Friday, July 31, 2009

Signs of a troubled company

Part of investment is avoiding trouble. Therefore, I decided to investigate the worst companies in Singapore Stock Exchange to find the red flags. People tend to forget about survivorship bias in the Stock Exchange. For every company listed on the exchange, there can be hundreds that was delisted, bankrupt or liquidated. Most research tend to only focus on the 'surviving' companies that remained listed, therefore bias on those better companies.

Starting with the NUS Governance & Transparency Index Scorecard, I shall slowly find more possible red flags of a troubled companies. Since the list is long and confusing, I will summaries the main signs:

  1. Auditor raising issues
  2. Directors/senior management resigining
  3. Insiders are especially selling
  4. Earnings restated

(note: the number indicates the penalties assigned by the scorecard)

Corporate Goverance:

  • -10 to -15, External auditors unable to issue an opinion or raises red flag, 
    allegations of fraud reported, unauthorized trading, etc. -15 if allegation involves directors/senior mgmt/controlling shareholder
  • -10, Directors  or  senior  management  resigning  and  raising corporate governance‐related concerns
  • -10, Retention/appointment of directors or senior management convicted
    corporate governance‐related concerns (ie, not enough info to complete duties)

  • -8, Earnings of more than one year are to be restated

  • -6, >10% of NTA involving insider trading

  • -5, Executive directors or the chief financial officer and the
    independent  directors  sit together  on  boards  of  listed companies outside the group 
  • -5 for each company, 2 or more directors (the same persons) sit together on 3 or more board
  • -5, Issues profit warning within 30 days after the IPO or after a results announcement 
  • -5, Earnings for one year are to be restated 
  • -5, Retention/appointment of directors or senior management who is charged
  • -5, Late announcement of stock option grants 
  • -5, Issue  of  share  options  to  directors and  senior executives when the share price is at or near one year lows (unless regular/scheduled)

  • -3 for each, Resignation of senior management  (CEO, executive directors and  CFO)  without  adequate  disclosure  of  information regarding  the  circumstances,  search  for  replacement and expected time frame for appointing a new person 
  • -3 for each, Other directors resigning without disclosure of reasons 
  • -3, > 1 change  of  senior  management  (CEO,  executive directors and CFO) 
  • -3, Chief Executive Officer and/or Executive Directors  are not subject to re‐election at least once every three years 
  • -3 for each company, Tenure of independent directors > 9 years.
    Too long for an independent director and shall be considered as non-independent instead for rest of the evaluation
  • -3, Number  of  directorships  concurrently  held  by  independent directors > 4
  • -3, Number  of  external  directorships  in  other  listed  companies 
    (outside  group)  concurrently  held  by  CEO  or  executive 
    directors is more than 2
  • -3 (0 if company performing poorly), Appointments  of  independent  directors  who  are  closely 
    linked to controlling shareholders 
  • -3, Retention/appointment of directors or senior management who is being investigated
  • -3, issue of share options to independent directors 
  • -3, >5% NTA involving insider tradings

  • -2, The same independent directors  sit on all the nominating, remuneration and audit committees in the company 


  1. Survivorship bias - Wikipedia, the free encyclopedia
  2. Governance & Transparency Index Scorecard

This post shall be constantly updated as I investigates the weakest companies on Singapore Stock Exchange

Thursday, July 30, 2009

Singapore Property News for 30 July 2009

CIMB: Ho Bee upgrade to $1.40

* Target price raised to S$1.40 (from S$1.16).
* Raise our FY10-11 core EPS estimates by 3-4% on slightly higher ASP assumptions for its onshore projects.
* For the same reasons, end-CY10 RNAV has been lifted by 2% to S$1.40.
* Assume S$1,800 psf for its Sentosa inventory, 30% below peak prices.
* Trading at a 21% discount to our RNAV.
* Balance sheet health set to improve significantly (even assuming write-downs)
* Land bank to participate in this physical-property rally
* Raise our target price from S$1.16 to S$1.40, based on parity to RNAV (previously 15% discount).
* Maintain Outperform.

DMG: Too soon to sell

Speculative signs present, but not excessive. National Development Minister Mah Bow Tan stated that the government is seeing speculative signs in the property market. Nonetheless, they are not excessive and it is a little too early to conclude that a property bubble is building up. In any case, the situation is being monitored closely to ensure that a property bubble does not build up. He further assured that there is plenty of supply in the pipeline and the suspended government land sales (GLS) program could be brought back if necessary. Citing the uncertain economic outlook, he urged home buyers to do their homework to ensure their properties are affordable, even if interest rates begin rising.

Investment tips:

Could a property bubble occurs? There seems to be genuine demand given the seven consecutive months of strong sales. However, are home prices realistic or affordable?

Although people will claim Singapore have limited land and growing population led to price increases, I feels it is because of speculative and investment greed. People are owning properties in wish to earn rent and sell when prices rise. Probably in the future, more of our children and student graduates can only afford to rent houses due to increasing costs of living and have no savings for the deposit. Also, with the future of jobs becoming mostly term-based and unsecured, people will be unwilling to commit buying a property.

Who will benefit the most?


  1. Ho Bee by CIMB
  2. Property sector by DMG

Five reasons not to buy a TV now

Investment tips:

  1. Timing cost:
    Just think about the last time you bought the TV and the price dips after a few months. By committing and buying now, you will have to face the pain of getting it more expensive than it is worth.

  2. Newer features:
    Like many other tech gadgets, there will always be a new and improved version every few months. For TV, there will be 3-Dimension TV, faster refresh rate, thinner design, TV with internet connectivity.

  3. Opportunity cost:
    Toshiba, Samsung, Sony, LG, Panasonic, etc. By choosing one over another, you place your bet on the wrong brand or model. The manufacturers have their own claims and features. The contrast ratio isn't a good way to compare. Furthermore, the salesman is selling the TV to you only wishes to get you one that gives him the most commission.

  4. You don't need it:
    Remember the times you have watch your older TV and the images and color look so vibrant. It still works and there isn't any much high definition content to make it worth upgrading too.

  5. You get better returns by investing the money:
    Even by putting the money into the low interest saving account, you will get better returns than buying the TV. The TV will probably be worth $10 to the karang guni in 5 to 10 years time. If you bought it at $2,000, it is a investment that produce -20% yearly.

Wednesday, July 29, 2009

Predicting the future of economy

The stock market is hard to predict, however there are some leading indicators which can try to unveil what is going to happen to the economy overall. I read up for 'leading indicators' in Wikipedia mentioning an index predicting the 8 recessions over the past 50 years. However, it also had predicted many false recessions too. It is worth reading the research paper, containing the consideration and problems.

However, that was for the US stock market only therefore I search in Singapore then. Not surprisingly, Singapore Statistics have a index with leading indicators too. There is also a paper how Singapore Statistics come up with the index and the issues. The indicators try to predict GDP in around 3 to 6 months ahead. The paper also show the evaluation of the index. It is constantly updated and showing how some indicators are used only quarterly, some are used monthly. It also talks about the cyclical nature of indicators.

Comparing their methodological and results with technical analysis by many investors, I can see the similarities why I don't like technical analysis. They will change factors to tweak their results. This can lead to over-fitting and also past performance is never a indicator of the future. However, they at least attempt to use logical indicators and reasonings to explain/lie why they they can predict the future.

Nevertheless, the current CLI(Composite Leading Index - the leading indicators), till Quarter 1, 2009, predicts that GDP is decreasing much more slowly around -1.7% compared to -6.4% the previous quarter.

Investment tips:
Anyone who claim they can predict the future is probably lying unless they manipulate the market. But, it is still worth reading what are the indicators and their cyclical nature. However, the indicators serve as a guideline to GDP and not individual stocks. At least the indicators used are more 'logical' than just stock prices and volume used by technical analysis.

Investment is about finding the inefficient of the market, so it is about taking opportunities of the mistake with these indicators or predictors. Therefore, the more efficient the indicators are the harder it is for investors to make money. An example is the bonds, treasury bills. The indicators are quite accurate and variations from results are low, therefore there isn't a value to analysis them.

  1. Index of Leading Indicators - Wikipedia, the free encyclopedia
  2. Research paper
  3. Statistics Singapore - Theme on Leading Indicators
  4. Statistics Singapore - Papers & Analyses (Economy)

Tuesday, July 28, 2009

Do you know how much cash your town council have?

I did not realise there are annual reports for each town council until I read the CNA news of resident calling for more transparency. Therefore, I search for my town council, Holland/Bukit Panjang and analyse the report.

I can't believe when I saw the amount of cash there was. There was S$58 million dollar in cash & equivalent. That is almost like a fund and I hope it is well managed. I didn't manage to see how it was invested though.

Investment tips:

Better hope your town council have the right person to manage the fund, since it is hard to question because there isn't much information what is invested and the consideration. How much cash do your town council have? Share it with others too!


Holland/Bukit Panjang Annual Report

Cambridge Industrial Trust Hold Calls

Updated analyst reports from Phillip Capital and DBS.


DBS: Building up its coffers.
• 2Q09 results showed stable performance
• Private placement exercise leads to 10% dilution
• Impact on AEI activities only in the medium term
• Downgrade to HOLD, TP S$0.41 based on DCF.


DBS: Downgrade to HOLD. DPU is expected to be diluted by 7-9% in FY09-10F to 4.8 – 4.7 Scts. Our DCF based TP will be reduced to S$0.41, which is close to its closing price. As such, we downgrade to HOLD. Cambridge REIT currently offers a FY09-10F yield of 12%.

Phillips: Our revenue forecasts have assumed a portfolio vacancy of 3%. Portfolio performance in the last two quarters was lower than our assumptions. We thus revise our vacancy assumption to 1%, still slightly conservative compared to CIT actual occupancy rate. We have also revised down the management fee following the downward revaluation of the portfolio. We raise our DPU forecast from 4.73 cents to 4.93 cents. Fair value is raised marginally from $0.44 to $0.45. In view of the recent run-up in price, we lower our rating from Buy to Hold.

Investment tips:

There should be more better REITs although I haven't study enough. As usual take a pinch of salt with analyst reports.


Phillip Capital

China XLX Fertiliser dual-listing in Hong Kong

XLX Fertiliser
China XLX is seeking dual listing in Hong Kong. Hong Kong listed competitor China Bluechemical is trading at 11x PE, 2x price to book and 3.3x price to sales relative to XLX’s 5x PE, 1.5x price to book and 1.1x price to sales, hence with the dual listing, hopefully CXLX’s valuation gap can be narrowed.


Fundamentals remain weak.
Earnings to plunge in 2Q09.
Valuation gap should be narrowed in the event of successful dual-listing.


Maintain FV, TP raised to S$0.44. Share price has run ahead on speculation of the dual-listing in HK, where discussion is still preliminary at this point. We roll over our valuation to blended FY09/10 earnings and TP is raised to S$0.44, still pegged to 9x PE. In the event of a successful dual-listing, we believe the fair value should be adjusted to S$0.53 at 11x PE, which is a 10% discount to its closet peer, China Bluechem. We advise investors to sell into strength.

Investment Tips:

Need further evaluation of peers like Bluechem. Also, from a fundamental investor point of view, it does not make sense because the business does not change.


Capitamall Trust

Capitamall Trust

Summary from reports:
) Retail sales of small-ticket items picking up
) More positive data from GSS
) Easing pressure on retailers and landlords
) 2Q09 results within expectation
) Occupancy remains high, slight positive rental reversion
) DPU in line despite S$1.5m retained
) Occupancy stable at 99.7%; reversion rates flat
) New-to-market brands in Orchard could be prospective tenants.

While we believe that the worst could be over for the retail industry, we expect the recovery in consumer spending to be gradual as consumers are likely to stay cautious in light of the uncertain economic outlook. As such, we maintain our forecast of a 10% decline in rent for FY09 and a 5% decline in rent for FY10. Our RNAV estimate remains at S$1.36 per unit. We also expect mid-year revaluation of the retail malls to remain stable. After the Rights issue, its gearing level will decline to 29.1% after the repayment of borrowings and we estimate that CMT’s asset portfolio can tolerate up to an 18% decline in valuation before it reaches the upper bound of its comfortable leverage target of 30%-35%. Our fair value of CMT remains at S$1.21 and we maintain our HOLD rating.
Management’s ability to grow rents despite the challenging conditions while maintaining a high occupancy level underlines its good track record as retail property managers. We have lifted FY09 and FY10 DPU to 8.6cts and 9.1cts on higher portfolio occupancy assumption of 99% vs an earlier 95%. The stock is currently trading at 5.5-5.8% DPU yield and offers a 12% total return. Maintain Buy with TP $1.68
Maintain Underperform and DDM-based target price of S$1.30. For the rest of 2009, we expect CMT’s portfolio occupancy to be nearly full, anchored by its well-located suburban malls. However, reversions may turn negative as improvements in retail sales still lag behind. Maintain target price S$1.30, still based on DDM valuation (discount rate 9.5%).

Positive retails sales, high occupancy but lack of catalysts. Learn some new term like rental reversion. DBS focus on the DPU and debt while CIMB talk about the turnover of the shops, traffic, etc. CIMB mentions the catalyst "New-to-market brands in Orchard could be prospective tenants." seems doubtful. What is the chance of brands like Gucci appearing at your heartland mall?


Karin Technology

Having gone through the top 100 in the GTI, I found the list isn't useful to filter stocks. It is probably only useful to single out problematic company that are in the list last few. It is because the score are very close and don't differentiate most companies apart.

A quick glance got me interested in Karin Technology since it is in the IT industry I have some knowledge on. Will probably take a look at the company.

China Printing & Dyeing Holding (M67)

Maintaining the focus on textile sector, I start by looking for the weakest company, China Printing & Dyeing to learn about the risks and problems it faced. It was hard to find information from SGX and other sites what happened to it. From Business Time, it seems to have undergo judicial management.

Fibrechem also seems to have issues in their balance sheet too. Therefore, the biggest issues seems to be corporate goverance in this sector, or rather S-chips. NUS had done a Goverance Transparency Index (GTI) that ranks company with a set of criteria. However, the list was in image file, making the search of company very hard. There is the Singapore Corporate Governance Awards which does provides a searchable list though. Perhaps, I should email them requesting a text copy of their results if possible.

Review: I will looks into corporate govt first before financial statements. It seems to be a big issue since financial statements can be cooked up.

Updates on 30th Jul 2009, added link to SGX for getting the monthly updates.
Also added the list of upcoming events at the comment section


Restructuring and no payment
News of Judicial Management
Auction by govt
SGX (look for Last 3 Month, China Printg & Dyeing)

Why dividend isn't good

From the investor point of view, getting dividend is a good thing since it is a return of your investment. However, for a company that is an expense that could have been reinvested for better returns. Furthermore, the dividend is subjected to tax and further reduce the value for the company.

However, some companies now give scrip dividend which is better. It means you can choose to reinvest the dividend and buyback more share of the company. This isn't subjected to tax and it makes more sense if you trust the company to create better returns than you with the taxed dividend.

Nevertheless, company paying dividend constantly is worth getting when you have little risk appetite but still wish to dabble in stock.

Foreland Fabrictech

Going through my filter and saw Foreland Fabrictech among the top few in ROA and EPS for their FY2008. The latest quarterly report shows no growth in income therefore the ROA must be dropping. The company manufacture functional fabric to differentiate from the highly competitive market. Also, like that Mr Tsoi Kin Chit, Executive Chairman, had 63% of remuneration from bonus, making it more performance orientated. The IPO proceed from 2007 had been mostly used, with only S$5,269 left for New Equipment and S$2,957 for wastewater, treatment, recycling plant. Segmentation of profit: ~27% tax, 22% dividend 2008 (12% 2007), 19% capex 2008 (9% 2007). Also a "General reserve fund" law requiring 10% of net profit till the company reach 50% of registered capital.

What I like
1) Simple company business model, manufacture and sell + R&D for higher margin fabric
2) Chairman bought own share during July 08, @ S$0.199

1) Govt Support:
- Increase tax rebate from 14% to 15% from Feb 2009. (very small)
2) Possible dividend payout of 20% based on prospectus, although in 2008 it only gave 5%

1) Poor liquidity
2) Slower growth of 6%
3) Small Cap (although I like this point since less chance of interference)
4) Chairman holds 60+ % of share and his decision can greatly affect stock price
5) Resignation of asst company secretary w/o explanation

Competitor in SG
Qian Feng
Li Heng
Sinotech Fibre
China Fibretech
China Sky
Hongwei Technologies Limited
C&G Industrial Holdings
China Printing & Dyeing Holding?

Monday, July 27, 2009

China Powerplus

Source: CIMB update (Requires login)

RHB demanded payment of S$1 million by end of July.

CIMB maintain at S$0.03 after 50% discount to 3.5x CY09 P/E after showing lack of catalysts and small market cap. Also, mention of inept to sustain margin despite other companies showing stabilization after falling commodities prices.

Review: Shall still keep the company till I am confident of knowing what to get next. I still love small market cap investing since there are several advantages. However, the management of small market cap are crucial because financial statements cannot be totally trusted.



Read about another blogger attending the AGM during April and raise some interesting issues. Seems to show lots of suspicious issues about management that should reveal over time.

HTL International

Reviewing furniture sector and start with the one with bigger market cap, HTL just behind Man Wah. Although the annual report is from Dec 2008, it is still worth reading about the risks and future outlook.

Issues/Risks faced:

  1. Snowstorm in China disrupting supply chain.
  2. Fire burning sofa factories.
  3. Surge in commodity price, for oil, leather hides, wages and freight rates.
  4. Forex volatility
  5. Government policies at both the national and international levels covering free trade and the avoidance of protectionism
  6. Anti-dumping duties in China by World Trade Organization till 2015. Therefore if exported at unfairly low price compared to alternative country, duties can be imposed.
  7. Raw leather hide account for 50% of upholstery cost. Cattle raw hide is dependent on consumption of beef
  8. Cyclical demand for furniture, housing starts, interest rate level, credit availability.
  9. Seasonal operation. Lower in July to Auguest (summer month)
  10. PRC VAT rebate and import duties. Currently, VAT rebates are reduced for this sector. Eg, VAT rebate for finished leather is 0%(instead of 8%)
  11. Possible mandatory duty deposit for imported raw material. Currently, exempted.
  12. Production of leather is pollutive and might require upgrade to waste treatment.

Actions taken:
  1. Relocation from Malaysia and Singapore to China to cut costs.
  2. Hedging
  3. Restructuring in past years

  1. Free Cash flow SG$5.6 million
  2. Net Gearing 21.4%
  3. EPS dipping from 13.00 to -4.86
  4. NTA dropping gradually from 49.55(2006) to 45.86(2008)
  5. ROE dipping 23.37% to -9.48%
  6. Enhance viability as critical supplier to customer, large and small, provding reliable supply chain

Europe (46% to 50.2%),
North America (9.6% to 7.5%),
Asia (13.9% to 14.9%)
Greater China (10.4 to 15.3%)

Sofa (81.2% to 62.6%)
Leather (10.7% to 14.9%)
Home Furnishing (8.1% to 22.5%)

Dividend yield:
  1. 2006 - 4.94%($0.925)
  2. 2007 - 1.63%($0.38)
  3. 2008 - 0%

Review of Operation
"This unrealised loss of S$20.4 million comprised (i) a translation loss arising from the revaluation of the Group’s trade receivables/payables/loans amounting to S$5.8 million; and (ii) a mark to market charge on forex derivative contracts totaling S$14.6 million, relating mainly to forex options entered to hedge the US Dollar, Japanese Yen, Euro and the Singapore Dollar (FY 2007, the Group recognised a translation gain of S$1.8 million and mark to market credit of S$1.1 million).
After the balance sheet date, in January 2009, approximately S$12.1 million mark to
market losses were not realised but instead will be credited as income in 2009."

Don't understand (ii) Mark to market charge ... and how it will become a income of S$12.1 million. Perhaps someone can explains that more simpler.

Sofa and leather declined from S$28.1 to S$10.5 million.
Home Furnishing improved excluding exception items. Awarded in 2008 Q2 a Berlin project to refurnish apartment(Amt not stated). Trying to secure new franchise.
Strong mention of forex loss affecting cost

Mr Phua Yong Pin, Chairman. Eldest of three Phua brothers.
Mr Phua Yong Tat, CEO.
Mr Siew Peng Yim, CFO. Cash flow management.
Mr Tay Kheng Hee, Director, Manage the hedging, etc.
Mr David Macleod, MD of Multiport Logisitics that handle freight and transportation
Mr Goh Choo Guan, Director of Sofa Manufacturing Operations,
Ms Leo Sai Tin Jane, Director of Leather Manufacturing Operations

742,187 @ 0.37 expires 2012
2,335,500 @ 0.82 expires 2014

Unsettled Trade Recv of around S$17,498,000
Top shareholders contains most of the Singapore banks.

Review: Mention of the unrealised forex loss, although it don't seems to be a key factor. Mentioned of increased cash, however it is short-term bank loans of $30,000k and other debts.

T-Tech Shrimp Farm

CNA Video @ MSN.

Growth for shrimp market in Singapore

Just saw Money Mind about Singapore registered company, T-Tech International. It supplies 1st generation shrimp fry for China. A shrimp farm yield about US$200,000, twice yearly.

Market information: China's Ministry of Agriculture expects consumption demand of shrimps on the mainland to increase by 30 per cent, and T-Tech is confident that it can meet the demand. Also, the executive director, Alex Chin claims the shrimp farm market is fragmented too.

Future: Double production every year for the next 3 to 5 years. T-Tech hopes to list on SGX by 2011.

Review: If it is so lucrative, does it really needs to get listed? There are probably good unlisted company too.

Saturday, July 25, 2009

Currency Forex

Listening to complains of the poor exchange rates from Singapore currency to Malaysia Ringgit at Bukit Panjang Plaza, I decided to calculate the profit margin of a dealer.

At Ang Mo Kio, SGD to Ringgit was 2.44/0.40 a couple of weeks ago. It means 1 SGD = 2.44 Ringgit. (Although it is now roughly 2.47 Ringgit) The profit a dealer makes is 2.44 * 0.4 = 0.976

Therefore, the dealer will probably make (1-0.976) = 0.024 for every dollar exchange back and forth. Of course, there is a holding cost and currency risks as prices fluctuate. However, I will be interested to know the rates at Bukit Panjang and whether there is a arbitrage opportunity. (although i doubt)

Fallacy of Green Ticks

Source: NEA
Source: Gain City Price List
As Singapore enforces aircons, fridges and dryers to have their power consumption measured, people will perceive that higher number of ticks implies more savings over time. However, this savings might not offset the higher price.

Especially for plasma and LCD, LCD uses less electricity over time but plasma are cheaper. The savings might not be enough to offset the huge price differences.

The true cost of electrical appliance is
Est. cost of electricity * years of usage + Price

For example, I check the prices at Gain City (although prices are usually negotiable at stores)

Comparing LG 42" TV
- S$1,999.00 PLASMA 42PQ60R
- S$3,299.00 LCD 42LG60FR

The price difference is $1,300 and there is a need to consider whether the electricity cost of the plasma will be more than $1,300 during the years of usage. Therefore, don't blindly follow the green ticks. There is a reason why Singapore isn't covered with solar panel everywhere and being environmental friendly.

Ascott REIT by OCBC & CIMB

OCBC by Meenal Kumar
CIMB by Janice Ding

More benign expectations. Our FY09F and FY10F distributable amount estimates are up 9% and 17% over previous estimates, reflecting our expectation of stabilization at current levels. Our new SOTP value for ART is S$1.14 (prev: S$0.82). This excludes our previous cash call assumption, as its current valuation impact is minimal. Market conditions have eased dramatically and we feel the risk of further stress on ART's portfolios and balance sheet has abated. Consequently, we are lowering our "uncertainty discount" to SOTP from 25% to 15%. Our new fair value estimate is S$0.97
(prev: S$0.61). Upgrade to BUY.

Downgrade to Neutral from Outperform; no change in estimates and DDM-based target price of S$0.79 (discount rate 10.3%). We maintain our forecast of a 13% decline in full-year REVPAU, in keeping with guidance. Our capex assumptions for FY09-11 are also in line with guidance. ART has risen 22% since our upgrade on 10 Jul, to exceed our target price of S$0.79. As such, we downgrade it to Neutral.

Feel that there isn't a point in reading analyst reports because valuation can change drastically, implying there is no magic formula. I admire analysts with the guts to come up with these formulas & assumptions in the unpredicatable market.

Mapletree Logistics by DBS and CIMB

Source: remisiers by DBS
Derek TAN +65 6398 7966

MunYee LOCK +65 6398 7972
Source: remisiers by CIMB
Analyst: Janice Ding +(65) 6210 8609 –
Despite the name Logistics, it is a REIT with portfolio used for logistics.

DBS Valuation Method:
Maintain BUY, TP S$0.70. Current price at 0.7x P/BV is in line to its smaller industrial peers is attractive. With a strong sponsor support and a S$3.0bn- unencumbered portfolio, MLT offers a potential for growth, on top of a stable FY09F-10F prospective yield of 10%. Base on increased earnings and a slight
lowering in equity risk premium (-50bps to 7.0% WACC).

CIMB DBS Valuation Method:
Maintain Neutral and target price of S$0.62. We maintain our estimates and
DDM-derived target price of S$0.62 (discount rate 9.4%). Although the pressure to
maintain occupancy and rents remains, we are encouraged by its relatively high
tenant retention rate of 80% and success in securing refinancing at lower interest
rates. We believe MLT will be able attain our forecast distribution for FY09.

Just reading how valuation are made

Frasers Commercial Trust (FCOT)

Source: remisiers by DMG
Analyst: Jonathan Ng (62323893,

- Dividend inline with consensus
- Strong balance sheet with gearing 32.7%, interest cover 4.5x
- One of lowest beta among S-REITS, 0.75x vs typical 1.1x

Valuation Method Use:
Price target raised to S$1.17 (S$0.83 previously) to reflect a lower cost-of-equity assumption of 7.5% (9.5% previously) and terminal growth rate of 1% (nil previously).

Reading just to see how analyst valuate stock

Wednesday, July 22, 2009

Singapore Property Updates

Source: by CMIB

Possible Risks Noted:
- whether incremental demand in 2010-2011 will be sufficient to absorb the slew of supply. At 2010, there will only 5,952 units based on the historical average takeup of 7,200 units

Nothing, just for information

Tuesday, July 21, 2009

[2009.07.20] Cacola Profit Warning

Source: sgx

"The Group expects the recent onset of the global financial crisis to continue to
affect consumers’ demand for furniture products in both the local and overseas market.

In addition to the closures of existing specialty stores by the Group in the previous quarters due to an increase in business risk, the Group also expects to continue to face difficulties in attracting new distributors to launch new specialty stores. As such, the Group is likely to incur a loss for 2Q2009 as compared to the previous corresponding period."

Action taken: Nothing, but just wait till I have time to analyze other stocks for opportunities.

Saturday, July 18, 2009

Investing is hard

Because it is not human nature.

Buy low, sell high is easier said than done. Gambling and taking calculated risks is separated by just a thin line.

Before investing, the first step is to understand your current financial status.
  • Emergency cash of about 3 to 6 months of your monthly expenses
  • Pay up debts with high interests. Eg, credit card, education, housing, car loans unless you can guarantee returns higher than the interests(leveraging)
  • Understand your financial goal and risk tolerance, although it may change as time passes

There are various investments
  • Self investment, eg your appearances, knowledge, etc.
  • Personal venture
  • Stocks, Warrants, Options
  • Bonds, Treasury Bills
  • Property
  • Currency
  • Others, eg friendship, family, relationship