As of 30 June 2020
CDP
| Security | # shares | Price S$ | % |
|---|
| DBS | 400 | 20.80 | 5.82 |
| OCBC Bank | 1,500 | 9.00 | 9.44 |
| SGX | 1,200 | 8.34 | 7.00 |
| SATS | 3,900 | 2.86 | 7.80 |
| ST Engineering | 4,100 | 3.30 | 9.46 |
| CapitaLand | 3,500 | 2.92 | 7.15 |
| Singtel | 4,000 | 2.46 | 6.88 |
| Powermatic Data | 2,800 | 2.48 | 4.86 |
| Micro-Mechanics | 1,300 | 1.75 | 1.59 |
| ComfortDelGro | 7,900 | 1.45 | 8.01 |
| Genting Singapore | 11,700 | 0.76 | 6.22 |
| Old Chang Kee | 4,700 | 0.725 | 2.38 |
| TheHourGlass | 3,000 | 0.69 | 1.45 |
| HRnetGroup | 11,600 | 0.495 | 4.02 |
| HC Surgical | 19,100 | 0.31 | 4.14 |
| Nam Lee Metal | 28,200 | 0.31 | 6.11 |
| Silverlake Axis | 20,800 | 0.235 | 3.42 |
| Kimly | 27,000 | 0.225 | 4.25 |
Portfolio Value = $142,984
Trade Actions
- Added 1,200 shares of Singapore Exchange.
- Added 1,300 shares of Micro-Mechanics Holdings.
- Added 1,800 shares of CapitaLand.
- Added 3,000 shares of The Hour Glass Ltd.
- Added 20,800 shares of Silverlake Axis.
- Sold 300 shares of Old Chang Kee.
SRS
| Security | # shares | Price S$ | % |
|---|
| OCBC Bank | 900 | 9.00 | 12.54 |
| SGX | 1,300 | 8.34 | 16.78 |
| SATS | 2,200 | 2.86 | 9.74 |
| ST Engineering | 1,700 | 3.30 | 8.68 |
| Singtel | 2,000 | 2.46 | 7.61 |
| CapitaCommercial Trust | 5,000 | 1.69 | 13.08 |
| Sheng Siong | 8,700 | 1.65 | 22.22 |
| HC Surgical | 19,500 | 0.31 | 9.36 |
Portfolio Value = $64,614
Trade Actions
- None
Commentary:
I used the recent market pullbacks to add some stocks to my CDP portfolio.
SGX - The selling abated around $8, which is a 23% drop from its high. I feel SGX still has the potential to earn a decent, albeit lower revenue. (It's a duopoly with HKSE in derivative trading within the Asian region.) SGX initiated stock buyback during end June, which could lend some near-term support. The exchange had taken its first baby step to replenish its derivatives offering, with the introduction of the SGX FTSE Taiwan Index Future [
announcement]. SGX had also announced acquisition of the remaining 80% ownership in BidFX, a cloud-based FX trading platform for institutional investors [
announcement]. This will become another revenue source over the long term. SGX is set to report its FY2020 results on 30 July.
Micro-Mechanics Holdings - This company popped up on my screener some months back. Its fortune is tied to the notoriously cyclical semiconductor industry, similar to other broker recommended stocks like AEM, Frencken and UMS. Balance sheet and margins look healthy, even though revenue and profit is seasonal. In 2019, the semiconductor industry suffered its worst year in almost two decades [
article]. (I know it personally because my wife was forced to clear leave.) But if the predictions of the World Semiconductor Trade Statistics organization were to come true, annual global chip sales should increase 5.9% in 2020 and 6.3% in 2021. This bodes well for Micro-Mechanics.
CapitaLand - I'd be the first to admit: this company has a poor ROE (10%), although management is working to improve it. I like the diversity in its revenue, both in geography and sector. (CapitaLand sells properties, leases them and manages private equity funds & REITs to own them.) Dividend yield (above 4%) is attractive at current price. The company has offered scrip election for its latest dividend [
announcement], but I won't be going for it because I dislike holding odd number of shares in my portfolio.
The Hour Glass - THG turned in a pretty good set of FY2020 results [
announcement]. Total revenue was $754.6m (up 4% y/y). Net profit was $77.5m (up 9% y/y). Only disappointment is the 2 cents annual dividend (Ex Date TBA), compared to 3 cents last year. The luxury industry had been hammered by the Circuit Breaker, but given THG's sizeable cash hoard of $183.1m (which covers its debt and payables comfortably), it should be able to weather through. Gross margin is an admirable 28.8%, and I believe their affluent customers' disposable income is hardly impacted by COVID-19. As The Business Times columnist Ben Paul remarked, "What better way to spend money earmarked for a cancelled trip to Europe than by picking up another luxury timepiece?" [
article]
Silverlake Axis - Brian from 3foreverfinancialfreedom.com wrote a detailed article [
here] on this company. The stock suffered from a short seller's report in Aug 2015 and it has been on a downtrend since. Nonetheless, the company is looking attractive at current price, with a FY2019 ROE of 41% and margins above 30%. Software is indeed a lucrative business (just ask my boss). Barring any adverse development, this company should be able to sustain its dividend.
Old Chang Kee - I've put up my position for sale, but the liquidity is pathetic. I was initially attracted to its high GPM and inflation-resistant pricing power. But increasingly, I'm getting bearish as the Circuit Breaker shut their eateries, even though the company commented offsite bento meal deliveries should help to minimize the loss in revenue [
announcement]. Regardless, I expect their 1H 2020 result to be devastated and it may take some time for the revenue to recover. Will offload into the rally.
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