 and sold it at 0.460 in March 2017. Good profit in a short time period so I gained this unrealistic confident and "fall in love" with this counter. I guess it is the positive results that happened in the past gave me positive impression of this counter, so I gave it nearly 1.5 years chances after I bought it back at 0.440 in May 2017, even though the company was showing the inability to pass the cost to its customers. Based on the face value I made a 20% loss for this trade, but it was offset by the quick profit I made last year, and the dividend I collected. So at the end of day I made small profit after two years. It is a 4+% return in two years so around 2+% in each year... Guess better than the risk free interest (but worse than cpf interest return). I noted that STI was at around 3100 in Feb 2017 so technically my return of this investment is also better than our dear STI's performance. This is another positive result that supports my theory of buying high dividend yield stocks. I also used the dividend to invest in other counters which generated more dividends, but hard to do the calculation so forget about it. d:

There was another stock I bought last time caught my interest again - Asian Pay TV Trust. I even made an estimation on investingnote(which it hit my target price!). I bought this counter in Jan 2017 at 0.415 and sold in the end of Feb 2017 at 0.445, and yes it was another quick profit I made during that period (I also earned a good return from Design Studio, which used to be my favourite stock but now it is in deep trouble I guess). I made a 9+% ROI in two months, but I forgot whether I received any dividend from this counter or not. This counter used to give crazy dividend, and that was the main reason of investing into it. However, I realised that it is paying unsustainable dividend, so I quickly dispose my entire holdings. I am lucky that nothing happened which I was holding this counter, and I shall make sure that I take a deeper look into any company before I make my investment decision, and it is critical. The counter is now trading at 0.167, and if I didn't sell my shares and hold it until today I will make 59% loss (excluding the dividend received, I am lazy to trace its dividend record for two years so please forgive me). Anyway I really appreciate the tracking features of investingnote, it made my life so much easier!

Investment is not easy and it is a sophisticated art. Time is your best friend and worst enemy. 

Hopefully 2019 will be a better year. 

Cheers.

When HSI jump more than 1000 pts

Today, HSI jump more than 1000 pts or 4+% in a single day, after Trump and Xi's phone call last night. 

STI up1.6% at the time of writing, which is weaker than HSI. It is expected, as HSI was underperformed than STI for the past 6 months.

I believe many people missed the boat today. I can feel my fear of missing the boat as well. However, I keep telling myself that do not panic and do not make any decision without careful evaluation.

On the bright side, I did some dollar averaging in the past few months. I bought Rivera and ND Paper. Today, ND Paper up 12.75% (but I made small money due to the relatively small position size compare to my whole portfolio). 

I still got 30% of my portfolio in cash, which I planned to carry out dollar averaging plan systematically. I bought some China Construction Bank (HK) today. When I was submitting the trade, I can hear a voice telling me that I should buy more if not I will miss the boat, and this is a great opportunity to earn big money. However, I told myself that I should proceed with my strategy systematically, and do not spend too much on any single trade. 

Even though most of the HSI stocks went crazy today, if look carefully most of them are still way below the price in January (except my dear BOC Aviation, which up more than 40% from the beginning of the year, and I got no chance to buy it back lol). Currently, cny is still at a relatively cheap price against usd or sgd, so if cny continue to appreciate as this morning, I believe many companies will benefit from if they import raw materials from other countries. Therefore, I will add more Lee & Man Paper next week. 

In conclusion, do not ever be panic when the market goes crazy. Follow your plan, invest or trade in your own pattern. Be systematic and be yourself. Have a clear mind before executing any plan, if not better turn off your computer and go for kopi break. I would like to see the outcome of next US election as well as the planned meeting of Trump and Xi. 

Hope we all huat together! Thanks for reading.