The eve before Vesak Day was not peaceful at all. Well, I was expecting some kind of flat or slight negative market as it so often happens before a long weekend. However, today was kind of "bloody" in the sense that there was a sea of red in the stock market...
I was mindful of a possible correction due to the "up up and away" stock market the past few weeks. Therefore, I had taken profit on a few occasions, like selling off my Global Premium Hotel and Marco Polo after their results release recently. Therefore, I had a small war chest ready for deployment when needed.
I bought some lots of Sabana REIT today when it dipped >5% from yesterday's closing price. The price was hovering at about 1.25 - 1.285. Yield at this price range was > 7%, which still rank one of the highest amongst the REITS and a decent number at that.
I feel that Sabana's performance has been good the past few quarters. Even though there is an overhanging cloud regarding some of the master leases expiring this year, talks are underway to renew these leases. Should that happen, the stock price is very likely to increase further from the 20+ % it has increased the past year.
With this potential upside, the above yield % and REITs being a defensive stock in mind, I took the chance to get a few more lots today. I also took profit on Lum Chang, thereby filling up my war chest again ready for another deployment if so required.
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Thursday 23 May 2013
Wednesday 22 May 2013
Analyst Report on Food Empire - 21 May 2013
Share price of Food Empire increased from S$0.685 to S$0.725 today, a rise of almost 6 % in a day. Volume is high too, at about 10 x higher volume than average. Naturally, I was happy since I feel that the stock has good prospects and I am vested.
I tried to search online to see if there are any news, and came across an analyst coverage in the NextInsight that came out today. Coincidentally, I wrote about Food Empire a few days ago.
Link here: The NextInsight
Excerpt of the report below:
OSK-DMG maintains 'BUY" with 84 cents target for Food Empire.
Food Empire reported an 11% growth in 1Q13 earnings of USD5.6m. Results are in-line with expectations, accounting for 25% of our full year estimates.
Sales in Russia grew at a stronger pace of 18% y-o-y vs our forecast of 15% due to a change in business model.
...
Sales for the quarter were also boosted by a raising of average selling prices (ASPs) for products last year. We also note an expansion in gross margins by 5ppt for the quarter.
We maintain our estimates and BUY call with TP of SGD0.84, pegged to 16x FY13F P/E.
Food Empire trades at a sharply lower valuation than Super Group (PE ratio of 13.9 for Food Empire vs 32 for Super Group).
If you are reading this, you may also be interested in this:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Sunday 19 May 2013
Food Empire Holdings - 11.3% rise in net profit to $7mil in Q1-FY2013
Having bought and sold Food Empire a few times since October 2012 when it was still S$0.45, to take profit (amidst uncertainty in the global economy), I have again taken a position on Food Empire in April this year. After its XD date, it was trading at about 0.655-0.67 range. As of last Friday 17 May 2013, it was trading at S$0.685.
Since my last post in January 2013, prices of commodities such as sugar, crude palm oil (where it is used to make non-dairy creamer of 3-in-1 beverages) and coffee, are in a downward trend or are depressed. Being a direct user of these commodities to make the 3-in-1 beverages, this surely means good news for Food Empire since raw material costs are lower.
Furthermore, group revenue grew by 13.5% from last year due to strong revenue growth in Russia, Eastern Europe and Central Asia (Russia and Eastern Europe being their largest market).
This is definitely one stock that I will continue to keep in my portfolio.
If you are reading this, you may be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Since my last post in January 2013, prices of commodities such as sugar, crude palm oil (where it is used to make non-dairy creamer of 3-in-1 beverages) and coffee, are in a downward trend or are depressed. Being a direct user of these commodities to make the 3-in-1 beverages, this surely means good news for Food Empire since raw material costs are lower.
 |
| Sugar Prices (source: http://www.indexmundi.com/) |
 |
| Crude palm oil prices (Source: palmoilhq.com) |
 |
| Coffee prices (source: nasdaq.com) |
Furthermore, group revenue grew by 13.5% from last year due to strong revenue growth in Russia, Eastern Europe and Central Asia (Russia and Eastern Europe being their largest market).
This is definitely one stock that I will continue to keep in my portfolio.
If you are reading this, you may be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
My holdings - as of 19 May 2013
Here's a snap shot of my current portfolio. My portfolio is rather REIT heavy, with almost 50% of my holdings in REITs.
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
| No. | Name | Purchase Date | Purchase Px | Current Px | Gain/Loss |
| 1 | MCT | Apr 27, 2011 | 0.890 | 1.465 | 64.61% |
| 2 | Biosensors | Mar 16, 2012 | 1.450 | 1.215 | -16.21% |
| 3 | Sabana REIT | Jul 26, 2012 | 1.000 | 1.355 | 35.50% |
| 4 | 2nd Chance | Nov 22, 2012 | 0.417 | 0.435 | 4.27% |
| 5 | MGCCT | Mar 7, 2013 | 0.93 | 1.13 | 21.51% |
| 6 | Lum Chang | Tue, Mar 26, 13 | 0.34 | 0.350 | 2.94% |
| 7 | Food Empire | Tue, Apr 9, 13 | 0.68 | 0.685 | 0.74% |
| 8 | Saizen | Tue, Apr 23, 13 | 0.198 | 0.190 | -4.15% |
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Analyst report on Saizen REIT
While doing research on Saizen REIT, I came across the following company research report by nra capital which was published on 15 May 2013 (post 3Q 2013 results release).
The link to the report is here:- NRA Capital
In summary,
If you are reading this, you may also be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
The link to the report is here:- NRA Capital
In summary,
- NAV of the REIT has depreciated to S$0.25 from S$0.27 due to depreciation in yen (Note: this is still higher than its current price of S$0.19).
- Japanese economy is showing signs of a pick-up (Note: as I have mentioned in my previous post, the Japan PM is taking bold and concrete steps (i.e. not just talk only) to improve the country's economy.)
- Management is committed to re-gear to expand portfolio (Note: as shown by the increases in DPU over the past years.)
- Forward looking yield of 6.4% (FY14F) and 6.5% (FY15F).
- Fair value deemed as S$0.20 and rated long term BUY.
An earlier report posted in The Edge Singapore may be found here:- The Edge Singapore on Saizen REIT posted on 22 April 2013
If you are reading this, you may also be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Monday 13 May 2013
Bought more Saizen REIT today after its 3Q2013 results release
Saizen REIT must be the one of the least favored REITS listed on SGX. And it is hard to blame anyone for not favoring this REIT, given its rather turbulent history:-
There were some sell down activities these few days following its 3Q2013 results. Seems like there was a 70.5% decline in quarterly net income from operations - which was largely due to one off expenses as a result of early termination of loans and refinancing activities. Furthermore, due to recent depreciation in yen, there is worry that DPU will be affected.
Well, for me, I think that based on past performance, Saizen has taken positive steps to get itself out of the woods. And this shows a lot for the tenacity of the management. The fact that income distribution has resumed in 2010 and shows an increasing trend over the years gives me confidence that the REIT is in good hands.
Even though there was a decline in quarterly income for 3Q2013, this is due to a one off payment for refinancing of loans. The more favorable refinanced loan terms at lower interests means that benefits will be felt in later quarters. Furthermore, the REIT is now given more time to repay its loan, and in the meantime, is able to secure more loans to fund its future acquisitions.
As for the depreciation in yen affecting DPU, this is something that probably comes off as a tradeoff to reviving the Japanese economy. From my impressions, the current Japan PM and his cabinet are taking big steps to shake Japan out of its decades of recession slumber. With a better economy comes a more vibrant real estate market in Japan, as more people work or invest in Japan, resulting in increase in demand for houses, and hopefully that means prices of Saizen assets appreciate in time. I'm sure this formed some of the considerations by investors when they participated in the recent Croesus Retail IPO.
Therefore, it was based on the above analysis that, instead of selling off my Saizen REIT when prices went down to S$0.189 on bad news, I loaded more on Saizen REIT today.
If you are reading this, you may also be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
- Listed in Nov 2007 @ IPO price of $1 (discount to its NAV of $1.05)
- Seems like the REIT has trouble servicing its loans (which are all commercial mortgage backed securities (CMBS) loans (read What is a CMBS loan and More on CMBS financing), and the market for such loans have more or less died during financial crisis in 2008) + Japan recession = no income distribution to unit holders in 2009-2010. And Saizen is allowed to do that, reason being it is not mandated by Singapore law to pay out dividends as all of its properties are in Japan.
- To add salt to this, there was the March 2011 massive earthquake. It has 22 of its 146 properties in Sendai, the hardest hit area.
- Things for this REIT started to take a turn in end 2012, after it made a series of attempts to repay its loan and made some good property buys.
- Current price is at $0.20 vs its NAV of $0.2716.
- Yield is about 5.1 % based on current price. Income distribution for this REIT resumed in 2H2010. It has been in an increasing trend since, as shown below:-
There were some sell down activities these few days following its 3Q2013 results. Seems like there was a 70.5% decline in quarterly net income from operations - which was largely due to one off expenses as a result of early termination of loans and refinancing activities. Furthermore, due to recent depreciation in yen, there is worry that DPU will be affected.
Well, for me, I think that based on past performance, Saizen has taken positive steps to get itself out of the woods. And this shows a lot for the tenacity of the management. The fact that income distribution has resumed in 2010 and shows an increasing trend over the years gives me confidence that the REIT is in good hands.
Even though there was a decline in quarterly income for 3Q2013, this is due to a one off payment for refinancing of loans. The more favorable refinanced loan terms at lower interests means that benefits will be felt in later quarters. Furthermore, the REIT is now given more time to repay its loan, and in the meantime, is able to secure more loans to fund its future acquisitions.
As for the depreciation in yen affecting DPU, this is something that probably comes off as a tradeoff to reviving the Japanese economy. From my impressions, the current Japan PM and his cabinet are taking big steps to shake Japan out of its decades of recession slumber. With a better economy comes a more vibrant real estate market in Japan, as more people work or invest in Japan, resulting in increase in demand for houses, and hopefully that means prices of Saizen assets appreciate in time. I'm sure this formed some of the considerations by investors when they participated in the recent Croesus Retail IPO.
Therefore, it was based on the above analysis that, instead of selling off my Saizen REIT when prices went down to S$0.189 on bad news, I loaded more on Saizen REIT today.
If you are reading this, you may also be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Sunday 12 May 2013
Lum Chang won a BCA award on May 16, 2013
Excerpt from Straits Times
Loud noises are usually unavoidable during construction projects and often disturb residents living in the area. However, some construction firms have come up with innovative ways to manage the level of noise pollution and they will receive the Green and Gracious Builder Awards on May 16.
The awards from the Building and Construction Authority recognise builders who have made an effort to address environmental and public concerns arising from construction works.
...
Lum Chang Building Contractors, another award winner, customised inflatable noise barriers to reduce the noise generated from construction works.
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Lum Chang won the case on April 24, 2013...
While doing research on Lum Chang, I came across the following piece of information on Singapore Law Watch listed 24 April 2013. Apparently, Lum Chang was involved in a law suit. Based on my understanding, Lum Chang (1st Defendant) won the case.
Case details and judgement here:- Singapore Law Watch
Excerpt from the judgement -
Ryobi-Kiso (S) Pte Ltd v Lum Chang Building Contractors Pte Ltd and another
[2013] SGHC 86
The case before me concerned an application by way of originating summons for an injunction against a call on a performance bond under a construction contract. After the hearing on 1 October 2012, I dismissed the application with the usual consequential costs orders. As the plaintiff applicant has appealed against my decision, I set out the grounds for my decision.
......
Having regard to the overall tenor and context of the entire conduct of the parties, I am unable to conclude that the 1 st Defendant’s conduct was “so lacking in bona fides” (see BS Mount Sophia at [45]). I therefore dismissed the Plaintiff’s application with costs.
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Case details and judgement here:- Singapore Law Watch
Excerpt from the judgement -
Ryobi-Kiso (S) Pte Ltd v Lum Chang Building Contractors Pte Ltd and another
[2013] SGHC 86
The case before me concerned an application by way of originating summons for an injunction against a call on a performance bond under a construction contract. After the hearing on 1 October 2012, I dismissed the application with the usual consequential costs orders. As the plaintiff applicant has appealed against my decision, I set out the grounds for my decision.
......
Having regard to the overall tenor and context of the entire conduct of the parties, I am unable to conclude that the 1 st Defendant’s conduct was “so lacking in bona fides” (see BS Mount Sophia at [45]). I therefore dismissed the Plaintiff’s application with costs.
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Book review - The Intelligent Investor by Benjamin Graham (Part I)
I started my stock investing journey on April 2011, and one of the first books I read on the topic is "The Intelligent Investor" by Benjamin Graham. At that time, I felt the need to learn from the best and Warren Buffett being an obvious choice, I read up on his investing philosophy (value investing) and got to know about Benjamin Graham.
After two years into my investing journey, I decided to re-read the book. And I find that I have a greater appreciation of the book after having real life, hands on experience in studying companies, choosing stocks, and buying/selling. Nothing beats trading with your hard earned $.
"The Intelligent Investor" is a classic investment book and I am sure that many people will agree with me that it is a must read for people who are intending to or who are already into stocks as an investment medium.
I have re-read about a quarter of the book and so far I have highlighted the following five points for sharing:-
1. To invest successfully over a lifetime does not require a high IQ, unusual business insights or inside information - what is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. By developing your discipline and courage, you can refuse to let other people's mood swings govern your financial destiny. It means being patient, disciplined and eager to learn, you must also be able to harness your emotions and think for yourself.
- Agree. Emotions are a no-no in investment. You must develop your own investment philosophy which is unique and tailored according to your risk appetite, your commitments and your temperament.
2. A stock is not just a ticker symbol - it is an ownership interest in an actual business, with an underlying value that does not depend on its share price. The market swings between unsustainable optimism (making stocks too expensive) and unjustified pessimism (making stocks too cheap). An intelligent investor is one who sells to optimists and buys from pessimists.
- Agree. Always look for value or bargains in businesses, while considering the broad economic climate, before buying a stock. You must be happy to be part of the business, and do not mind holding on to it (in case market trends downwards).
3. Future value of every investment is a function of its present price - higher the price, lower the returns. Benjamin Graham emphasizes on Margin of Safety - never overpaying, no matter how exciting an investment seems to be. This is because the chance of being wrong is always there (never know how Mr. Market behaves the next minute).
- Somewhat agree. It's a cross between buying at a bargain and riding the wave. I do agree on the margin of safety - it is important to avoid overpaying for a stock, as I know from my early stock buys in 2011 (such as ECS, Keppel Land, NOL...). Always know what you are buying.
4. The intelligent investor realizes that stocks become more risky as their prices rise, and less risky as their prices fall. He dreads a bulls market which makes stocks more costly to buy, and welcomes a bear market since it puts stocks back on sale. Even though investors know they are supposed to buy low and sell high, in practice they often end up getting it backwards.
- Agree. The best moment to buy is when market starts to turn around. Prices of stocks look high now.
5. The art of successful investment lies first in the choice of those industries that are most likely to grow in the future and then in identifying the most promising companies in these industries. The search for a stock to buy is not worth the investor's efforts unless he could hope to add 5% before tax to the average annual return from the stock portion of his portfolio. It is important to measure your investing success by how much you keep after inflation and not just by what you make.
- In theory yes, but difficult to put into practice. I need to work on the 5% increase to portfolio stocks, and not spend too much time on those 1-2% ones.
You can read the reviews from others and/or get the book from Amazon here:-
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
After two years into my investing journey, I decided to re-read the book. And I find that I have a greater appreciation of the book after having real life, hands on experience in studying companies, choosing stocks, and buying/selling. Nothing beats trading with your hard earned $.
"The Intelligent Investor" is a classic investment book and I am sure that many people will agree with me that it is a must read for people who are intending to or who are already into stocks as an investment medium.
I have re-read about a quarter of the book and so far I have highlighted the following five points for sharing:-
1. To invest successfully over a lifetime does not require a high IQ, unusual business insights or inside information - what is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. By developing your discipline and courage, you can refuse to let other people's mood swings govern your financial destiny. It means being patient, disciplined and eager to learn, you must also be able to harness your emotions and think for yourself.
- Agree. Emotions are a no-no in investment. You must develop your own investment philosophy which is unique and tailored according to your risk appetite, your commitments and your temperament.
2. A stock is not just a ticker symbol - it is an ownership interest in an actual business, with an underlying value that does not depend on its share price. The market swings between unsustainable optimism (making stocks too expensive) and unjustified pessimism (making stocks too cheap). An intelligent investor is one who sells to optimists and buys from pessimists.
- Agree. Always look for value or bargains in businesses, while considering the broad economic climate, before buying a stock. You must be happy to be part of the business, and do not mind holding on to it (in case market trends downwards).
3. Future value of every investment is a function of its present price - higher the price, lower the returns. Benjamin Graham emphasizes on Margin of Safety - never overpaying, no matter how exciting an investment seems to be. This is because the chance of being wrong is always there (never know how Mr. Market behaves the next minute).
- Somewhat agree. It's a cross between buying at a bargain and riding the wave. I do agree on the margin of safety - it is important to avoid overpaying for a stock, as I know from my early stock buys in 2011 (such as ECS, Keppel Land, NOL...). Always know what you are buying.
4. The intelligent investor realizes that stocks become more risky as their prices rise, and less risky as their prices fall. He dreads a bulls market which makes stocks more costly to buy, and welcomes a bear market since it puts stocks back on sale. Even though investors know they are supposed to buy low and sell high, in practice they often end up getting it backwards.
- Agree. The best moment to buy is when market starts to turn around. Prices of stocks look high now.
5. The art of successful investment lies first in the choice of those industries that are most likely to grow in the future and then in identifying the most promising companies in these industries. The search for a stock to buy is not worth the investor's efforts unless he could hope to add 5% before tax to the average annual return from the stock portion of his portfolio. It is important to measure your investing success by how much you keep after inflation and not just by what you make.
- In theory yes, but difficult to put into practice. I need to work on the 5% increase to portfolio stocks, and not spend too much time on those 1-2% ones.
You can read the reviews from others and/or get the book from Amazon here:-
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Monday 6 May 2013
Sold my Global Premium Hotels, for Croesus Retail Trust IPO
The stock market has been in a nice run the last few months. I made use of the chance to take profit on some of my stocks. Notably, I have sold my Global Premium Hotel, as its last quarter results were not very good + no dividend + high gearing ratio (increased borrowing costs). Price movement was hovering about 0.255-0.26. Hence, instead of tying up my funds in the counter, I decided to take profit, and divest my $ into another counter - Croesus Retail Trust.
Croesus Retail Trust IPO is now open for subscription, and will be closed on 8 May 2013 at noon. Results of the balloting will be known on 9 May 2013, and the stock will be listed on 10 May 2013. Basically, I am attracted to this IPO because of its potentially high dividend yield (8% for 2014), and the 100% occupancy rates for the 4 shopping malls in its portfolio + long term leases of > 10 years. I also believe that the current PM and government are taking concrete steps to lift the Japanese economy i.e. the worst should be over, and things can only improve from now onwards. Even though there is risk that the yen will continue to depreciate (in order to boost JP economy by making it more competitive), thereby affecting DPU, on the flip side, an improving JP economy means that people have more money, and therefore increased spending power.
Even though it is a business trust i.e. not mandated by law to provide dividends, I think that in the first few quarters at least, there management will provide attractive dividends at least for maintaining or even boosting its share price. At this low bank interest rate and high inflation times, investment in business trusts with promise of dividends, a high one at that, does not sound bad at all.
Now, the problem is just, how many lots I can get.
Update 12 May 2013: Wow, I didn't expect demand for the IPO to be so hot. I bid for 12 lots, and got nil. SIGH!
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Croesus Retail Trust IPO is now open for subscription, and will be closed on 8 May 2013 at noon. Results of the balloting will be known on 9 May 2013, and the stock will be listed on 10 May 2013. Basically, I am attracted to this IPO because of its potentially high dividend yield (8% for 2014), and the 100% occupancy rates for the 4 shopping malls in its portfolio + long term leases of > 10 years. I also believe that the current PM and government are taking concrete steps to lift the Japanese economy i.e. the worst should be over, and things can only improve from now onwards. Even though there is risk that the yen will continue to depreciate (in order to boost JP economy by making it more competitive), thereby affecting DPU, on the flip side, an improving JP economy means that people have more money, and therefore increased spending power.
Even though it is a business trust i.e. not mandated by law to provide dividends, I think that in the first few quarters at least, there management will provide attractive dividends at least for maintaining or even boosting its share price. At this low bank interest rate and high inflation times, investment in business trusts with promise of dividends, a high one at that, does not sound bad at all.
Now, the problem is just, how many lots I can get.
Update 12 May 2013: Wow, I didn't expect demand for the IPO to be so hot. I bid for 12 lots, and got nil. SIGH!
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
Wednesday 1 May 2013
Lum Chang coverage in The Edge on 29 April 2013
Excerpts from coverage in The Edge on 29 April 2013:-
(source: The Edge Singapore)
Family-controlled Lum Chang Holdings does not attract much attention in the market. Yet, the decades-old contractor is an interesting play on Singapore’s property and infrastructure boom. And, its dividend of two cents per share provides investors with a steady dividend yield of about 6%. Its market value of just $123.8 million is currently a 28% discount to its book value of $173.2 million. The company also has a liquid balance sheet, with a net cash position of $33 million as at end-2012.
If you are reading this, you may also be interested in:-
Disclaimer: The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.
(source: The Edge Singapore)
Family-controlled Lum Chang Holdings does not attract much attention in the market. Yet, the decades-old contractor is an interesting play on Singapore’s property and infrastructure boom. And, its dividend of two cents per share provides investors with a steady dividend yield of about 6%. Its market value of just $123.8 million is currently a 28% discount to its book value of $173.2 million. The company also has a liquid balance sheet, with a net cash position of $33 million as at end-2012.
Much like other contractors, Lum Chang has taken stakes in property development projects. For instance, it has a 30% stake in Twin Fountains, an executive condominium (EC) development in Woodlands. The remaining stake is held by Frasers Centrepoint. The project was sold out swiftly earlier this month. The company also has a 20% stake in another joint venture with Frasers Centrepoint to develop Esparina Residences, an EC located in Sengkang that is due to receive its temporary occupation permit (TOP) at end-2013.
..... Lum Chang’s construction order book stood at about $600 million as at Dec 31. Its ongoing property development-related construction work comprises six projects. Two of these projects are for Ascendas: Nucleos in Biopolis Road and a business park development in Science Park Drive. Lum Chang is also building The Metropolis for Ho Bee Investment at Biopolis, Ripple Bay Condominium forMCL Land in Pasir Ris, and Esparina Residences.
..... Lum Chang’s construction order book stood at about $600 million as at Dec 31. Its ongoing property development-related construction work comprises six projects. Two of these projects are for Ascendas: Nucleos in Biopolis Road and a business park development in Science Park Drive. Lum Chang is also building The Metropolis for Ho Bee Investment at Biopolis, Ripple Bay Condominium forMCL Land in Pasir Ris, and Esparina Residences.
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Lum Chang also has a foothold in Malaysia, where it develops property.
... In February, it said it had bought property located at 42-60 Kensington High Street, London for £40.19 million ($76.8 million). “Our income will be mainly from the ground floor, achieving rental income from shops such as Zara, Topshop and Miss Sixty. The leases there are very long, 10-year leases and these will provide a good steady income,” Fong says.
The yield of the London property works out to 4.5%, giving an annual income of $3.4 million, according to a report by UOB Kay Hian. That is about 15% of the company’s earnings for FY2012.
... In February, it said it had bought property located at 42-60 Kensington High Street, London for £40.19 million ($76.8 million). “Our income will be mainly from the ground floor, achieving rental income from shops such as Zara, Topshop and Miss Sixty. The leases there are very long, 10-year leases and these will provide a good steady income,” Fong says.
The yield of the London property works out to 4.5%, giving an annual income of $3.4 million, according to a report by UOB Kay Hian. That is about 15% of the company’s earnings for FY2012.
Lum Chang has paid a dividend of two cents per share for the last three financial years ...
Lum Chang does not have much of a following among analysts, though. However, UOB Kay Hian notes that the stock appears to be inexpensive. “Trading at 0.8 times price to book looks reasonable when compared with peers’ average of one time,” the brokerage states in a report. “Since FY2010, Lum Chang has maintained a net cash position. Its stock price is underpinned by cash reserves of $77 million as at Dec 31, which accounts for 62% of its market cap.”
Amid the hunt for yield, Lum Chang seems a good alternative to real estate investment trusts and consumer-oriented stocks that have run up sharply over the last couple of years.
Lum Chang does not have much of a following among analysts, though. However, UOB Kay Hian notes that the stock appears to be inexpensive. “Trading at 0.8 times price to book looks reasonable when compared with peers’ average of one time,” the brokerage states in a report. “Since FY2010, Lum Chang has maintained a net cash position. Its stock price is underpinned by cash reserves of $77 million as at Dec 31, which accounts for 62% of its market cap.”
Amid the hunt for yield, Lum Chang seems a good alternative to real estate investment trusts and consumer-oriented stocks that have run up sharply over the last couple of years.
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