Value Investment on Singapore Stock Exchange

Cash over valuation - Adventure of the magical deal

noreply@blogger.com (FC Lim) — Wed, 19 Mar 2008 16:52:00 +0000

The following story is protected material under the copyright act. All rights reserved. No part of the material may be re-produced in any form by any means without the written permission of the author – me lar (fclim). In case you are wondering, figures and names are quoted are fictitious...

Cash over valuation
- Adventure of the magical deal

1. Deciding to sell
My name is Frank and I am in my mid-30s. Like most typical locals, I stay in a HDB flat, which has an outstanding loan that would require me to work and pay off the loan for almost the next 30 years.
The fact that I need the job for the next 30 years has always been on my mind, especially having gone through some recent uncertainties, like the dot.com burst, 9-11 incident and the SARS outbreak…
Nevertheless, in early 2005, the economy seemed better and several of my ‘richer” associates started talks of investing in the local property. I am the least interested, because investing in another property (especially a private one) is beyond my means. Furthermore, I do not want to “have-to” work for another 30 years!
Then, the opportunity came, in the form of lots of flyers in my letterbox. Wow! Units in my humble hdb area is going for more than half a million. It is crazy…
The only sane decision is to sell my unit as well, there is no other better time, for me to get out of the “have-to-work-for-the-next-30-years” trap….

2. Doing the “homework”
Now, the flyers looks fantastic, too good to be true. But is it the real situation? Being a skeptical cynic, I had to check the story direct from the source – HDB. The HDB website (http://www.hdb.gov.sg/) does maintain an e-service to check out recent resale transactions, including the transacted prices. To my pleasant surprise, prices > $500,000 is real and soon the papers starting running sensational stories of breaking the record and pushing the price higher and higher.

How about the current expectations? It is still valid and sane? I started to look out for Saturday papers, where there are tons of advertisement, sometimes stating the (absurd!) expectations.

Another source where I gathered from the HDB website was the Nation Property website (http://www.nationproperty.sg/).

From the above sources, I know where I stay now. It looks like my dream of getting out the “trap” may be possible afterall…

3. Agent or maybe not?
Soon, I started sharing with my family and close friends that I’m keen to “get rid” unit. Almost everybody have reference that can “help” me! How nice… Before I know it, I was convinced by one of the “nice” friend’s friend to sign an exclusive contract, to “market” my unit. After all, the “friend” would be my best partner and “defend” my desired selling price. Nothing less and all other agents’ enquires will be “managed” by my “new found best friend”.
By the way, the exclusive contract was 3 months and it’s a “standard” term as printed on the contract.
Time passes quickly and seems like my unit is not that great after all, its on the 5th floor and not really boast a ‘fantastic panoramic view”.
In the 3 months, there were less than 5 viewings and only 1 offer, of $15k above valuation.
Maybe my dream is just a dream afterall…

4. Marketing on my own
As soon as the contract ended, I decided to take things into my own hand. Being the miser as always, I decided to find as many “free” advertisement as possible! Ha! The following “free” channels were discovered:
• ST701 (http://property.st701.com/)
• Mocca (http://www.mocca.com/)
• Nation property http://www.nationproperty.sg/
The free advertisement proved to be very much useful. Just on the 2nd day, I got a call from an agent. Sounding very professional and enthusiastic, we arranged for a viewing immediately!
The professional agent came, saw and offered me a deal on the spot – the exclusive contract again. Being “fresh from the pain”, I politely declined.
Subsequently, several other agents called. My observation is that it seems like the trainer for the agents are all the same. They all want me to sign the exclusive contract and all for the same reasons!
At the end of 3rd agent, I already made up my mind – no exclusive contract. My standard response to all agents was: “Bring the potential buyer to view, if the deal is closed, you get 1% comms. No need to view, if you do not have ready buyer. Thank you!”

5. Welcome to view my place
Without any exclusive agent, I find myself dealing with lots more phone calls. Also, I realize that some “buyers” are really “agents-in-disguise”! I now also have to sieve the ‘real’ buyers from the ‘fake’ buyers.
Nevertheless, marketing my unit became a hobby that I enjoyed as time goes by. I get to see a lot more tricks, for e.g. nobody really knows how the property market is doing. The agent will tell the buyer – “It is a seller’s market, you can’t be too picky!”. At the same time, the exact same agent will tell the seller – “Lots of enquires but little transactions, it’s still the buyer’s market”.
As time goes by, I realized that there are only 3 agents that brought “real” potential buyers to my unit. I gave them priority information and would try to adjust to their timings whenever it is possible.
However, there was an interesting agent that was not on the list of the 3 short listed agents…

6. Signs of interests
This agent was very nice and polite on the phone. However, the first viewing arranged was tricky; it had to be during office hours. Fortunately, it just happened that somebody was home on the viewing date.
So, came the agent, with the potential buyer. The potential buyer came alone and I was told he was “head-over-heels” with my unit. However, he needed to consult his spouse and son. I was skeptical, probably another one of those tricks.
Then, there was the second viewing. On a particular Thursday afternoon, I received a call from the agent, asking for an “urgent” viewing. Unfortunately, I had to attend to a “free” seminar and could not be at home. Nevertheless, I arranged someone to be home and they came, they saw and they left.
On both occasions, I did not see the agent, nor the buyer.
Finally, the 3rd call came, and the 3rd viewing was arranged on a Sunday. For the first time, I saw the agent and the buyer with the wife and the son. Well, they do look like decent people and I supposed the wife is picky just to be sure the unit is what they want.

7. Sold! Done deal!
Not wanting to appear desperate, I left the agent and the buyer alone for 3 days. Finally, I called up the agent. She said they are keen, but its too expensive. My reply was that if they are really keen, it will just get more expensive in the near future! Furthermore, if they stay out for a long time (e.g. 30 years), the average cost is just a little more…
After several phone calls and haggling (which I am very poor at), the deal was done! It was a $15k discount from what I asked for. Well, its definitely much better than the $15k above valuation that was first offered. The deal was closed at $65K above the valuation.
I can “feel” my dream coming true now…

8. Next, the replacement place
Once the option paper was signed, I launched part 2 of the project, to look for a replacement place.
To my shock, the asking price of the specific area we are keen, have gone through roof. Very run-down units with no shopping malls nearby were asking $80k to $100k above valuation.
I did not bow to the price, just like I did not accept the $15k above valuation.
We re-org and decided to go further away from the City. It’s just a couple more train stations away…
We went to areas where the asking prices were more reasonable, in the range of $30k - $50k above valuation.
We must have combed through the whole town! There were just simply too little choices with our constraints:
• Corner unit
• Walking distance to train station
• Lift landing
• More than 5th storey (in case we wanna sell again…)
• No afternoon sun facing
• Little renovation required
At some point in time, I was quite convinced we are just not being realistic…

9. No more viewing please, putting down the option fee
It is sometimes fate or destiny... After viewing at least 8 – 10 units, we decided to actually go back to the very first one that we visited.
It seems like we have been using the very first unit for all the benchmarking. And well, it seems only the first unit holds up, all the others does not seemed to match it…
Not much negotiation was done (something which I regretted later), as it was within our budget and well, we are just too tired to ask for more…

10. Dream realized!
With all the paperwork done, we have finally gotten out of the trap. But wait, I just realized that it seemed we are not totally out…
My financial planner called me up and told me that I’m not saving enough for my retirement. That is, if retirement, is possible at all…

Well, on second thoughts, retiring totally may not be a fantastic idea. I just came across an article that states there are “proof” that once people retire, they actually die sooner, rather than later…

Oh well, retirement would be another story altogether….

========= THE END ========

Copyright of Lim Fu Chin. All Rights reserved.

Asiatic Group Holdings - Half Year Financial Statement

noreply@blogger.com (FC Lim) — Sat, 17 Nov 2007 08:17:00 +0000

Asiatic Group Holdings - Half Year Financial Statement

Outstanding piece of work! :)

http://tinyurl.com/2vk43t

(link opens another window to SGX website on the statement)

My thoughts:

1. Its a growth story... I think it is just the beginning... and I hope the management will be watchful about the corresponding increase in expenses...

2. Interesting operating cashflow... The next financial statement for 2H-08 would see whether it is sustainable...

3. Its asset is another interesting find... almost 50% of its assets (~ $33.8 mil) is fixed property / equipment. Another 25% of it (~ $16.9 mil) came from long term finance, rights and bond issues... hope it does'nt need this type of funding in future, always better to use its own cash for expansion... just my opinion...

For details of past postings on Asiatic, please see http://tinyurl.com/28ngzd

Have fun investing...

Warm regards,
fc
http://valueinvestmentonsgx.blogspot.com

Disclaimer: Completeness, accuracy and opinions based on information and comments mentioned via this website cannot be guaranteed. Investors should always conduct their own research before making investment decisions.

noreply@blogger.com (FC Lim) — Sun, 12 Aug 2007 15:26:00 +0000

SGX Announcements of Asiatic

One more bookmark for you (link to SGX website):

Asiatic - http://tinyurl.com/2mvvmq

Asiatic - What a 2.8 bagger! And I missed it out totally!

noreply@blogger.com (FC Lim) — Sat, 07 Jul 2007 14:16:00 +0000

Dear all,

Another investment learning... wished I had more patient... enjoy reading...

Earlier this year (Jan-07), I had expressed my keenest interest and promoted this 'fellow'... For details of past postings, see http://tinyurl.com/28ngzd

After this fellow went up by about 20% in the following month (Feb-07), I actually dumped it for what I thought was another 'better' play...

Needless to say, the 'better' play does not turn out that 'better' afterall...

In the meanwhile, this good fellow continued to do great things for its shareholders... besides delivering what it promised to do in its new area of business (power generation), it continues to enhance its bread and butter business (fire protection) in a slow and steady manner...

In Mar-07, it announced plans to issue more rights and I thought about it negatively then. On hindsight, I could not understand why I was negative about it... another learning...

Anyway, here is the calculation, had I sticked with it since Jan-07 (which you already knew I did'nt)... =)

Jan-07 : Bought 30 lots @ ave price $0.21 = $6,300
Mar-07 : 30 lots would entitled to 75 lots @ $1,050 (rights + warrants)
Aug-07 : If I had not sold out, the total lots = 105, ave cost price per share = $0.08 (i.e. [7350+1050] / 105 lots).

At the current price of $0.23, it is 2.8 bagger!

As always, I am still learning....

If I could quote from a book:
"Fool me once, shame on you! Fool me twice, shame on ME!"

Have fun investing...

Warm regards,
fc
http://valueinvestmentonsgx.blogspot.com
http://tinyurl.com/28ngzd

SGX Announcements of Chuan Hup, First REIT, SPC, SingPost, SingRe

noreply@blogger.com (FC Lim) — Sun, 01 Jul 2007 11:03:00 +0000

SGX Announcements of Chuan Hup, First REIT, SPC, SingPost, SingRe

A list of bookmarks for you (links to SGX website):

Fun Quiz: Am I a Stock Market Junkie (yet)?

noreply@blogger.com (FC Lim) — Mon, 18 Jun 2007 15:59:00 +0000

The following is an informal and fun quiz. Please do not take it as a serious guide / advice. So, just relax and have fun 'playing'...

Instruction:

Read through the following questionaire and note down the number of Yes / True as you go down the list. The scoring table is at the end of this questionaire.

I check the stock market & share prices every 5 minutes or less. Anything less, I become physchologically unsecured.
One of my webpage is permanently fixed on either ChannelNewsAsia Finance, Philips Stock Brokerage, Kim Eng Stock Brokerage, Yahoo!Finance, CNBC Finance, MSN Finance and / or any other website that has news relating to the stock market.
I do not know what is the underlying business for the stock and anyway, I think it does not matter!
I know all that is to know about SGX rules for shorting the stock market.
I bought the stock with the intention to sell for a quick buck. Hey, almost everybody is doing it, isnt it?
Everyday evening and / or morning, I 'researched' the shares to 'play' in the newspapers, including StraitsTimes, Business Times, myPaper, etc.
Hey, I'm investing, not gambling! It is different, just that I have a short investing horizon, i.e. intra-day and / or intra-week, that's all!
I take leave to stay at home to trade shares. It is a relaxing hobby. And furthermore, I might make some monies!
Sometimes, I dream about a particular stock and it really run up the next day(s)! I am starting to suspect I have some kind of psychic abilities in the Stock Market!
I started borrowing money so that I can continue to be in this game. Hey, it is just cash flow. I would payback, plus interest soon!

Scoring Table

How many Yes / True do you have? See the score table below:

1 - 3 : Mildly addicted, please see recommendation 1 below.
4 - 7 : Seriously addicted, please see recommendation 2 below.
8 - 10 : Extremely addicted, please see recommendation 2 below.

Recommendation 1
Please take time to consult a professional for further assessment. Some local organization that may offer help are:

Care Corner Counselling: 1800-6-668-668
Thye Hua Kwan Moral Society: 1800-X-Gamble (1800-9-426253)
Institute of Mental Health, Community Addictions Management Programme (CAMP): 6389-2387 / 6389-2389 / http://www.camp.org.sg/

Recommendation 2
Please seriously consider recommendation 1.

Information sources

FAQ About Problem Gambling - http://www.ncpg.org.sg/faq.html
He Never Saw The Sun - day traders who became addicted to buying and selling stock - http://findarticles.com/p/articles/mi_m1318/is_8_55/ai_76577532/pg_1

Disclaimer: The author of this article is NOT trained in any formal physchology or stock market courses, not even the most fundamental type of courses. So, read and take the actions at your own risks.

Top 10 things to do when the market is not going according to your direction!

noreply@blogger.com (FC Lim) — Sun, 10 Jun 2007 15:41:00 +0000

Top 10 things to do when the market is not going according to your direction!

10. Cry out loud (1-3 times maximum) and hit myself on the chest (for 10 times maximum) for being such a fool to listen to rumours.

9. Start to make plans to recover from the mess, i.e. start making the list of who to call to borrow $$$. If need to, visit Credit Counselling Singapore at http://www.ccs.org.sg/

8. Promise myself never to bet on the stock market again. Repeat this step again for as many times as I like (no maximum).

7. Go and catch a movie that has nothing to do with the stock market, possible candidates are Shrek and Pirates of the Caribbean.

6. Go for a jog in McRitchie reservoir - take in some fresh air.

5. Take the MRT train - look around and appreciate that I am already much more fortunate than many people around me.

4. Tell myself it is not the end of the world, it is just a small test that I can handle. After the ordeal, I will be a much better person and live on to tell the tales many years after.

3. Take stock of my skills, knowledge and experience - i.e. how can I help solve problem and get paid for it!

2. Go get a honest job and start earning my worth. Look into JobStreet - http://www.jobstreet.com.sg, JobsDB - http://www.jobsdb.com and ST701 - http://www.st701.com.sg

1. Draw strength from family - they still need and want me to be around, no matter how much trouble I'm in.

Bonus:
* - Re-look at the list above and arrange the items in an order that will help me!

Warm regards,
Fu Chin

SGX Companies with Profit Margin More Than 35%

noreply@blogger.com (FC Lim) — Wed, 06 Jun 2007 15:57:00 +0000

SGX Companies with Profit Margin More Than 35%

This is an initial list of of companies that seems 'interesting' to review. :) Of course the usual disclaimer applies... And of course, the data may not reflect the latest companies announced results.

Have fun reviewing the list...

Warm regards,
Fu Chin
http://valueinvestmentonsgx.blogspot.com

S/No	Company name	Market Cap ($mln)	Operating Profit Margin (%)
1	HONGKONG LAND HLDGS LTD	USD 10833.344	399.8
2	UNITED INDUSTRIAL CORP LTD	SGD 4297.738	167
3	FORTUNE REAL ESTATE INVESTMENT	HKD 4965.448	162.5
4	GENTING INTERNATIONAL PLC	SGD 5141.991	143.6
5	CHINA MILK PRODUCTS GROUP LTD	SGD 878.220	85.5
6	SILVERLAKE AXIS LTD	SGD 924.825	67.1
7	GOLDEN AGRI RESOURCE	SGD 6224.112	66.9
8	SINGAPORE EXCHANGE	SGD 9030.000	58.2
9	ASCENDAS REAL ESTATE INV TRUST	SGD 3588.370	58.1
10	SPORE LAND LTD	SGD 4326.000	56.4
11	OVERSEA-CHINESE BANK CORP LTD	SGD 29701.370	54.5
12	EZRA HOLDINGS LIMITED	SGD 1606.600	54.4
13	DBS GROUP HOLDINGS LTD	SGD 37848.000	54
14	MACQUARIE MEAG PRIME REIT	SGD 1166.594	51.6
15	CAPITAMALL TRUST	SGD 6655.057	51.3
16	SUNTEC REAL ESTATE INV TRUST	SGD 3157.990	46.2
17	CAPITACOMMERCIALTRUST	SGD 4174.818	45.2
18	SPOREPRESS HOLDINGS LTD	SGD 6964.200	43.4
19	HOTEL PLAZA LTD	SGD 808.000	43.2
20	UNITED OVERSEAS BANK LTD	SGD 35797.080	41.8
21	JAYA HOLDINGS LTD	SGD 1170.400	41.4
22	PINE AGRITECH LIMITED	SGD 9120.000	40.4
23	HONG LEONG FINANCE LIMITED	SGD 1744.680	39.9
24	RAFFLES EDUCATION CORP LTD	SGD 1610.820	38.7
25	UOB-KAY HIAN HOLDINGS LTD	SGD 1217.513	37.8
26	SINGAPORE POST LIMITED	SGD 2622	36.7

Disclaimer: Completeness, accuracy and opinions based on information and comments mentioned via this website cannot be guaranteed. Investors should always conduct their own research before making investment decisions.

Report on SingPost

noreply@blogger.com (FC Lim) — Sun, 29 Apr 2007 15:30:00 +0000

Report on SingPost

Compiled on 29-Apr-2007 and I am vested in this company.

About the company:

SingPost is Singapore’s leading provider of domestic and international postal services in Singapore. It offer one-stop logistics business solutions and through our extensive retail distribution network in Singapore, a comprehensive range of postal, agency and financial services.

1. Risks and counter actions

(a) Since the domestic postal delivery market has been liberalized on Mar-07, there has not been a credible competitor "appearing" for the domestic mail delivery. I highly suspect that the setup costs and the potential benefits of a duopoly may not be that attractive afterall. Nevertheless, the organization is continuing to enhance its mail processing capabilities to make it ever more efficient.

(b) In this E-era, I wonder if it's business value be sidelined for the next generations. In my opinion, its direct and indirect competitors include email, video conference, VoIP, wireless hotspots and e-payment for bills. Of course, the list goes on. It seems scary at first. Upon further reading of its annual report, it somehow seems to be re-making itself to be relevant. It began to offer direct mails and more importantly collaborated with international publishers (think Harry Potter) and eCommerence merchants (someone got to deliver the physical goods, ya?).

(c) Price - This is fairly subjective. 52 week range is 0.975 - 1.22. 5 years range is 0.63 - 1.27. The 200 days moving average is 1.098. With my purchase price at $1.17, it would cost about $2.24bil to purchase the whole business. For that price, the revenue (05/06) is $0.41 bil, with net profit (05/06) at $0.12bil - about 5.3%. Of course, that is 5.3% profit and an on-going business that may or may not become more profitable...

(d) Lack of established niches - Over last few years, it tried to explore and gain more lines of profit generators. So far, its efforts in finance & insurance distribution seems to be paying off. Going forward, it must keep on exploring what to offer to its customers... if it keep on doing the right stuff, I think it will learn to skillset to do it... but it is too early to tell now.

2. Ongoing Quality of Business

(a) It is a simple business - mail, retail, logistics. Not really that tough to understand from the annual report. Nothing fanciful...

(b) It still has got its monopoly (in domestic mail delivery) so far, until a new-comer appears, which may or may not happen. With the temporary monopoly, it has got pricing power that it has not yet fully exploit.

(d) Earning power - For the last 5 years, the results has been good. On the average, profit margin is 28.48%, ROIC is 19.9%, ROE is 31.86%. For the past 5 years it has been profitable and dividends had been duly paid to shareholders. The EPS growth over 5 years is 3.9%, net assets growth is 1.6%. The 05/06 EPS is $0.0646. The business has been generating great positive cash flow over last 5 years and it should not run into cashflow problem at time soon.

3. Management

(a) The board directors and senior management are suspected to be of highly competent people. Combined, the team has got directorship experience from various industries such as tele-communications, banking, fast moving consumer goods, invesment and there is even a MP amongst the team.

(b) Having such a good team may also means that huge salaries are required to retain their services. Based on 05/06 report, there is 1 personnel earning between 500k - 750k, 6 personnel earning between 250k - 500k and 9 personnel earning below 250k. Combined, it is less than 5% of the net profit, fairly reasonable in my opinion.

Why I bought the shares:

1. It is fairly simple to understand its businesses.

2. I expect the business to be 'safely' profitable for the next 10 - 20 years.

3. There might be a potential upside of more than its historical gains of 5%, if the current management developed skills of creating more profit generators, with its ready reach of customer base.

4. The management seems like a competent and honest lot - so far.

5. I highly suspect it will continue to pay dividends as long as it cant find a good way of allocation surplus capital, which is both good and bad. Good as in the management is honest to be giving back the surplus, rather than wasting it on non-profit generating projects. Bad, as in it will attract tax...

6. At the price I purchase ($1.17), its risk-returns is acceptable to me. This means that I prepared to accept the associated risks (of the business and / or profits going bad) for the projected return of 5%, with an on-going business which may or may not become more profitable.

Information sources

Company website at http://www.singpost.com/
Evaluation concepts adopted from Poor Charlie's Almanack

Will my $30K grow into a $1mil gold pot? Episode 2

noreply@blogger.com (FC Lim) — Wed, 18 Apr 2007 15:42:00 +0000

Will my $30K grow into a $1mil gold pot? Episode 2

Apologies for "missing-in-action" for a long while... hey 27 days in this instant-gratification, can't-wait-a-second, e-Era is like ages? Hmmm... back to the topic on hand...

=== Part 1 ===

First things first, if you have not read the first episode, you may like to do so before proceeding. Otherwise, some of the stuff may not really make sense... :)

Remember about the winning combinations of $33.8k, 12% compounded, 30 years = $1+ mil??

Well, with my limited financial intelligence (what do you expect? I'm a comp sci grad!), I could not find a financial instrument that could have that kind of consistency returns, at least over the last 10 years.... okay, I admit, I probably did not search hard enough...

The only one stock that I could verify to be possible is BRK shares, which is not that tough to figure out... Just read Mr Buffett's most recent letter to shareholders....

=== Part 2 ===

A couple of weeks ago, a good friend of mine, let's call her Mrs A, asked me for my opinions about unit trust investment... Okay, I am bias, in fact, my brain is "telling" me that Mrs G is lazy and leaving the difficult job to the fund manager, who may or may not be better at picking stock than any Tom, Dick or Harry...

However, being a nice guy, I explained to Mrs A, that I usually do not "do" unit trusts as my perception is that its returns is not really that fantastic over long periods of time (say 10 years or more)... and plucking from the air, I blabbered something like its going to be 6-8%....

However, I did promised her to look at what's in the market and see if there are exceptions... Glad that I did, sometimes it pays to be a nice guy?! :)

=== Part 3 ===

Over last couple of nights, I diligently poured over the websites and finally found 1 'independent' website (www.fundsingapore.com) which is run by an independent financial organization in Singapore...

From the website I could virtually perform a "data mining" of the performance of the unit trusts... it was a great exercise.... the only problem was I had to collate the information on the performance of the fund over the last 10 years and "annulized" back its returns... well, with a little *rusty* skills in Excel, I managed to get it up... and guess what, WOW!!!

=== Part 4 ===

If the information I gathered and my improvised formulae is correct, there are actually 5 funds which returned 11.81% to 12.79% over the last 10 years! Impressive! Not many stocks can boast about such returns over the last 10 years!

Hey wait!! This seems to fit into my winning combinations of $33.8k, 12% compounded, 30 years = $1+ mil?!?!

Okay, before I reveal these 5 funds, I must admit, there are critical flaws in the above "mini" research:

I am assuming the past performance will be repeated in the future, by the fund managers. This is a risk, as we all know, the fund managers may be changed by the management, anytime.
The past 10 years performance may have been influenced / skewed by the fact that these economies experienced fast-paced growth over the last 10 years, which may not hold true in the next 30 years.
With my limited experience & finance knowledge, a lump sum investment into Unit Trusts does not seem to be logical as there would be not any dollar-cost-averaging effect.
The data I gathered from the above website expressed return on investment as "...Bid-Bid, including the reinvestment of income...". It may mean that the initial sales charges has been ignored???!!!

So, forget about my "winning" combinations... it probably will not work for Unit Trusts... Anyway, in the current climate, where I'm quite bullish about the US economy over the next 12-24 months, I'm just not ready to put so much money (hey $30k is a lot to me!) into any product...

=== Part 5 ===

Okay the final listing... I hope you do not yawn at the funds.... enjoy the list! :)

First State Regional India, 12.79% annualized returns over last 10 years.
AXA Life-Fortress Fund B, 12.77% annualized returns over last 10 year
Schroder Singapore Trust A, 12.69% annualized returns over last 10 years.
Lion Capital Singapore Trust, 12.08% annualized returns over last 10 years.
DBS Shenton Thrift, 11.81% annualized returns over last 10 years.

Oh ya, if you are wondering, I did share the above list and more with Mrs A. In fact, the full list consists of a total of 33 funds, with returns from 6.78% till 12.79% annualized returns... I do hope she benefited from the mini-research... and before I sign off, the usual disclaimer applies...

Happy investing!

Warm regards,
Fu Chin

Will my $33.8K grow into a $1mil gold pot?

noreply@blogger.com (FC Lim) — Thu, 22 Mar 2007 14:31:00 +0000

Will my $30K grow into a $1mil gold pot?

=== Part 1 ===

Last Friday, on the my MRT trip back home, I overheard an interesting conversation between 2 guys. One of the guy is in the early 30s? (lets call him Yuppie) and the other in late 50s? (Owen) . It went something like this:

Owen: You must buy a house lar! My mother recently sold her house for more than $125k! When she bought in the 60s, it was only $6k!

Yuppie: But now housing so expensive! That generation is over liao....

=== Part 2 ===

Wow! I thought to myself from $6k to $125k! As soon as Mr. Yuppie and Mr. John alighted, I whipped out my trusty scientific calculator and start punching in... [125] [/] [6] [=] [x^y] [(] [1] [/] [42] [)] [=] and guess what is the answer... 1.07497661853...

=== Part 3 ===

Hmmm...buying the property is great!... the compounded interest rate is 7.5 percent, the only problem is I do not have so much cash to put it down to purchase an investment-grade property now... of course unless I take a loan which is out of the question.... I don't like to be in debt...

I started to play with my trusty calculator, after a few tweaks, I *think* got this winning combination... with initial investment of $33.8k, at 12 percent compounded rate, in 30 years, the sum would be a tidy $1,0126,453. YEAH!!!

=== Part 4 ===

The only thing for me to do now, is to save my 33.8k, find an investment that will likely give compounded return at 12 percent consistently for the next 30 years... then I would have my pot of gold.... hmmm..... sounds quite mission impossible.... if you have any candidates in mind, do leave me a comment....

Warm regards,
Fu Chin

Chuan Hup - latest development

noreply@blogger.com (FC Lim) — Tue, 13 Mar 2007 15:50:00 +0000

Chuan Hup - latest development

Dear friends,

As you might already know, I participate quite actively in wallstraits.com forum. The following is an extract of my posting about the latest development on Chuan Hup....

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Originally posted by Old Friend

Hi Limfuchin san,
Understand from your previous post or your website that Chuan Hup is still undervalued at 34cts. Now, with a takeover offer at 34cts on the table (see attached link), what is your views on Chuan Hup now?
http://info.sgx.com/webcorannc.nsf/ef3ba6cb188613ea482571b2003641d3/4586df8c7ffe78654825729c003a293d?OpenDocument
Thanks in advance! :)
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Dear Old Friend,

Thanks for the note.I was wondering why it halted trading, could be good news or bad news, right?

Then began my adventure....

Firstly, what I did was to do a rojak analysis comparing to its competitors (I used Courage Marine, Samudera Shipping and Singapore Shipping). It is really at face value, as in I look at only the competitors' P/E and book value.

The conclusion is quite sad... I find its comparative fair value to be only $0.21. Not wanting to give up, I dig up on the "Available-for-sale investment", which looks like a 'suspect' of hidden value. In its 2006 report, it is stated as US$218.151 mil.

When I dig further, oh my god, I do not remember that it has so many associated and subsidary companies! Directly held by the company is already 23 of them (I suspect some are just dormant companies) ! So, I zoomed in to those that I can find more and found these 3... PCI(32.69%), CH Offshore(32.12%) and Scomi Marine(28.92%).

To cut the story short, the combined net asset value of the 3 companies above is already US$214.42! Ya, so what right?

So, assuming that most of its *non-dormant* associated and subsidary companies are profitable, I highly suspect that its statement of US$218.151 is now very much undervalued.

The next question is, it is understated by how much? Due to lack of experience and knowledge, I am unable to give an accurate estimate... However, a simple simulation show that, for every US$100mil of understatement of its investment, its per share net asset value will go up by US$0.09. Also, all the 3 companies listed above are making monies...

My final opinion is that it should be worth more that $0.34... its most recent declared net asset value is US$0.2692 (about SG$0.4038)....

So, what do you guys think leh?
*yawn*

Warm regards,
Fu Chin

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How to Cope with Financial Anxiety

noreply@blogger.com (FC Lim) — Thu, 08 Mar 2007 04:40:00 +0000

How to Cope with Financial Anxiety

Dear friends,

Tips for dealing with stock-market stress

http://tinyurl.com/39p7mm

Useful article that calm my nerves....

Hope it help you...

Regards,
Fu Chin

A reference for you - My current portfolio

noreply@blogger.com (FC Lim) — Wed, 07 Mar 2007 15:42:00 +0000

A reference for you - My current portfolio

Dear friends,

For your kind reference, you might wannna take a peep at my current portfolio as of 07-Mar-07...

Allocation

Cash & money market: 63%
Shares: 37%

Singapore Stocks

ChuanHup purchased at $0.33, speculative - expecting growth & dividend.
First REIT purchased at $0.77, speculative - expecting dividend.
QAF W091116 purchased at $0.18, speculative - expecting growth in QAF, 2 years ago.
SPC $4.16 Speculative - expecting dividend.

US Stocks

BERKSHIRE HATHAWAYB purchased at $3,510.00, defensive, based on past record.
GLAXOSMITHKLINE PLC purchased at $54.96, speculative - expecting growth.
PROGRESSIVE CORP purchased at $23.66, speculative - expecting growth.

As always, this is not a call to buy and /or sell anything at all! :)

3 Reasons why I am still a novice investor

noreply@blogger.com (FC Lim) — Fri, 02 Mar 2007 09:45:00 +0000

3 Reasons why I am still a novice investor

Dear friends,

This is the list of reason why I am still a novice investor.

Also, as you read down the list, you will discover why you should take a *huge* pinch of salt from my previous reports. If you already done so, I am gald that I am less guilty of the crime of misleading you.

3 Reasons why you should take a *huge* pinch of salt from my previous report:

1. I did not understand the business, in terms of:

(a) The nature of the business and how the company generate its profits
(b) Whether the company had a good history (at least 5 years) of generating profits and
(c) Whether the company had a sustainable competitive advantage (by earning power / monopoly / etc)

2. I only looked at the latest year's financials. This is really unacceptable now that I know a little more about value investing. At least 5 years of history should be studied!

3. I did not research enough and I did not know the management personally. It is most important toinvest only with honest management with high integrity.

Warm regards,
Fu Chin

Link to an interesting website - Ask Dr Money

noreply@blogger.com (FC Lim) — Mon, 26 Feb 2007 12:42:00 +0000

Link to an interesting website - Ask Dr Money

http://www.askdrmoney.com/

This is a wonderful website which I stumbled sometime back. It is very pro-consumers. Hope you find it useful! :)

Warm regards,

Fu Chin

Increasing my cash position

noreply@blogger.com (FC Lim) — Tue, 20 Feb 2007 14:52:00 +0000

Increasing my cash position

Dear friends,

I just like to let you know that I am increasing my cash position and my target is to have about 85% cash. So, as and when possible, I will be selling out the stocks, including those on my watchlist.

The reason for the target is to gear myself up, to be cash rich when good opportunities arises. Over the last 2 weeks, I have not been able to convince myself of any good company at attractive prices, both in the US and SGX market. Having said that, I will start buying again, when there are good companies at attractive prices.

If you are curious, I am "parking" my cash in a local insurance company's money market fund. Hopefully, the interest earned will at least beat the inflation and not cause my hard-earned monies to shrink... do email me, if you wanna to find out more...

As always, this is not a call for you to do anything at all. :)

Have fun investing...

Warm regards,

Fu Chin

Asiatic Group - hoped that you have gained from it...

noreply@blogger.com (FC Lim) — Fri, 09 Feb 2007 11:52:00 +0000

Asiatic Group - hoped that you have gained from it...

On 21-Jan-07 (Sunday Times), I speculated that 3 stocks will go up by 25%. I am not quite convinced myself then. :) Well, if you had went along with the speculation, you would be 25% richer...

Are you asking... what? Will it go up somemore? I dunno! I suspect so... Till what? Hey, I am just a novice, with only 2 years of investing experience! Further, this is just my passion and not my full time job! :)

Anyway, during my research in early-Jan 07, its trading price was around $0.19. At the end of today's trading it is about $0.24, thus an increase of about 26.3%.

All related postings about this company can be found here: http://tinyurl.com/28ngzd

My Watchlist on 05-Feb-07

noreply@blogger.com (FC Lim) — Mon, 05 Feb 2007 16:26:00 +0000

My Watchlist on 05-Feb-07

Dear friends,

As the market rallies to new heights, I am getting more worried about the next correction.

However, as I have been prudent (hopefully) with my purchases, I do hope to keep invested for the long term. However, the temptation to take profits is high...

Do share your comments / thoughts... :)

A consolidated watchlist, for your reading pleasure:

S/No	Company Name	Evaluation Date	NAV	Price Bought	Close Price	Gain / (Loss)	Report Links
1	Asiatic	05-Jan-07	$0.25	$0.197	$0.205	4.06%	Click here
2	SMRT*	19-Jan-07	$0.398	$1.14	$1.51	32.45%	Click here
3	SPC	09-Jan-07	$2.95	$4.14	$4.46	7.72%	Click here
4	Straits Trading	28-Dec-06	$3.62	$3.50	$3.84	9.71%	Click here
5	F&N	14-Jan-07	$3.07	$5.35	$5.40	NA	Click here
6	HTL	28-Jan-07	$0.54	$1.02	$1.00	NA	Click here
6	Chuan Hup	31-Jan-07	$0.471	$0.33	$0.325	(1.52%)	Click here

*SMRT - NAV as per latest results released, the detailed report to be updated soon. This stock was purchased before I started this blog. Hence, I would not have purchase it, if based on my evaluations. Hence, the performance so far is not based on the theory that I am practising since I start this blog...

Poh Tiong Choon Valuation Report

noreply@blogger.com (FC Lim) — Fri, 02 Feb 2007 05:00:00 +0000

Poh Tiong Choon Valuation Report

Evaluated on 01-Feb-2007 and I am currently not invested in this company.

About the company:

Core Business: The principal activities of the Company consist of the provision of services relating to land transportation, warehousing,stevedoring, container services, hiring out of equipment, leasing and general contracting
Date of Listing: Apr -1999
What I like about this company: The company's management are also substantial shareholders (i.e. their fortunes also tied to company performance). Management is very experienced in its industry, since 1950s. Transportation industry - I like its predictability... market up or down still need transportation. The only risk here is that I do not know how much does the transportation component contribute to PTC revenue and profit.
What I do not like about this company: Seems to be lacking of independent / external directors. Only 24% of the assets is in Cash and A/R. Majority of the rest (63.53%) is classified as Plant, Property & Equipment. Revenue increased by 14%, but profit decreased by 53% because of higher diesel and interests costs and setting up of newly formed subsidaries.
Competitive advantage (if any): Logistical know-how in its industry? I am really not sure if this make sense. Let me know your comments...

Valuation Statistics (base on 1H06 financial report)

Earning Per Share: $0.0072 (annualized)
Price/Earnings ratio : 25.30 (annualized)
Operating Profit: 3.13%
Return on Equity Ratio: 2.34%
Current Ratio: 1.52
Cash & Receivables per share: $0.089
Debt/Total Equity Ratio: 1.04
Net Tangible Assets: $0.1792

Conclusion

Price: $0.20 (02-Feb-07, PM)
Est Fair Value: $0.2152 (highly subjective)
Maximum Price I would purchase at: $0.15 (highly subjective)
Price to Est Fair Value: 92.93%
Final word: Not very appetizing to me... and just me only. Differing views are very much welcomed...

Information sources

Link to 1H06 report on SGX (pdf file): http://tinyurl.com/3bnhn3

noreply@blogger.com (FC Lim) — Wed, 31 Jan 2007 17:00:00 +0000

Value Investment on Singapore Stock Exchange - Valuation Report of Chuan Hup

Evaluated on 31-Jan-2007 and I am currently invested in this company.

Note: Exchange rate assumption: 1 USD = 1.5 SGD

About the company:

Core Business: It was founded in 1970 as a tug and barge service provider for the PSA. On 30 September 2005, it completed the sale of its marine businesses to Scomi Marine Bhd. It is now a a pure investment holding company with substantial interests in the marine, electronic manufacturing services and property sectors.
Date of Listing: Dec-1983
What I like about this company: It has got very diversed investments, across marine, services and properties sectors. In my opinion, with the risks spreaded out, it is very unlikely that its investments will all turn sour at once. Also, I like the chairman (non-exec). Furthermore, one of the exec directors (previous MD) is also a substantial shareholder. Its profits and net tangible assets has been increasing steadily last 4 years, before it decided to sell away its marine operations.
What I do not like about this company: It is in its initial years as a full investment holding company. Thus, there is no historical performance to benchmark it against.
Competitive advantage (if any): None at the moment, this is risky bet... I am betting it to be a great instutitional investor.

Valuation Statistics (base on 1Q07 financial report)

Earning Per Share: S$0.018 (annualized, converted from USD)
Price/Earnings ratio : 18.06 (annualized, excl subsidary dividends, not calculated in 1Q)
Operating Profit: 52.27% (excluding other income)
Return on Equity Ratio: 0.0039
Current Ratio: 3.97
Cash & Receivables per share: S$0.12 (converted from USD)
Debt/Total Equity Ratio: 0.08
Net Tangible Assets: S$0.381 (converted from USD)

Conclusion

Price: $0.33 (31-Jan-07)
Estimated Fair Price: $0.471 (highly subjective)
Maximum Price I would purchase at: $0.377 (highly subjective)
Price to Estimated Fair Price: 70%
Final word: To me, this seems to be another great business to own.

Information sources

Chuan Hup company website at http://www.chuanhup.com.sg/
Share investment magazine, issue 296, 01/01/07 - 12/01/07

Value Investment on Singapore Stock Exchange - My Watchlist on 29-Jan-07

noreply@blogger.com (FC Lim) — Mon, 29 Jan 2007 15:41:00 +0000

Value Investment on Singapore Stock Exchange - My Watchlist on 29-Jan-07

Dear friends,

A consolidated watchlist, for your reading pleasure:

S/No	Company Name	Valuation Date	NAV	Close Price	Max Price	Invested?	Report Links
1	Asiatic	05-Jan-07	$0.25	$0.21	$0.28	Yes	Click here
2	SMRT	19-Jan-07	$0.38	$1.45	$0.62	Yes	Click here
3	SPC	09-Jan-07	$2.95	$4.42	$4.71	Yes	Click here
4	Straits Trading	28-Dec-06	$3.62	$3.80	$4.37	Yes	Click here
5	F&N	14-Jan-07	$3.07	$5.35	$3.76	No	Click here
6	HTL	28-Jan-07	$0.54	$1.02	$0.95	No	Click here

Value Investment on Singapore Stock Exchange - Valuation Report of HTL International

noreply@blogger.com (FC Lim) — Sun, 28 Jan 2007 10:34:00 +0000

Value Investment on Singapore Stock Exchange - Valuation Report of HTL International

Evaluated on 28-Jan-2007 and I am currently not invested in this company.

About the company:

Core Business: Manufacturer of leather sofas and leather upholstery hides since 1976, with facilities in China, Malaysia and Singapore.
Date of Listing: 1993
What I like about this company: Its Revenue, Profit and EPS has been increasing steadily over the last 5 years. Its customers are mainly from overseas, with Europe and North America accounting for more than 70% of sales. The management are also the substantial shareholders. The management focus on the development of its 'skills and capabilities' (know-how) of its business.
What I do not like about this company: Inventories form about 54.8% of its current assets and I am not sure if it is the norm in the industry.
Competitive advantage (if any): Global footprint, serving it as a natural barrier to entry of its business?

Valuation Statistics (base on 3Q06 financial report)

Earning Per Share: $0.129 (annualized)
Price/Earnings ratio : 7.83 (annualized)
Operating Profit: 10.17%
Return on Equity Ratio: 18.00
Current Ratio: 2.62
Cash & Receivables per share: $0.27
Debt/Total Equity Ratio: 0.684
Net Tangible Assets: $0.537

Conclusion

Price: $1.01 (26-Jan-07)
Intrinsic Value: $1.18 (highly subjective)
Maximum Price I would purchase at: $0.95 (highly subjective)
Current Price to Max price I would buy at: 106%
Final word: This seems to be a great business to own. I would like keep it in my watchlist. At 106% of Price to IV, it would be slightly expensive for me to consider any purchase at the moment.

Information sources

HTL company website at http://www.htlinternational.com/
Share investment magazine, issue 296, 01/01/07 - 12/01/07

Value Investment on Singapore Stock Exchange - Valuation Report of Singapore Exchange (revised)

noreply@blogger.com (FC Lim) — Thu, 25 Jan 2007 19:34:00 +0000

Value Investment on Singapore Stock Exchange - Valuation Report of Singapore Exchange (revised on 28-Jan-2007)

As correctly pointed out by 3 blog readers (thanks folks!), the original post contains several data errors. Thus this posting is revised (original values in red, revised values in blue) to reflect a more accurate valuation. After correcting the data errors, the final word and conclusion is the same as the previous stand.

Evaluated on 25-Jan-2007 and I am currently not invested in this company.

About the company:

Core Business: SGX owns and operates the only integrated securities exchange and derivatives exchange in Singapore and their related clearing houses.
Date of Listing: Nov-2000
What I like about this company: Its has monopoly over the singapore exchange! It is also diversifying its revenue sources, in terms of product types and geographical areas.
What I do not like about this company: My personal opinion is that the current market is rallying, without much fundamental reasons. Thus, I am quite worried about when the next downturn will come about.
Competitive advantage (if any): Of course! It is the only 'player' locally!

Valuation Statistics (base on 1H07 financial report)

Earning Per Share: $.021 (projected, excl once-off gains) (correct value is $0.21)
Price/Earnings ratio : 63.80 (annualized value is 32.14)
Operating Profit: 58.6%
Return on Equity Ratio: 38.9 (annualized)
Current Ratio: 0.31 (correct value should be 1.68)
Debt/Total Equity Ratio: 0.39 (correct value should be 0.78)
Net Tangible Assets: $0.452 (correct value should be $0.5425)

Conclusion

Price: $6.75 (25-Jan-07)
Intrinsic Value: $0.981 (highly subjective) (revised to $1.60)
Maximum Price I would purchase at: $0.785 (highly subjective) (revised to $1.28)
Current Price to Max price I would buy at: 688% !!! (revised to 421%)
Final word: At a 688% or 421% price to IV ratio, it must be one of the most pricey stock! I would defintely hesistate to purchase at this point in time.

Information sources

SGX company website at http://www.sgx.com/
SGX Financial Statements for the Quarter Ended 31 December 2006 at http://tinyurl.com/22s9jk (pdf file)

Next posting will be likely on 27-Jan-07

noreply@blogger.com (FC Lim) — Wed, 24 Jan 2007 11:33:00 +0000

Next posting will be likely on 27-Jan-07

Hi everybody,

Apologies for not posting this week so far.

I'm on overseas trip and have limited internet access. Thus, the next posting will most likely appear on 27-Jan-07.

Warm regards,

Fu Chin