Portfolio Summary for November 2024

As of 30 November 2024

CDP

Security	# shares	Price S$	%
DBS	440	42.43	4.37
UOB	400	36.36	3.41
OCBC Bank	700	16.28	2.67
SGX	3,200	12.72	9.53
ST Engineering	6,900	4.50	7.27
Powermatic Data	8,500	2.96	5.89
TheHourGlass	19,600	1.53	7.02
Sheng Siong	19,100	1.65	7.38
Micro-Mechanics	18,400	1.66	7.15
VICOM Ltd	21,500	1.32	6.64
UMS	31,200	1.03	7.52
Credit Bureau Asia	30,100	1.19	8.39
Nanofilm	36,100	0.78	6.59
HRnetGroup	21,900	0.69	3.54
TalkMed Group	34,500	0.45	3.63
China Sunsine	41,800	0.48	4.70
Kimly	27,000	0.325	2.05
HC Surgical	35,500	0.27	2.24

Portfolio Value = S$427,123
YTD Dividends Received = S$15,202
YTD SBL Fees Received = S$300

Trades
None

SRS

Security	# shares	Price S$	%
TheHourGlass	5,000	1.53	5.49
Micro-Mechanics	5,400	1.66	6.43
VICOM Ltd	5,500	1.32	5.21
Nanofilm	12,500	0.78	7.00
HRnetGroup	7,500	0.69	3.71
Kimly	5,800	0.325	1.35
HC Surgical	19,500	0.27	3.78
NetLink NBN Trust	108,000	0.865	67.03

Portfolio Value = S$139,369

Trades
- Sold 8,700 shares of Sheng Siong Group.

Singapore Savings Bonds

Security	Amount	Coupon Now
GX22120S	S$14,000	3.26%
GX23010Z	S$15,000	2.95%
GX23110V	S$20,000	3.21%
GX23120Z	S$20,000	3.30%
GX24060A	S$20,000	3.26%
GX24070S	S$20,000	3.26%
GX24080W	S$20,000	3.19%

Portfolio Value = S$129,000

Speculative Play

Security	# shares	Price US$
Kep Pacific Oak REIT	70,000	0.22

Portfolio Value = US$15,400

Trades
None


Commentary:

Another month has swiftly passed us by.

I did not make any trade as my target prices were not hit.  The local Straits Times Index climbed 5.07 percent, particularly at the start of the month, buoyed by the positive mood in the U.S. stock market.  The S&P 500 Index ascended 3.62 percent from an already high base, reaching a lifetime high.

The local bank stocks soared to new heights after reporting stellar Q3 results.  Despite the lower NIM, the banks were able to generate superb performance in wealth management.  DBS announced a share buyback plan, which will likely continue to support its share price.  Short of an abrupt selldown, I doubt I will buy more bank shares in the near term.

Donald Trump is going to step into the White House once more.  The tension between U.S. and China will only escalate further.  With Vladimir Putim deploying new weapons and threatening nuclear options, the Russia-Ukraine war is set to rise to a new level.  In a volatile world, safe haven assets like gold will see more supportive demand.  Bitcoin price is fast approaching the US$100,000 mark.  Breaking above this psychological barrier is a matter of when, not if.

Sheng Siong Group was the next to go from my SRS portfolio.  My SRS cash reserve has grown considerably.  Will be patient for an opportunity to re-deploy the capital.

Remember the Plan I wrote about last month?  It has been put into motion.  I have committed my funds and have been disciplined in the execution.  So far so good.  No major catastrophe.  I am still learning and fine-tuning.  However, at times, I feel a sickening feeling in my stomach.  I wondered why the heck did I embark on this uncharted path?  What if it does not work out at all?  Will I regret?  Questions abound in my head.  Nonetheless, the Plan requires patience and time to bear fruit.  I give myself one year to strive for positive results.  Whether the Plan is a success or a failure, you - my dear readers - will be the first to know!

Home-wise, the PSLE result was released on 20 Nov.  My older boy achieved an aggregate score of 5M (M for Merit in Higher Chinese).  Based on past intake, his score qualifies him to enroll into any Secondary School in Singapore, including Raffles Institution (RI), which is his dream school.  However, as my boy had participated in the DSA-Sec exercise, he is no longer eligible to join the S1 Posting exercise.  Initially, we thought that my boy will be placed in Catholic High School, which had granted him a Confirmed Offer.  To our surprise, my boy gained admission into Hwa Chong Institution (HCI), which had placed my boy on Waitlist.  While my boy did not get into his dream school RI, he was equally elated to join HCI, which had impressed him during the school's Open House.

Additionally, my boy was awarded the Edusave Scholarship for Independent Schools (ESIS) [link].  This means his school fee in HCI will be partially subsidised.  That is $200 less every month, which is quite a substantial amount.  My wallet is so happy.  A brand new chapter awaits!

We have come to the last month of 2024.  I am looking forward to my family's Taiwan trip in early December.  Going to spend eight days in the land of bubble tea and XXL chicken cutlet (yum).

Here's wishing you an early Merry Christmas, my friends!

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Sheng Siong Group FY2023 Earning Result

Sheng Siong Group ("SSG") reported their FY2023 earning result yesterday [here].  Here is a quick dive into the numbers:

Numbers in S$ million unless stated otherwise.

Twelve Months Ending	31 Dec 2023	31 Dec 2022	% Change
Revenue	1,367.72	1,339.46	2.1
Profit Before Tax	163.12	163.08	0.0
Net Profit	134.00	133.64	0.3
EPS (in cents)	8.89	8.87	0.2
DPS (in cents)	6.25	6.22	0.5

Revenue increased to S$1.37B (FY22: S$1.34), up 2.1% y/y, of which 2.5% is due to four new stores opened in 2022.  Sales of comparable stores remained the same.  SSG now operates five stores in China, of which revenue declined 0.1% y/y.  Gross profit margin improved to 30.0% (FY22: 29.4%) due to change in sales mix, offset by rising staff costs (up S$6.6M) and utility expenses (up S$13.8M).  Net profit margin remained steady at 10.1% (FY22: 10.0%).

Management believes escalating costs may compel consumers to adopt cost-cutting measures, such as choosing home-cooked meals, patronising value-driven supermarkets, and opting for more affordable house brand products.  Consumers who previously frequented upscale markets may now pivot towards budget-friendly supermarkets in an effort to manage their expenses.

SSG is expected to open two new stores in Singapore (at 91 Jalan Satu and Blk 471B Yishun Street 42) and one new store in Kunming, China during 2Q 2024.  Nonetheless, management warns that competition remains fierce in the supermarket industry.  Aggressive promotions coupled with higher input costs such as labour and energy expenses put pressure on margins.

SSG declared a final dividend of 3.2 cents per share, up from 3.07 cents per share a year ago.

My Thoughts:
SSG has always been one of my favourite stocks.  The business model is simple to understand; it has a stable (i.e. non-growing) shareholder base; the company heaps in lots of cash and has no debt; the management is disciplined in executing its strategy; and the profit margins have remained healthy through the years.  Best of all, the Board is willing to share the fruit of their success via an increase in dividend.  What's not to like about this company?  (Disclaimer: I shop at Sheng Siong every week.)  I wouldn't mind if the market still shuns this stock, keeping its price afloat around the $1.60 range.  It gives me opportunity to load up more of the shares.  Lots more.

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Portfolio Summary for August 2023

As of 31 August 2023

CDP

Security	# shares	Price S$	%
DBS	400	33.30	3.71
UOB	400	28.44	3.17
OCBC Bank	700	12.55	2.45
SGX	2,700	9.63	7.24
ST Engineering	6,900	3.81	7.32
CapitaLand Investment	7,400	3.24	6.68
SATS	8,200	2.59	5.92
Powermatic Data	8,500	2.80	6.63
TheHourGlass	5,000	1.96	2.73
Micro-Mechanics	14,200	1.89	7.48
VICOM	17,800	1.55	7.69
Sheng Siong	19,100	1.52	8.09
Nanofilm	21,600	1.06	6.38
Genting Singapore	11,700	0.875	2.85
Credit Bureau Asia	14,300	0.925	3.69
HRnetGroup	21,900	0.745	4.55
TalkMed Group	14,500	0.40	1.62
China Sunsine	41,800	0.40	4.66
HC Surgical	35,500	0.36	3.56
Kimly	27,000	0.32	2.41
Silverlake Axis	15,000	0.285	1.19

Portfolio Market Value = $358,937
YTD Dividends Received = $10,229
YTD SBL Fees Received = $801

Trades
- Bought 6,200 shares of Nanofilm.
- Bought 3,800 shares of VICOM.
- Bought 6,100 shares of Sheng Siong.

SRS

Security	# shares	Price S$	%
DBS	100	33.30	2.52
UOB	200	28.44	4.30
OCBC Bank	900	12.55	8.54
SGX	1,300	9.63	9.46
ST Engineering	3,000	3.81	8.64
CapitaLand Investment	2,600	3.24	6.37
SATS	3,800	2.59	7.44
Powermatic Data	3,400	2.80	7.19
Micro-Mechanics	5,400	1.89	7.71
VICOM	5,500	1.55	6.44
Sheng Siong	8,700	1.52	9.99
Nanofilm	5,500	1.06	4.41
Credit Bureau Asia	5,700	0.925	3.98
TalkMed Group	5,800	0.40	1.75
China Sunsine	10,800	0.40	3.26
HC Surgical	19,500	0.36	5.30
Kimly	5,800	0.32	1.40
Silverlake Axis	6,000	0.285	1.29

Portfolio Market Value = $132,332

Trades
None

Singapore Savings Bonds

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

Portfolio Market Value = $41,500

Commentary:

I enjoyed August. My family celebrated three birthdays; term tests are over for my kiddos and I took a handful of leave days to get away from work. I was able to take things down a notch and recharge my spirit.

Investments-wise, nothing major happened in my portfolios. As the price of Nanofilm sunk to an all-time low, I took another bite. I find this company to be a good indicator of China's manufacturing industry right now, which isn't performing well. Nonetheless, I'm confident the company fundamentals are still intact. Growth will resume once China is able to revitalize its production-led economy.

I also picked up Vicom and Sheng Siong as their stock prices retreated. I'm eyeing the local banks too. Their prices have steadily declined, despite having achieved stellar Q3 results. Once they hit my entry point, I will accumulate. The banks are the strongest candidates to raise their dividends.

Speaking of banks, I came across a good article in the Business Times titled "Bank customers lose out as industry holds on to rate-hike gains" [link]. Banks do not always pass on the interest rate hikes to savers. That is why there is NIM expansion. IMO, it is better to be both a saver and a bank stockholder.

The year-to-date dividend income from my CDP portfolio has crossed $10k. While it isn't a lot of money (when you average it out per month), I had saved my hard-earned money and invested instead of splurging on stuff. It is the fruit of my frugality. I sincerely hope my dividend income stream will continue to grow over the years.

As mentioned previously, I'm in the midst of adjusting my investment focus. I want to ditch the lower ROE stocks in favour of the few stronger companies. But at present, I don't see an urgent need to sell off those holdings when prices are going nowhere. Moreover, I have sufficient dry powder (cash) to add on positions when a buying opportunity appears. So I'm adopting a wait-and-see attitude. Akan datang.

We are already three quarters into 2023. After spending eight years in my current job, I've decided to apply for a Sales role in another department. The skill set required is way out of my comfort zone. Yet, there is the thrill of embarking on a new challenge and stretching my capabilities further. It has been a long time since I last attended an interview. I sought advice from my former colleagues who are now in Sales. I'm glad to see them enjoying the job and thriving. I hope to follow in their footsteps. I've pored over YouTube videos on Sales interview tips and tricks, so that I can be prepared. I have told myself - Even if I do not get the job, at least I've done my best and benefited from the learning experience. No regrets.

Wish me luck!

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Portfolio Summary for September 2021

As of 30 September 2021

CDP

Security	# shares	Price S$	%
DBS	700	30.32	7.60
OCBC Bank	1,500	11.50	6.17
SGX	1,200	9.98	4.29
SATS	3,900	4.16	5.81
ST Engineering	4,100	3.81	5.59
CapitaLand Invest	5,400	3.40	6.57
Singtel	6,100	2.46	5.37
Powermatic Data	5,000	2.90	5.19
Micro-Mechanics	1,300	3.21	1.49
ComfortDelGro	7,900	1.51	4.27
Sheng Siong	13,000	1.48	6.89
Genting Singapore	11,700	0.72	3.01
TheHourGlass	15,400	1.56	8.60
HRnetGroup	21,900	0.77	6.03
China Sunsine	31,000	0.495	5.49
HC Surgical	35,500	0.55	6.99
Silverlake Axis	60,800	0.295	6.42
Kimly	27,000	0.375	3.62
CL Int Com Trust	835	2.03	0.61

Portfolio Value = $279,440

Trade Actions
- Bought 3,400 shares of Sheng Siong Group.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.50	14.03
SGX	1,300	9.98	17.59
SATS	2,200	4.16	12.41
ST Engineering	1,700	3.81	8.78
Singtel	2,000	2.46	6.67
Sheng Siong	8,700	1.48	17.46
HC Surgical	19,500	0.55	14.54
Silverlake Axis	21,300	0.295	8.52

Portfolio Value = $73,758

Trade Actions
- None

Commentary:

Will keep it short. I did only one trade, adding my position in Sheng Siong Group as the price floated lower. September also witnessed the birth of CapitaLand Investment Management, which was rated a 'Buy' by several brokerages, leading to its price shooting higher over the past week. SATS also received a positive boost, as the United States laid out its plan to relax border restrictions for vaccinated travellers [news].

Heading into October, I see little stimulus for stock prices to continue its climb. I'm keeping hope that we are due for a price correction soon, so that suitable buying opportunities will appear. We shall see.

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Portfolio Summary for June 2021

As of 30 June 2021

CDP

Security	# shares	Price S$	%
DBS	700	29.81	7.64
OCBC Bank	1,500	11.95	6.56
SGX	1,200	11.18	4.91
SATS	3,900	3.93	5.61
ST Engineering	4,100	3.87	5.81
CapitaLand	5,400	3.71	7.33
Singtel	6,100	2.29	5.11
Powermatic Data	5,000	3.20	5.85
Micro-Mechanics	1,300	3.12	1.48
ComfortDelGro	7,900	1.64	4.74
Sheng Siong	9,600	1.58	5.55
Genting Singapore	11,700	0.835	3.57
TheHourGlass	15,400	1.58	8.90
HRnetGroup	21,900	0.69	5.53
China Sunsine	31,000	0.515	5.84
HC Surgical	35,500	0.495	6.43
Silverlake Axis	60,800	0.235	5.23
Kimly	27,000	0.395	3.90

Portfolio Value = $273,288

Trade Actions
- Bought 3,200 shares of Sheng Siong Group.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	11.95	14.63
SGX	1,300	11.18	19.77
SATS	2,200	3.93	11.76
ST Engineering	1,700	3.87	8.95
Singtel	2,000	2.29	6.23
Sheng Siong	8,700	1.58	18.70
HC Surgical	19,500	0.495	13.13
Silverlake Axis	21,300	0.235	6.81

Portfolio Value = $73,498

Trade Actions
- None

Commentary:

The local market has been trading in a range for the month of June. However, this is still higher than my preferred entry level, hence I did not execute many trades. I did add more Sheng Siong shares to my CDP portfolio when the price retreated from the spike last month. There is a jubilant mood among investors as the economy recovers. Many believe interest rates will remain low till next year, despite 'transient' signs of inflation.

It has been eighteen months since the COVID-19 coronavirus first struck. How things have changed. I have been working from home for more than a year. My grocery shopping is now done in the wee hours of the morning, so as to avoid crowds. And my kids are getting competent in navigating the Internet, doing Google searches, attending Zoom meetings and submitting scanned written homework online. While I miss traveling, I have used my free time to pick up Bahasa Melayu and watch video documentaries.

How has life changed for you?

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Portfolio Summary for February 2021

As of 27 February 2021

CDP

Security	# shares	Price S$	%
DBS	700	26.64	7.64
OCBC Bank	1,500	10.99	6.75
SGX	1,200	9.99	4.91
SATS	3,900	4.40	7.03
ST Engineering	4,100	3.76	6.32
CapitaLand	5,400	3.18	7.04
Singtel	6,100	2.35	5.87
Powermatic Data	5,000	2.70	5.53
Micro-Mechanics	1,300	3.07	1.64
ComfortDelGro	7,900	1.61	5.21
Sheng Siong	6,400	1.56	4.09
Genting Singapore	11,700	0.855	4.10
TheHourGlass	15,400	0.88	5.55
HRnetGroup	21,900	0.56	5.03
China Sunsine	31,000	0.485	6.16
HC Surgical	35,500	0.425	6.18
Nam Lee Metal	28,200	0.315	3.64
Silverlake Axis	40,000	0.24	3.93
Kimly	27,000	0.305	3.37

Portfolio Value = $244,058

Trade Actions
- Bought 3,200 shares of Sheng Siong Group.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	10.99	15.10
SGX	1,300	9.99	19.82
SATS	2,200	4.40	14.78
ST Engineering	1,700	3.76	9.76
Singtel	2,000	2.35	7.17
Sheng Siong	8,700	1.56	20.72
HC Surgical	19,500	0.425	12.65

Portfolio Value = $65,510

Trade Actions
- None

Commentary:

The Lunar New Year came and went just as fast. I usually think the year (i.e. hard slog) begins when the CNY festivities are over. Nonetheless, February is a good month as that is when my performance bonus comes in, and it was much better than expected this time. I am thankful my boss appreciates my contribution over the past year. However, for the new workyear, I am given a challenging client account to service. I can only see hardship down the road. (Sigh.)

Investments wise, I only added one position in February. Sheng Siong Group reported stellar FY2020 performance as the supermarket operator clocked higher sales, partly due to COVID-19 lockdown and Work From Home while maintaining healthy gross margins. I'm happy that the Board decided to distribute a higher DPS (3 cents). Together with the previous DPS (3.5 cents), this translates to a trailing-12-months dividend yield of 4.2 per cent based on current price. This is a satisfactory level to me, and I decided to add to my position.

Looking forward, I doubt there is any more impetus for the market to rally higher, so we will likely see the market hover around these price levels. Current Street talk is about the ongoing COVID-19 vaccination in Singapore, but I have my reservations that this event will make any difference in the near term. Many countries are still reeling from 2nd, 3rd and Nth wave of infections, so it may take a few more years before normality resumes. Perhaps the old normal is no longer coming back. Companies that are cash strapped, debt laden, with outdated business models and unable to adapt will face tough times ahead.

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Portfolio Summary for November 2020

As of 30 November 2020

CDP

Security	# shares	Price S$	%
DBS	700	25.20	7.66
OCBC Bank	1,500	10.08	6.57
SGX	1,200	8.89	4.64
SATS	3,900	4.14	7.02
ST Engineering	4,100	3.86	6.88
CapitaLand	5,400	3.13	7.34
Singtel	6,100	2.39	6.33
Powermatic Data	5,000	2.41	5.24
Micro-Mechanics	1,300	2.68	1.51
ComfortDelGro	7,900	1.65	5.66
Sheng Siong	3,200	1.56	2.17
Genting Singapore	11,700	0.83	4.22
TheHourGlass	15,400	0.765	5.12
HRnetGroup	21,900	0.495	4.71
China Sunsine	31,000	0.505	6.80
HC Surgical	35,500	0.39	6.02
Nam Lee Metal	28,200	0.33	4.04
Silverlake Axis	40,000	0.265	4.61
Kimly	27,000	0.295	3.46

Portfolio Value = $230,146

Trade Actions
- Bought 2,200 shares of Powermatic Data Systems.
- Bought 3,100 shares of Sheng Siong Group.

SRS

Security	# shares	Price S$	%
OCBC Bank	900	10.08	13.10
SGX	1,300	8.89	16.69
SATS	2,200	4.14	13.15
ST Engineering	1,700	3.86	9.48
Singtel	2,000	2.39	6.90
CapLand IntCom Trust	3,600	1.94	10.09
Sheng Siong	8,700	1.56	19.60
HC Surgical	19,500	0.39	10.98

Portfolio Value = $69,240

Trade Actions
- None

Commentary:

The stock market has regained its mojo and is heading higher than ever. The DJIA broke the historic 30,000 barrier, though it failed to hold the ground. Opportunities to buy stocks at cheap prices are getting rarer. On the other hand, the bears who tried to fade the rally must be having panic attacks and nursing their wounds now - A Bloomberg article remarked sellers suffered a sizeable US$163 billion loss from shorting the S&P 500 Index for the month of November [link].

While hard to believe, tourism-dependent Genting Singapore caught many by surprise as it reported a much better than anticipated Q3 result after a catastrophic Q2. Its stock price soared on the news. The buoyant mood is simultaneously bolstered by recurring news of positive vaccine trial outcomes. SATS saw its price rose after it revealed it was capable to handle the extremely cold storage required by the vaccine [link].

I was lucky to acquire an additional position in Powermatic Data Systems at the start of the month, before its Return of Capital event. I had betted on the corporate action price gap to narrow after the Ex Date, which it did. Hence on a net basis, I am sitting on a small paper gain.

I also initiated an inaugural position in Sheng Siong Group for my CDP portfolio when the price retreated. The supermarket operator had benefited significantly from the Circuit Breaker, but some investors expect the superb performance not to last. As Singapore enters Phase 3, less people may choose to cook and eat at home. In my opinion, Sheng Siong's management has demonstrated discipline in watching the bottom line while cautiously expanding its turf. So I'm happy to hold this stock for the long term. (I shop at Sheng Siong regularly, so it is satisfying to know a small part of my grocery expense is compensated in the form of dividends.)

We have finally entered the last month of the year. Christmas is approaching, though I doubt the festive spirit will be strong under the shadow of the virus. The world is still reeling from the effect of COVID-19, and most of us should be spending our annual leave stuck on this island. The SingapoRediscovers vouchers are a nice touch by the government to encourage domestic tourism. I am eager to utilize the vouchers to visit some attractions.

December is truly the 'season of giving' for me, as my kiddos' endowment policy premiums come due. This is the second last payment out of a five-year premium plan. It is always a heart ache to see a five-figure sum whisked away from my bank account in an instant. But my wife and I had wanted assurance that we have sufficient funds to cover our two kids' university education. So the money vested now is for a good cause in the future. Moreover, the ROI of the endowment policies is reasonably attractive in today's environment of ultra-low interest rates. So I have no regret.

Lastly, I will be topping up my CPF Retirement Sum to take advantage of the higher CPF interest rate, as well as the available income tax rebate. It is an annual ritual for me. Are you planning to do the same?

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Trade Action - Sheng Siong Group

A week ago, I initiated a stake in local supermarket retailer Sheng Siong Group (SSG) for my SRS equity portfolio.   I have been lazy to pen down my reasoning for this investment, but here it is at last.  This post summarizes my thoughts about investing in this company.

Pros for investing:

One of top three Singapore supermarket retailers
Sheng Siong Group is one of Singapore's top three supermarket retailers, according to a 2018 report (link) by the USDA (yes, the United States Department of Agriculture).  The other two are NTUC Fairprice Co-operative and Dairy Farm International Holdings, who owns Cold Storage, Giant and Market Place.  According to a chart by Maybank Kim Eng (link), Sheng Siong Group is the one of two retailers - the other being NTUC Fairprice - who has been consistently growing their market share over the past five years, from 16.9% in 2012 to 18.9% in 2017.  From a humble store in 1985, Sheng Siong Group now owns 54 stores across the Singapore heartland, with a retail space of nearly 500,000 square feet in 2018.

Operational discipline
Of course, aggressive growth without operational discipline is unsustainable over the long run.  This does not seem reflective for Sheng Siong Group.  In 2018, the company opened ten new stores, but saw two store closures as the buildings occupied were taken back by its owners for redevelopment.  SSG management is mindful to segregate new store sales versus same store sales, so that they can track each revenue growth carefully.  In its FY2018 report, SSG management astutely observed, "since the beginning of 2019, six HDB shops which were won by the competitors via online bidding in 2017 and 2018 are now vacant and have been released for re-tender."  Learning from your competitors' missteps is telltale sign of a sound management team.  SSG management is also focused on growing their fresh produce sales mix, which commands higher margins.  (That gets another score from me.)

Zero debt, stable equity base
For a company that operates a brick and mortar business, this company has ZERO DEBT.  Not even an auto loan for its delivery trucks.  Would you believe it?  Moreover, the shareholding base has been stable for the past few years.  No hanky panky stock options for management, no complex convertible instruments and definitely no need to reach out to its owners for more money now.

Healthy company fundamentals
Increasing market share (positive YoY revenue growth over past five years)
Healthy gross margin (26.8% in FY2018)
Zero debt (I can't emphasize it more)
Stable shareholding base (ditto)

Cons against investing:

Competitive retail landscape
When one is grabbing market share, you can be sure the peers will not be resting idle either.  There have been young upstarts (U Stars) and the rise of niche organic grocers, catering to health conscious Singaporean shoppers.  Moreover, traditional brick and mortar retailers face a perennial challenge from online retailers (RedMart, Honestbee).  Even market leader NTUC Fairprice Co-operative had recently revamped its e-commerce platform (Fairprice On) to fend off the challengers.  I have not seen SSG management take a serious stab at growing grocery sales on the web.  Perhaps the threat is not that serious...yet.

Price premium
Sheng Siong Group is covered by a few sellside brokers and is well researched by the market.  At the current price of $1.04, you will be paying a hefty 500% premium over NAV (19.30 cents).  This is not your typical hidden gem, but a polished jewel at the store front.  Per Buffett speak, would you be willing to pay a fair price for a good company?

China foray
Many local companies seem fixated with China as the ultimate sales nirvana, and Sheng Siong Group is no exception.  In November 2017, SSG opened its first overseas store in Kunming.  It recorded a loss of $0.7 million in FY2018.  In January this year, SSG entered into a lease agreement for a second store, expecting it to be operational in 3Q2019.  The road to China supermarket supremacy is laden with battle wounded foreign retailers (Wal-Mart, Carrefour, Tesco), and even dead carcass (Lotte Mart).  Hope SSG management has been copiously taking notes to avoid the pitfalls and potholes.  Understanding and localizing the sales mix will be key to survive - let alone thrive - on this land.

Final Thoughts

In May 2018, a value fund manager Mondrian Investment Partners bought 99,000,000 shares from Sheng Siong Group founders at $1.01 per share (link).  I have been watching the stock tussle at $1.08 for some time.  When it came within striking distance of my ideal price, I pulled the trigger.  I will surely load up if the stock price falls further to the dollar mark.  Now I have another reason to shop more at my neighbourhood Sheng Siong supermarket.

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Portfolio Summary for March 2019

As of 31 March 2019

Cash Equity

Security	# Shares
OCBC	900
Old Chang Kee	100
AIMS AMP Capital Industrial REIT	2,150

Portfolio Market Value = $13,132

SRS Equity

Security	# Shares
Sheng Siong Group	8,700
Frasers Centrepoint Trust	3,000
Keppel Corp	1,000
SingTel	2,000
CapitaCommercial Trust	3,000
SembCorp Industries	2,000
Frasers Commercial Trust	2,408

Portfolio Market Value = $42,932

March is another happy month for me. My company's long term incentive plan finally came to fruition, and I received a small sum as reward. Just in time to bolster my war chest for investment.

The market is rolling along nicely, even when US and China haven't agreed on a trade deal. Recent talk of the town was about the US Treasury yield curve inversion, though it didn't last very long. An inversion is said to be the harbinger of a recession. Looking at the mood in the market, a recession seems to be the last thing on people's mind. As we head into another earnings season, Wall Street is betting the US Fed will cut interest rates this year. Hard to see any justification for the Fed to do so in the near horizon.

Trade Actions

OCBC
I bought 900 shares of local bank OCBC for my cash equity portfolio at $11.06 per share . I have written out my reasoning in a previous blog post here.

Sheng Siong Group
I bought 8,700 shares of supermarket retailer Sheng Siong Group for my SRS equity portfolio at $1.05 per share. I've yet to pen down my thoughts for this investment. Will try to do so soon.

Dividends

There is no dividend event for my holdings this month.

Savings

The April 2019 Singapore Savings Bond (SSB) offered an average yield of 2.16% p.a., which is unappetizing to me. Granted, it is still better than most fixed deposit promotions out there. But I'm not going for it.

Looking Ahead

This week marks the start of the Qing Ming Festival, where Chinese folks will make their way to pay their respects to the deceased. It has been three months since my dad passed away, and I still think of him from time to time. Sombre mood aside, I'll be ready to pounce on any buying opportunity when earnings season (hunting season?) starts.

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