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.

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.

Portfolio Update July 2018 (Plan Update)

Few months ago I stated in my plan that I will buy more Keong Hong and BOC Aviation. However, I got no chance to buy both of them at a good price. 

Even though HSI was quite weak for past few months, BOC Aviation didn't drop much, and at the time of writing it is still trading above 49 HKD.. much higher than my previous entry point (w/ CD). Same thing happened to Keong Hong as well, the stock stabilised at current price level, with low trading volume. Good thing is I sold CDG months ago (I think I stated it in my previous post). I am planning to slowly buy more counters.

One good news is now 1 sgd worth slightly more than 5 rmb! I always wanted to invest in china SSE and I think this is a very good chance. SSE's performance is one of the worst in Asia (correct me if I am wrong), but I think this will give me the chance to buy at lower valuation and I could buy more counters with the limited cash I have at the moment. However I noted that even though some financial reports and outlooks for some counters look amazing in China, it is not uncommon to see the leading company's share price loss more than 70% due to different reasons (fake financial report, company subsidiary gave unreasonable guarantee, fake vaccine***, etc). Therefore I believe that it is important to spread my risks to more counters, and shouldn't invest more than 5% in any single counter listed on SSE). I have attached changsheng co ltd (SZ002680) stock price chart as follows. It is one of the leading vaccination producer listed mainland china, but recently outsiders found that they produce fake vaccination, therefore it might be forced to delist itself (I am not sure how are they going to compensate the other innocent shareholders).

I have received my Minsheng (HK) bonus share and dividend today! Due to the appreciation of HKD my stock portfolio looks quite good this month. My portfolio slightly perform better than both STI and HSI! (so happy lol, must keep it up) I have attached the 2018 performance table as follows:

2018 PERFORMANCE
	VALUE		SGX	VALUE		HIS	VALUE
Dec-17	100.00		3402.92	100.00		29919.15	100.00
Jan-18	100.43		3533.99	103.85		32887.27	109.92
Feb-18	98.23		3517.94	103.38		30844.72	103.09
Mar-18	98.14		3427.97	100.74		30093.38	100.58
Apr-18	98.41		3613.93	106.20		30808.45	102.97
May-18	99.70		3428.18	100.74		30468.56	101.84
Jun-18	96.80		3268.70	96.06		28955.11	96.78
July-18	98.41		3319.85	97.56		28583.01	95.53

I have bought Goldpac Group (HK) this month. The main reason is I believe that it is severely undervalue. It got huge amount of cash and good cash flow, yet it is trading at very low valuation. The company also issue good dividend. Anyway it is just a small position to increase my yearly free cash flow. As the table below shows, I still got around 37% of cash at the moment. I got many counters in my WL and going to buy them in slowly. 

	Name	Percentage
Stock
1	ComfortDelGro	2.03%
2	Keong Hong	9.17%
3	TAI SIN	5.47%
4	STRAITS TRADING	29.53%
5	MINSHENG	6.97%
6	RIVERA	4.81%
7	Thomson Group LTD	2.11%
8	Goldpac Group LTD	2.26%
Cash
1	SGD	10.02%
2	HKD	13.36%
3	AUD	14.27%
Total		100%

In summary, I am planning to exchange some rmb first at the moment, and slowly buy in different counters. I am focusing on BOC Aviation, Minsheng Bank (HK), Keong Hong, Air China (SSE), YZJ... 

Portfolio Update June 2018

World Cup Season is here! Ouch most of the markets are swimming in BLOOD. 

Good thing is I have received more than 1k net dividend in June, so I have more bullets on hand. Around 40% of my portfolio is in cash at the moment, and I am ready to average down on my counters. 

Lucky that I have sold my CDG last time, so I managed to get back the cash before the sell down (even though it is not so significant). I also sold my BOC Aviation at 51.70 HKD, and planned to buy back at lower price. I missed the chance to buy back at 47.50 HKD few days ago.. But I believe I should be able to find another opportunity. I tried few times to buy Keong Hong at 0.52 - 0.53 SGD but failed. I strongly believe that last accident is an one-time event, which will not have any significant impact to the company performance as a whole. 

STI loss 4.65% in June, and HSI also loss 5% during the same period. Thought these are bad? SSE loss more than 8% in June! That is quite pain to most of the traders and investors.. and my portfolio finally "outperform" both SGX and HSI (even though only 60% of my portfolio is stock). In fact, I am going to receive bonus shares and dividend from Minsheng Bank (2 for 10 shares), so my portfolio should look even better.

I have attached the updated 2018 performance form and the composition of my portfolio as follows: 

2018 PERFORMANCE
	VALUE		SGX	VALUE		HSI	VALUE
Dec-17	100.00		3402.92	100.00		29919.15	100.00
Jan-18	100.43		3533.99	103.85		32887.27	109.92
Feb-18	98.23		3517.94	103.38		30844.72	103.09
Mar-18	98.14		3427.97	100.74		30093.38	100.58
Apr-18	98.41		3613.93	106.20		30808.45	102.97
May-18	99.70		3428.18	100.74		30468.56	101.84
Jun-18	96.80		3268.70	96.06		28955.11	96.78

	Name	Percentage
Stock
1	ComfortDelGro	2.06%
2	Keong Hong	9.67%
3	TAI SIN	5.42%
4	STRAITS TRADING	29.73%
5	MINSHENG	5.71%
6	RIVERA	5.08%
7	Thomson Group LTD	2.22%
Cash
1	SGD	10.08%
2	HKD	15.83%
3	AUD	14.20%
Total		100%

Anyway I still can't believe Korea won!!!

Currently working on F5, F6 and F8 for my ACCA, and I wish that I can be an auditor. But not sure if Big 4 will accept my with my ACCA cert or not...

Anyway thanks for reading! Hope everyone huat big in the rest of 2018!

Cheers.