Portfolio Summary for January 2024

As of 31 January 2024

CDP

Security	# shares	Price S$	%
DBS	400	31.88	3.95
UOB	400	28.37	3.51
OCBC Bank	700	12.89	2.79
SGX	2,700	9.41	7.86
ST Engineering	6,900	3.73	7.96
Powermatic Data	8,500	3.00	7.89
Micro-Mechanics	14,200	1.75	7.69
Sheng Siong	19,100	1.56	9.22
TheHourGlass	19,600	1.53	9.28
VICOM Ltd	21,500	1.44	9.58
Credit Bureau Asia	14,300	0.89	3.94
Nanofilm	36,100	0.69	7.71
HRnetGroup	21,900	0.71	4.81
China Sunsine	41,800	0.395	5.11
TalkMed Group	14,500	0.375	1.68
Kimly	27,000	0.31	2.59
HC Surgical	35,500	0.295	3.24
Silverlake Axis	15,000	0.26	1.21

Portfolio Market Value = $323,237
YTD Dividends Received = $0
YTD SBL Fees Received = $3

Trades
- Bought 4,600 shares of TheHourGlass.
- Bought 14,500 shares of Nanofilm Technologies.

SRS

Security	# shares	Price S$	%
DBS	100	31.88	2.72
UOB	200	28.37	4.85
OCBC Bank	900	12.89	9.91
SGX	1,300	9.41	10.45
ST Engineering	3,000	3.73	9.56
Micro-Mechanics	5,400	1.75	8.07
Sheng Siong	8,700	1.56	11.59
TheHourGlass	5,000	1.53	6.54
VICOM Ltd	5,500	1.44	6.77
Credit Bureau Asia	5,700	0.89	4.33
Nanofilm	12,500	0.69	7.37
HRnetGroup	7,500	0.71	4.55
China Sunsine	10,800	0.395	3.64
TalkMed Group	5,800	0.375	1.86
Kimly	5,800	0.31	1.54
HC Surgical	19,500	0.295	4.91
Silverlake Axis	6,000	0.26	1.33

Portfolio Market Value = $117,053

Trades
- Bought 7,000 shares of Nanofilm Technologies.
- Sold 3,400 shares of Powermatic Data.

Singapore Savings Bonds

Security	Amount ($)	Avg Yld %
GX22120S	14,000	3.47
GX23010Z	15,000	3.26
GX23110V	20,000	3.32
GX23120Z	20,000	3.40

Portfolio Market Value = $69,000

Commentary:

The U.S. equity market started the year with a bang.  The S&500 Index hit a new lifetime high, despite investors realizing that the U.S. Fed may not cut interest rate so early in the year.

On the other hand, the local STI tripped and fell right out of the gate, losing 2.7% in January.  Major contributors to the loss include DFI Retail Group (-16.7%), Seatrium (-15.3%) and Jardine Cycle & Carriage (-12.6%).

I took the opportunity to load up on TheHourGlass and Nanofilm Technologies as the two counters faced heavy bouts of selling in the market.  So far I see no change to their underlying fundamentals, so I'm not worried.  (I cannot imagine a time when luxury watches go out of fashion.)

In the spirit of audacious New Year resolutions, I have set myself a goal to DOUBLE UP on my CDP portfolio investment in 2024.  It is a stretch target beyond common sense, but one I hope will spur me to catch up on my retirement plan.  I shall review the outcome in December!

Lately, I've also begun to think about the strategic direction I want to take with my SRS portfolio.  All along, I've built my SRS portfolio like a miniature version of my CDP portfolio, with my own weighting methodology and choice of stocks.  The benefit is that I have only one set of companies to monitor.

But it is starting to make no sense to me.  Firstly, the quantum of my SRS portfolio is small.  Each buy trade costs a fair amount of charges, so there isn't any reason to spread my SRS money over a large number of stocks.  Secondly, my CDP portfolio is stacked towards healthy companies that can grow their business over time.  There is volatility as the companies go through cyclical upswings and downswings in their respective industry.  For my SRS portfolio, I should be looking for stability and yield maximization, i.e. investing in securities that provide regular distributions and reinvesting the payout, so that my SRS money can compound at a faster clip.  Lastly, prior to 2015, we have to liquidate all our SRS investments into cash for withdrawal after the statutory retirement age.  But now, we can apply to our SRS operator to transfer the investments out of our SRS account into our CDP account, without having to liquidate them (see official answer [here]).  Having just one or two counters in my SRS portfolio will facilitate this transfer.  Do note that any transfer is still subjected to income tax (based on the transferred investment value), though there is a 50% tax concession.

All this rebalancing is going to cost me quite a sum in transaction fees.  I will adjust my SRS holdings gradually over the course of the year.  I shall review the transformation progress in December!

Earnings reporting season is upon us.  Here are the confirmed result release dates for companies in my portfolio:

01 Feb 2024 - SGX
07 Feb 2024 - DBS
22 Feb 2024 - UOB
28 Feb 2024 - OCBC
29 Feb 2024 - ST Engineering

March issuance of the Singapore Savings Bond (SSB) may see a slight uptick in average yield to 2.88% (estimated).  But it is still far below my requirement, so I will not subscribe for the SSB.

My wife and I have started going out together every Friday night, leaving our children at home.  On weekdays, we are busy with work and household chores; on weekends, we are busy with our kids' enrichment classes.  We hardly have time for each other.  Committing to Friday date nights is a way to strengthen our relationship, and to have some quiet time to ourselves.  We're enjoying it!

As you may have noticed, I'm blogging more frequently now.  Hope to put out more articles sharing my experience and insights, so that readers can get an alternate perspective.

The Lunar New Year is just around the corner.  Many Chinese families are spring cleaning and throwing away old junk.  Shopping malls are packed with people buying new stuff, and stocking up food for the reunion dinner.  The bak kwa (barbecued meat slices) and pineapple tart sellers have their best sales around this time of the year.  Many shops have begun selling CNY goodies too.  I can see long queues outside bank branches for the exchange of new dollar notes.  The boisterous crowds simply add to the festive atmosphere.

Signing off for now.  For my Chinese friends, here's wishing you and your family a blissful & prosperous Year of the Dragon!  Gong Xi Fa Cai!

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Portfolio Summary for October 2023

As of 31 October 2023

CDP

Security	# shares	Price S$	%
DBS	400	32.85	3.56
UOB	400	27.02	2.93
OCBC Bank	700	12.68	2.41
SGX	2,700	9.47	6.93
ST Engineering	6,900	3.76	7.03
CapitaLand Investment	10,100	2.94	8.05
SATS	8,200	2.46	5.47
Powermatic Data	8,500	2.65	6.11
TheHourGlass	15,000	1.65	6.71
Micro-Mechanics	14,200	1.80	6.93
VICOM	21,500	1.29	7.52
Sheng Siong	19,100	1.55	8.03
Nanofilm	21,600	0.93	5.45
Genting Singapore	11,700	0.86	2.73
Credit Bureau Asia	14,300	0.90	3.49
HRnetGroup	21,900	0.69	4.10
TalkMed Group	14,500	0.39	1.53
China Sunsine	41,800	0.40	4.53
HC Surgical	35,500	0.33	3.18
Kimly	27,000	0.305	2.23
Silverlake Axis	15,000	0.27	1.10

Portfolio Market Value = $368,884
YTD Dividends Received = $11,270
YTD SBL Fees Received = $898

Trades
- Bought 10,000 shares of TheHourGlass.
- Bought 3,700 shares of VICOM.
- Bought 2,700 shares of CapitaLand Investment.

SRS

Security	# shares	Price S$	%
DBS	100	32.85	2.35
UOB	200	27.02	3.86
OCBC Bank	900	12.68	8.15
SGX	1,300	9.47	8.79
ST Engineering	3,000	3.76	8.05
CapitaLand Investment	2,600	2.94	5.46
SATS	3,800	2.46	6.67
Powermatic Data	3,400	2.65	6.43
TheHourGlass	5,000	1.65	5.89
Micro-Mechanics	5,400	1.80	6.94
VICOM	5,500	1.29	5.07
Sheng Siong	8,700	1.55	9.63
Nanofilm	5,500	0.93	3.65
Credit Bureau Asia	5,700	0.90	3.66
HRnetGroup	7,500	0.69	3.69
TalkMed Group	5,800	0.39	1.61
China Sunsine	10,800	0.40	3.08
HC Surgical	19,500	0.33	4.59
Kimly	5,800	0.305	1.26
Silverlake Axis	6,000	0.27	1.16

Portfolio Market Value = $140,070

Trades
- Bought 7,500 shares of HRnetGroup.
- Bought 5,000 shares of TheHourGlass.

Singapore Savings Bonds

Security	Amount ($)	Avg Yld %
GX18070N	12,500	2.63
GX22120S	14,000	3.47
GX23010Z	15,000	3.26
GX23110V	20,000	3.32

Portfolio Market Value = $61,500

Commentary:

While the Russia-Ukraine war is still ongoing, another battlefront erupted in the Middle East between the Hamas group and Israel. Neither party seems to be willing to negotiate for peace. Thousands of civilian lives have been lost in the Gaza Strip. It is a horrendous tragedy.

I am grateful Singapore is in a stable geopolitical region. We have cordial relationship with our neighbours and we are relatively shielded from natural disasters, apart from the man-made haze. We are lucky. But we should never take this fortune for granted.

Global equity markets retreated in October. The S&P 500 Index ended the month down 2.2% but our local Straits Times Index tanked 4.7%. For investors who have been patiently waiting on the sidelines, this is a chance to deploy our capital at favourable prices. I took the opportunity to load up on shares of CapitaLand Investment, HRnetGroup, VICOM and TheHourGlass.

Besides stocks, I also subscribed for $20,000 of the latest SSB tranche. The average return of 3.32% is comparable to the dividend yield of most common stocks. Moreover, I like the relatively flat yield curve for this issuance. We earn 3.21% interest consistently for the first six years, before stepping up and ending the last two years at 3.63%.

Rumours on The Street is that the U.S. Federal Reserve will likely do one more interest rate hike. This means the yield may go higher. Conversely, this also means the borrowing cost is likely to stay elevated for some time. Be wary of companies with a high debt load and facing challenges generating cashflow. They are one step away from bankruptcy. Just look at the Chinese developers Country Garden and Evergrande.

October was also the month when my wife and I celebrated our twelfth wedding anniversary. Both of us took a day off from work, spent time shopping, and enjoyed a sumptuous meal. In the evening, I presented my wife with a beautiful floral bouquet. I was never known to be romantic, so it was a pleasant surprise. Sadly, the bouquet lasted only a short while before her Engineering habit kicked in and she started dissecting the bouquet to sort out the flowers. Haha.

Someone is shyly hiding behind the flowers. =)

School examinations are finally over. My kiddos are now enjoying themselves, waiting for the holiday to start. We have an Australian trip planned in mid-November. Going to tour Brisbane, Sunshine Coast and Gold Coast. The anticipation is building!

Until next time!

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Portfolio Summary for March 2022

As of 31 March 2022

CDP

Security	# shares	Price S$	%
DBS	300	35.83	4.44
OCBC Bank	700	12.38	3.58
SGX	1,200	9.97	4.95
SATS	3,900	4.34	7.00
ST Engineering	4,100	4.12	6.98
Micro-Mechanics	1,300	3.20	1.72
Powermatic Data	5,000	2.99	6.18
Singtel	6,100	2.64	6.66
TheHourGlass	5,000	2.33	4.82
Sheng Siong	13,000	1.52	8.17
ComfortDelGro	11,200	1.49	6.90
Genting Singapore	11,700	0.815	3.94
HRnetGroup	21,900	0.77	6.97
HC Surgical	35,500	0.49	7.19
China Sunsine	41,800	0.465	8.04
Kimly	27,000	0.395	4.41
Silverlake Axis	60,800	0.32	8.04

Portfolio Market Value = $241,861

Trade Actions
- Sold 10,400 shares of The Hour Glass.
- Sold 2,700 shares of ST Engineering.
- Sold 2,700 shares of CapitaLand Investment Management.
- Sold 3,400 shares of CapitaLand Integrated Comm. Trust.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	12.38	11.41
SGX	1,300	9.97	13.27
SATS	2,200	4.34	9.78
ST Engineering	3,000	4.12	12.65
Singtel	2,000	2.64	5.41
Sheng Siong	8,700	1.52	13.54
ComfortDelGro	6,900	1.49	10.53
HC Surgical	19,500	0.49	9.78
China Sunsine	10,800	0.465	5.14
TalkMed Group	3,700	0.40	1.52
Silverlake Axis	21,300	0.32	6.98

Portfolio Market Value = $97,669

Trade Actions
- Bought 3,700 shares of TalkMed Group.

Commentary:

Even while the Russia-Ukraine war is ongoing and economists are worried about "stagflation", there is a positive vibe in the air. That is because the government has relaxed its COVID-19 safe management measures.

Overseas visitors will no longer need to be quarantined or tested on arrival. F&B outlets can serve up to 10 fully vaccinated patrons in a group. Live music events and alcohol consumption after 10.30pm can resume.

In short, life is almost back to normal.

This bodes well for aviation and tourism-related stocks like Singapore Airlines, SATS and Genting Singapore. Like a rising tide lifting all boats, the prices of other mega cap stocks such as ST Engineering, Comfortdelgro and Singtel also received a boost.

I grabbed the chance to sell into the rally as a few of my holdings crossed their 52-week high. I squared off my entire position in CapitaLand Investment Management (CLI) as well as CapitaLand Integrated Commercial Trust (CICT). CLI saw its stock price rocketed recently. I have no idea why investors are so bullish on the company, but I decided to take my profit and move on. CICT was my last Reit holding, and with this sale, my CDP portfolio is completely cleared of Reits. No regret though, as my investment focus has changed.

At the same time, I nibbled on TalkMed Group for my SRS portfolio. TalkMed provides medical oncology and palliative care services to patients in Singapore. The company has been well covered by other bloggers (see [here] and [here]), so I won't elaborate further on why I like the stock. The company received SGX approval to transfer its listing from the Catalist board to the Mainboard [news]. One risk though, is the lack of liquidity, which makes it challenging to get out of this counter at a good price. Nonetheless, my SRS portfolio has a long-term horizon, so this isn't an immediate concern. I would love to add this counter to my CDP portfolio when an attractive opportunity appears.

I recently read a book written by the founder of Pheim Asset Management (PAM), Dr. Tan Chong Koay. PAM has been successful in generating consistent alpha from trading small and medium-cap stocks in Southeast Asia. Their investment philosophy is unique - while PAM looks for undervalued stocks, they operate on the basis to "never be fully vested at all times". This means during exuberant times when valuations are overstretched, PAM is always ready to sell the stocks in its portfolio and go all cash.

In regional bourses, volatility is rampant. Prices rise and fall depending on which stocks are the flavour of the day. The small market capitalization and lack of analyst coverage mean many companies go unnoticed on the secondary board. While certain counters remain unloved by the market for years, a majority of them get traded up once their strong fundamentals are recognized. By buying low ahead of others and selling on the way up, PAM was able to profit handsomely.

Now, this sounds a lot like market timing, but PAM never claimed to be able to time the market. This also deviates from the buy-and-hold-forever mindset of Buffett devotees. That said, PAM's principled approach has its merits - human nature means long-only investors are susceptible to endowment effect and confirmation bias. By being disciplined to sell when valuation dictates so, there is less emotional attachment and the excess cash can be re-deployed to capture other opportunities.

Speaking of cash, my dry powder has grown considerably and is over 40 percent of my total portfolio value. I would love to deploy it generously, albeit not at current market prices. My view is that the recent optimistic outlook is only fleeting. However, inflation is real and climbing throughout the world. From ultra-loose monetary policies to supply chain bottlenecks to post-pandemic ramped up consumer demand, all these contributed to the inflationary environment today. Already, we are feeling the heat from the spike in food and fuel prices. Companies will see increased costs eat into their bottom line. If they are not able to pass on the increment to their customers, those companies will face margin squeeze over the next few quarters^#. Lower investor expectations should moderate the stock prices accordingly.

By the way, if you have ten minutes to spare, I recommend you to watch this interview video with billionaire investor Ray Dalio of Bridgewater Associates [here]. Bridgewater is a very successful hedge fund and is currently the largest in the world (with US$150 billion AUM). Ray shared how the signs of recent times reminded him of the Depression era situation of the 1930s, and warned investors to be cautious. My favourite takeaway from the video is this quote:

When everyone starts to extrapolate the past (uptrend), the past will not perform up to expectations, and that is the time to sell.
Ray Dalio

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# This also makes the point why it is important to choose companies with healthy profit margin (preferably double-digit) in the first place.

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Portfolio Summary for July 2020

As of 31 July 2020

CDP

Security	# shares	Price S$	%
DBS	400	19.77	5.03
OCBC Bank	1,500	8.56	8.17
SGX	1,200	8.17	6.24
SATS	3,900	2.74	6.80
ST Engineering	4,100	3.27	8.53
CapitaLand	3,500	2.76	6.14
Singtel	4,000	2.48	6.31
Powermatic Data	2,800	2.44	4.35
Micro-Mechanics	1,300	1.93	1.60
ComfortDelGro	7,900	1.36	6.83
Genting Singapore	11,700	0.735	5.47
Old Chang Kee	4,700	0.71	2.12
TheHourGlass	15,400	0.675	6.61
HRnetGroup	21,900	0.48	6.69
China Sunsine	9,700	0.335	2.07
HC Surgical	19,100	0.315	3.83
Nam Lee Metal	28,200	0.305	5.47
Silverlake Axis	20,800	0.295	3.90
Kimly	27,000	0.225	3.86

Portfolio Value = $157,231.50

Trade Actions
- Added 9,700 shares of China Sunsine Chemical Holdings.
- Added 10,300 shares of HRnetGroup.
- Added 12,400 shares of The Hour Glass Ltd.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	8.56	12.06
SGX	1,300	8.17	16.63
SATS	2,200	2.74	9.44
ST Engineering	1,700	3.27	8.71
Singtel	2,000	2.48	7.77
CapitaCommercial Trust	5,000	1.61	12.61
Sheng Siong	8,700	1.70	23.16
HC Surgical	19,500	0.315	9.62

Portfolio Value = $63,854.50

Trade Actions
- None

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Portfolio Summary for June 2020

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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