Thursday, December 31, 2009

Holding Review on December 2009

Just the addition 50 lots of Iconic Holding at the start of the month. Been a nice year for me in investing. This blog forces me to think when I buy/sell, although rationalization does not equates profit. I learned about how bad I am in investment so I have shun lots of investment. Surprisingly, I have gone into delisting companies and will definitely research more into them.

Review





StockPurchase DateAnnualized ReturnBuying PriceCurrent Price
Powerplus15-Jan-2008-37.99%0.2150.055
STI ETF*15-Jan-2008-7.83%3.472.95
Cacola17-Oct-2008-31.90%0.0950.06
STI ETF*17-Oct-200831.70%2.082.95
ASA Group28-Sep-200928.94%0.0550.06
STI ETF*28-Sep-200934.28%2.672.95
Iconic Holding27-Oct-2009-2.03%0.1650.165
STI ETF*27-Oct-200938.66%2.752.95
Iconic Holding3-Dec-2009-4.87%0.1650.165
STI ETF*3-Dec-200931.33%2.872.95


I still haven't sold Powerplus or Cacola, a sign that I am probably too emotional. Regardless, keeping them till I figure they are really in trouble. I will also keep ASA while keeping in touch of its update. Iconic Holding meeting will be in January and I should probably prepare to send my envelope accepting the cash offer.

Going forward, I am considering to create another blog and programmatically post SGX news into it. I really hate that how hard SGX website is for searching news. I will recommending http://stiboard.com/livequote/announcement/ too if you have the same problems too.

Wednesday, December 30, 2009

Fung Choi Media Group Limited (F11)


Looking into Fung Choi, because a friend asked for thoughts on it. Honestly, I had stop looking into financial because
1) the huge variation in numbers and expected growth, I find that I am very bad at estimating with historical data.
2) the huge time and effort needed, M&A seems more easy but of course have limited growth
3) Most importantly, I don't know how to set a target price range


Company Info:

Fung Choi Media Group Limited is an investment holding company. Through its subsidiaries, the Company is engaged in printing of advertising materials, magazines, books and light packaging boxes, manufacturing and printing of corrugated carton boxes, provision of advertising agency services and design, manufacture and sale of commercial point-of-sale display units. It operates in four segments: Printing division, which is engaged in printing of advertising materials, magazines, books and light packaging boxes; Packaging division, which is engaged in manufacturing and printing of corrugated carton boxes; Advertising division, which is engaged in provision of advertising agency services, and Commercial displays division, which is engaged in design, manufacture and sale of commercial point-of-sale display units. During the fiscal year ended June 30, 2009, the Company disposed of its entire interest in Guangzhou Fung Choi Printing Co., Ltd.

IPO Detail: (2004)


S$34.7m : Net proceed of which,
$ 6.2m : Invest in joint venture between with FCPL and GPPG,
$ 6.3m : Repay borrowings
$ 5.8m : Fund development, automation and improvement of production managment system
$ 2.1m : Further investment in new joint venture or working capital
$14.3m : Working capital

No formal dividend policy

Competitive Strength:

Strong business partners, National Statistics Bureau in Beijing, Haier Group Corrporation in Qingdao, F&N Investment.

Competition:

Mostly, China based companies. Fragmented market.

Future Plans:

  • Seek alliance with strategic partners
  • Increase market penetration and promotion activities
  • Increase application of production managment system

Why not?

It is easier to find a reason to buy a stock. So I rather ask myself, why I should not buy a stock.
  • Based on IPO, they invest in new and advanced printing machinery with 5 years left. It is almost time to upgrade and increased capex?
  • Slowing revenue growth since IPO at 9%
  • Receivable growth much higher than revenue growth? 48% vs 9% in FY2009. Possible difficulties in recovering the receivables?
  • Dropping profit margin, ROE
  • FY2009 states increased operating cost from transportation, labor and material
  • FY2009 states huge decline in outdoor advertising
  • Increasing current liabilities
  • Q1 FY2010 Profit drops 6% compared to Q1 FY2009
  • Q1 FY2010 Selling expenses rises 40.3% compared to Q1 FY2009, various expenses also increases in double digits.
  • Q1 FY2010 receivable growth of 12% outgrowth Q1 FY2010 Revenue growth of 9.4%
  • Increasing number of issued shares
  • Convertible Bonds representing 12% of issued capital @ S$0.75 for each Share that might dilute values?


Not going to comment about buy or sell since I really don't know how to estimate. However, I am going to track the news of this company.

References:

  1. NextInsight 2007 - FUNG CHOI issues RMB380 m bonds ahead of subsidiary's IPO
  2. SGX - Fung Choi 2004 IPO Details
  3. SGX - Fung Choi Q1 Update
  4. SGX - Fung Choi Respond to SGX Query
  5. SGX - Fung Choi FY2009 Annual Report
  6. SGX - Fung Choi Disposal of Guangzhou Fung Choi Printing
  7. Fung Choi Website

Monday, December 28, 2009

Singapore's biggest air-con interchange opens


Finally, the $24-million air-con Boon Lay Interchange opens today. Newspaper reports that most commuters give the thumb ups. However, my first thought on reading it was actually disgust. The thought of how much energy are we going to spend just to cool the biggest air-con interchange at one of the hottest cities, just makes me feel it was extravagant. Hopefully, there are energy-saving measures and the air-con temperatures are appropriate. Searching on the internet, there are comments at Straits Time on the air-con, the interchange built for foreign, needing more buses and not aircon. SGForum had a more detailed discussion.

Regardless, the reports end with the unsurprisingly trend of more air-con hub. Transport Minister Raymond Lim had said in August that the LTA will build more "integrated public-transport hubs" that give commuters easy access to adjoining shopping areas and other transport modes.

The next air-conditioned integrated interchanges, being built at Serangoon and Clementi, are slated to open in 2011. In the next 10 years, commuters can also expect such interchanges in Jurong East, Bedok, Joo Koon and Marina South.

Thursday, December 24, 2009

MoneySense Links


MoneySENSE is a national financial education programme launched by Mr. Lee Hsien Loong, then Deputy Prime Minister and Chairman of the MAS on 16 October 2003. MoneySENSE brings together industry and public sector initiatives to enhance the basic financial literacy of consumers.

The MoneySENSE programme covers 3 tiers of financial literacy:


Tier I - Basic Money Management - which covers skills in budgeting and saving, and provides tips on the responsible use of credit;
Tier II - Financial Planning - to equip Singaporeans with the skills and knowledge to plan for their long-term financial needs; and
Tier III - Investment Know-How - which imparts knowledge about the different investment products and skills for investing.

Webcasts/Videos
Main Page to 4 Videos
1) Sharing - The Secrets To Better Family Financial Management, Presenters: Edmund Chen and Xiang Yun
2) Where do I park my money? Presenter: Prof Jeremy Goh
3) Making SENSE of Home Loan, Presenter: Dennis Ng (Watch this if you are considering taking loan)
4) Highlighting the Risks and Pitfalls of Investments, Presenter: Mr David Gerald (Must watch and do the calculation)



References:

  1. Buying a Home and taking a Home Loan PDF
  2. Key Questions to Ask the Bank Before Taking a Home Loan
  3. 10 Questions All Investors Should Ask

Saturday, December 19, 2009

Cash Offer for Jurong Cement (J04)


Another company being taken over, Jurong Cement. A quick check at the news find 5 directors resigned recently, reported from the Business Times. Since it was announced over the weekend, there is an opportunity to look into more details.


Company Info:

Jurong Cement Limited (JCL) is an investment holding company. The operations of the Company and its subsidiaries are grouped mainly under property investment and investment holding, and manufacturing and dealing in cement. Jurong Readymix Concrete Pte Ltd is a core business of the Company, and delivers a range of concrete. JCL Drymix is a dry-mix mortar that includes render and skimcoat plasters, construction grouts and mortar, flooring compounds and screeds, waterproofing tile adhesives and protective coatings under the JURCEM brand. The Company's cementitious division receives imported ordinary portland cement and ground granulated blast furnace slag using bucket elevators and fluidslide distribution system that boost a capacity of 900 tons per hour (tph). Jurong Cement Bulk Terminal Pte Ltd is also designed with blending facilities of up to 120 tph to cater to blended cement, offering a range of cementitious materials for special concrete and dry mortar applications.


The current price now $1.28 and the offer price is $2.10. However, it is very very illiquid, with the last trade at 18th Nov(1 month ago) and only 5k. I guess the offer price is attractive to current shareholder and will probably see more volume. Will definitely take a look on the order queued up and prices.

References:

  1. Google Cache of Business Time - Conflict in Jurong Cement board
  2. Google Cache of Business Time - $2.10 a share offer for Jurong Cement
  3. SGX - Offer Docuemnt

Thursday, December 17, 2009

Naked short selling on Chemoil?

I was thinking, after I saw that the offer price of Chemoil was lower than it's last close price, perhaps I should have tried to naked sell it. However, I have no confidence it will drops or rises(if someone tries to counter bid the offer). Furthermore, I have no knowledge how to do naked selling. I only know if you don't settled it by the end of the day, you have to pay a fine of $1,000+. I should probably ask my remisier/broker about it.

A little update on Iconic Holding, the Meeting will be at 11 Jan 2010. I haven't seen any update on the percentage of shareholding. Will probably need to hold it for quite a while.

Wednesday, December 16, 2009

Cash Offer for Chemoil (AV5)


A pre-conditional takeover offer by Glencore International

Chemoil Energy Limited and its subsidiaries are mainly global traders in marine fuel products. The Company operates in ports, such as Long Beach, Houston, New Orleans, New York, Panama, Rotterdam, Fujairah and Singapore. As of December 31, 2008, it was organized into three segments: retail, which is engaged in the sales of physical supplies of marine fuel and related products; cargo, which is engaged in the sales of marine fuel and related products, such as the components of marine fuel used to blend into marine fuel, to customers such as traders, physical suppliers and resellers, and ex-wharf, which is engaged in sales of marine fuel to customers, such as resellers or distributors that accept delivery at its service centers and resell and deliver the product.


The transaction for the Chandran’s portion of the stock must be completed within two business days of Feb. 28, according to the purchase document. What confused me is that the offer price is much lower than the latest stock price.

References:

  1. Chemoil Holding Announcement
  2. Bloomberg - Glencore Buys 50.8% Stake in Chemoil for $233 Million

Delisting Company: Furama (A09)



Yet another company delisting with similar reasons, no reason for listing and poor liquidity.

Company Info:

Furama Ltd. is a Singapore-based company. The Company owns, operates and invests in hotels. The Company operates in two segments: hotel operations and property investment activities. Its hotel operations segment is engaged in operating hotels owned by the Company. Property investment activities include property development and investment holdings.

Profit Margin:

Selling @ Offer Price of $2.00
Buying 5 lots @ 1.97 = 0.81%
Buying 5 lots @ 1.98 = 0.30%

Not attractive at all but still an option.

References:

  1. SGX Offer Document
  2. Edge Singapore - Samta Hotels makes cash offer for all remaining Furama shares for delisting

Tuesday, December 15, 2009

Delisting Company: Sunway International Holding (S34)


Didn't see any delisting offer in the document. It is a dually-listed in HK too.


Company Info:

Sunway International Holdings Limited was found by the Wong's Family in the early 80's. It is one of the leading manufacturer and supplier of consumer electronics with six well equipped production facilities located in Fujian Province of The People's Republic of China. The company has grown from a modest, family business to a vertically integrated, multi-national corporation with a skilled workforce of some 15,000. Over the years, Sunway has established extensive distribution channels covering major Provinces in the PRC and an active, international customer base of over 1,500. The company is listed in the Hong Kong Stock Exchange and the main board of The Singapore Exchange Securities Trading since 1999.

References:

  1. SGX - Delisting Document
  2. Sunway International Holding Website
  3. Business Times

Thursday, December 10, 2009

Delisting Company: China Lifestyle Food And Beverages Group (E69)

China Lifestyle Food and Beverages Group Limited is a lifestyle food and beverages company in the People's Republic of China. The Company manufactures and distributes a variety of jelly desserts and beverages, as well as a range of candies and potato chips.
Rationale for delisting:

Greater management flexibility. Allow offeror to rationalize the resources and cost structure for greater efficiency and competitiveness
Restructuring. Conduct review to decide whether a) change existing business b) redeploy fixed assets c) discontinue employment of employees

Profit Margin: Selling @ Offer Price $0.178 on the market
3.97%, Buy 51 lots @ 0.17
1.00%, Buy 50 lots @ 0.175

My money is locked in Iconic Holding, so will probably only look at it when I got the money back.

References:

  1. SGX - Delisting Offer
  2. ChannelNewsAsia - China Lifestyle Food & Beverages plans to go private

Buy an iPhone in Singapore?


I recommend reading the comparison table @ iMerlion. It shows the costs for the different plans by each telco.

The blog also focus on Singapore iPhone applications so it is worth subscribing to get updated too.

Saturday, December 5, 2009

Retirement and CPF Life


For Singaporean, the CPF Website have improved but still hard. It can be better to have personalized information based on the date of birth instead of looking at generalized tables for different age groups, or flash that requires input of date of birth or OA/SA/RA amount every time.

I decided to find retirement information for my parent since we have no idea about their CPF monies.



CPF Life vs Minimum Sum payout. (Only those born before 1959)Only a choice for older generation since it is compulsory for younger generation to be in the CPF Life. Firstly, you need to know roughly your
1. Annual Value(AV) of your property,
2. Assessable Income.

I know the above are for deciding your CPF Life Bonus. Typically, a male get more payout than a female, probably due to the higher life expectancy of a female. According to IRAS, there should be a portfolio showing the property AV but I cannot find it. However, based on the calculation of the property tax paid (4% of AV if you own and occupy), I can gauge that the AV is in the < $6,000 range.

I added the CPF Life Bonus and calculated a simple compound interest on the RA+CPF Life Bonus and then assuming 5% interest(4% for retirement account and 1% for first $60,000) till the DDA(Drawdown age) and got the estimated amount in RA at retirement. Then, I used an online annuity calculator to determine roughly how many years the amount can last to get the same monthly payout as the CPF Life Income Plan(highest payout w/o any bequest).

I found the breakeven to be
Probable Amount in RA @ DDAAnnuity Interest RateYears it can last to match CPF Life Income Amount
$8,7525%22
$8,7524%(Most likely the estimator used this)19
$8,7523%17


Perhaps I should not used 5% as the interest till the DDA, but regardless if I have just used the way of dividing the RA by the given monthly payout, it will only be 10 years ignoring all interests gained. Seems like joining the CPF Life might not worthwhile unless my parent outlived the years calculated. Regardless, we need to visit CPF to get more details about the estimated minimum sum payout and the CPF Life payout to make a decision. I do believe I overestimated the calculation but I also believe the CPF Life makes profits for the government/insurance companies it buy the annunities from.

Another way of comparison is to compare with other annuities companies like the 3 big banks or NTUC. I think CPF is probably offering a better rate . There is a better blog post with more technical calculation. Someone also post a question to Mr Tan Kin Lian and got a couple of responses from him and the readers.


Life expectancy. Knowing the rough breakeven, the question is the life expectancy of my parent. CPF Life is a gamble that you can outlive the average person they predict. Honestly, when I think about it, I have no clue how long someone can live. I know my parent say the obituary still have people in their 50s or 60s despite media mentioned of increasing life expectancy. It is probably due to the increasing life expectancy is for those who are born later. Singapore Statistics does provide a yearly lifetable showing your life expectancy. Looking at the statistics, I was surprised the life expectancy of everyone seem to keep growing, compared to the lifetable of 2003, and the life expectancy is about the same regardless of your current age. Based on the latest statistics, it is roughly 84 years old. If it is true, it might be worthwhile to get my parent on the CPF Life scheme.

Dependants' Protection Scheme (DPS) as additional term insurance cover. While looking through the CPF, I realized there is a DPS scheme that provides affordable term insurance. It covers $46,000 up to age 60 and costs onl y at most $260 a year for those very close to 60. It does seems very cheap and should be taken into consideration. Not too sure about the restriction yet but it does feel very worthwhile. A blog post with the premium amount, I could not link the website from the CPF help page.

Voluntary Deferment Bonus (V-Bonus). Further reading up, I found about the deferment bonus as incentive for older generation to defer their DDA(Drawdown age) to 65. The CPF Calculator. It is roughly 2% of $30,000 if you have at least that amount in your RA.

Tax relief for parents. You can also get $7,000 tax relief for topping up your parent CPF with cash if it is less than the Minimum Sum. They can be additional savings too and might be worthwhile. For cash top-ups for siblings/spouse, the sibling/spouse must not have earned more than $2,000 in the preceding year.

Medisave Minimum Sum. With effect from 1 July, the Medisave Minimum Sum (MMS) will be raised to $32,000 from $29,500. Members will be able to withdraw their Medisave savings in excess of the MMS at or after 55 years old. I always thought money in the Medisave will be gone but just found out it can be partially withdraw if it above the minimum sum.


Probable tasks. To find out more from CPF,
- CPF Life will get exactly how much? (or is it only known when the annuity is bought at DDA?)
- Minimum Sum payout (how much monthly and how long it can last, interest is CPF RA rate or based on the bank?)
- Life Plus/Income plan, entire RA for annuity premium. (What if still got CPF? the amount in OA/RA?)
- V-Bonus, how will it affect the amount?
- Sign up before 31st Dec 2010 for $4,000 bonus (or pro-rated bonus)

I wonder if CPF will provide a financially skilled assistance that provide on-the-spot calculation/estimate or just a rough assistance that tell you about the various scheme only.

Friday, December 4, 2009

Added 50 lots of Iconic Holding

Staying fully invested again with 50 additional lots of Iconic Holding @ 0.165. Might have better deals elsewhere with the market sudden uptrend. Regardless, I will stick to the lazy and more guaranteed way of earning money from the stock market by getting these delisting companies. I have not been researching much, just skimming through news. Iconic did have a recent update of your balance sheet.

References:

SGX - Iconic Holding Update

Thursday, December 3, 2009

Full Apex, NextInsight, Gambling

I read other financial blogs too, and interesting discover there is one on Full Apex. I had already profited from it and was surprised at how soon I managed to sell it. Perhaps it got to do with someone wanting to oppose it and feel the offer is undervalued.

Sometimes I read the NextInsight and how profitable the stock challengers mostly are and wonder if it is really so easy. You could then just mimic then and profit too then. Perhaps the stock rises because everyone follows the challengers and buy. It results in a self-fulfilling prophecy since everyone thinks they will profit.

I also read up some gambling theories, not from the bettor point of view but rather the organizer point of view. I am interested to know why do people are buy something that they know the odds are against them. I feel that equity investment is a form of gambling but the odds are much better than those offered by Singapore Pools. Of course, there are ways to win for sure with arbitrage but in Singapore there is only 1 legal gambling outlets so no chances to apply that. Basically, people continue to gamble, even when they lose,
a) underestimate the chance of losing, (most people are very bad with mental calculation)
b) near miss (where you miss by a number or different arrangement)
c) sense of ownership for the numbers (you buy your date of birth or car license plate)
d) huge prizes
e) revenge (emotionally want to win back your losses)
f) sense of winning (having lucky friends that win)

References:

  1. Blog on opposing Full Apex delisting @ I’ll do it myself
  2. Next Insight - Stock Challenge