Saturday, January 31, 2015

3 Movies that caught my attention during my en-route flights from HK to SG

I went to HK last Wednesday to settle some personal matters which needed my attention, stayed there for 2 nights and returned back to Singapore yesterday night. I took an SQ flight this time because I thought the price was pretty reasonable (not sure if it's related to the oil falls) as compared to the more budget airline.

I really enjoyed flight when there are movies to watch because I am a pretty crazy movie go-ers before my son was born and now that we had literally no available leisure time with a kid on the sideline, we have not been to movies for a very long time and that scarred me a little. Just kidding.

Anyway, when I boarded the plane, the first thing I did was to quickly browse through the krisflyer movies programme to check out what movies they were offering on the screen. I had a few choices of either choosing movies or some bbc commentaries either regarding the past financial crisis or the history of oil crude and I thought heck I'll freed up my mind this time and not think about the economy for once.

The thing about my love-hate relationship with movies is that even though I like to explore random genre of movies, I hate it when they do not meet my expectation or if the plot is too predictable to watch. I feel they are a waste of time to watch and I could have better used the time (or money) to do other things. I like plots that keeps my mind guessing on the go, a twist in the storyline or an incredible wow factor that maybe blows out my mind completely. I think the director who made that would deserve a lot of respect.

In any case, these are the 3 movies that I have watched on both my return flight from SG to HK and HK to SG which I thought was pretty good and met my expectations:

1.) Gone Girl



Story Synopsis: 

On the occasion of his fifth wedding anniversary, Nick Dunne  reports that his wife, Amy, has gone missing. Under pressure from the police and a growing media frenzy, Nick's portrait of a blissful union begins to crumble. Soon his lies, deceits and strange behavior have everyone asking the same dark question: Did Nick Dunne kill his wife?

B's thoughts after watching:

I don't think you would go wrong with a Ben Affleck's movie.

Every time I watched him on the screen, it's a top rated movie with very deep plots in the storyline. This was another story with very good plots, unimaginable twist and keeps you guessing till the very end. I would definitely recommend it to anyone who likes this genre type of movies.

Rating: 9/10


2.) Tazza: The High Rollers 2




Story Synopsis: 

Dae-Gil is a local town hustler who cheated his way through every gambling game until he was being cheated himself one day which brought about serious circumstances. He then plots a big game changer to take revenge on those that has cheated him.

B's thoughts after watching:

I don't usually watch Korean movies all too often because I thought they were somewhat cliche but I enjoyed this movie as they are intensely yet fun-lovingly filled with emotions when it comes to gambling. This goes to show that in a gambling game, you simply can't trust anyone and money is the ultimate winner. The main actor from Big Bang should also attract some of the crowds into watching the movie. Good movie for those who like gambling or casino related game.

Rating: 7.5/10


3.) Obsessed





Story Synopsis: 

This was a story that happened back in 1969 in the military camp in S.Korea when a colonel, who is married, falls in love with the wife of his subordinate and become obsessed with it. As he began to choose between love and loyalty, he struggled to find the answer and commit the biggest mistake of his life.

B's thoughts after watching:

I thought this was a very emotional and thought provoking movies which places way more importance than the general cliche love story we always hear in Korean dramas. The question here is about Forbidden Love and how much are you willing to sacrifice for your love versus loyalty. Great ending and plots though some may find a little slow to their liking, but I think it'll grow on watching. Do note that this is an adult rated movie so there are some parts which you may be uncomfortable about.

Rating: 9/10

It's a weekend. Sit back, relax and enjoy some other activities. There are certainly a lot more life than just investing in general.

What about you? Any very good movies recently you have watched that deserve a recommendation?

Monday, January 26, 2015

Recent Action - Ascott Reit

I manage to divest all my 15 lots of Ascott Reit today at a price of $1.31.




This has been a very good performing counters for years and gave me a very decent capital and dividend gains. Thank you Ascott. However, given the recent run-up for Reits in general and the reason why I would like to divest in this Reit which I have explained in detail here, I decided to let it go. This also means that I will not be getting the dividends in the month of February which they have announced at around $0.042/share for the 6 months.

There are really nothing much to add for the reason for my divestment other than the fact that their dividends have been somewhat at par and not increasing while their asset base grows and there is a high likelihood that you will be forced to participate in the rights issue to avoid dilution. The dividends at current price still remain at around 6.4% yield so it's still overall very decent, though the cost of borrowings is at 3% and the distribution represents a full 100% payout.

The recent run-up in Reits is very much akin to the great 2013 run where the yield spread with the risk free rate has tightened. I think it's a very good chance at this time to divest the weaker Reits you have in your portfolio and restructure the portfolio. If you are those with very little cash holdings, this could perhaps be a good time to divest some of the holdings, realized the capital gains and hold the cash as a potential warchest for future opportunity.

With this divestment, my only Reits holdings in the portfolio is left with Fraser Centerpoint Trust (FCT), Fraser Commercial Trust (FCOT) and Mapletree Greater Commercial Trust (MGCCT), which I thought represents a very strong case why they deserve to be there more than the others.

This is just a quick update and I will update my portfolio soon. Thanks for reading.

Any divestment for you so far? What do you think of the recent Reits run-up?


Sunday, January 25, 2015

3 Dining Restaurants I Recommend For Extreme Value

If you have been following my blog for quite a while, you would know that I spend a whole load of money on dining in general and they can add up quite a bit at the end of the month. On average, I usually spend about $100-$150/week on weekends just on dining alone. Add those groceries which we have bought for the weekdays and this amount does add up substantially.

For some reason, Our family has a habit of going out during the weekends. This includes the bigger family of both my parents and brother on top of my wife and son, so we are talking about 5 to 6 people each time. Because we frequent the hawkers or food courts pretty often during the weekdays, we tried to avoid the same during the weekends.

After frequenting so many dining places during the past couple of years, I have been to most of the restaurants within the radius near my staying area. Because of the inconvenience to bring my toddler out with no private car and a crowd larger than what a single taxi can fit in, we usually ended up going to malls that are rather near the central area.

It is actually pretty difficult to find meals at value price at these malls as you would have probably known how crazy Reits these days at working their efficiency in increasing their rents every year. However, I will bring you my top 3 favorite dining places which I think is undervalued and they are my personal recommendation for extreme value (both price and quality).

1.) Shi Li Fang





This is a Taiwanese steamboat restaurant with a rather unique set-up in a way that you get to cook the dishes in your individual steam pot. The lunch set is priced at $9.90 and you get to choose two different soup base which taste extremely delicious. The portion is rather good for an individual and if anytime you need more, the meat dishes (beef/chicken/fish) are at a 50% discount top-up ala carte.

Do note that the $9.90 set includes the drink and rice as well, hence they are very worth in my opinion.

I often frequent the place on the one at Orchard Central though I understand they have a couple more branches at Icon Village, etc.

2.) Yayoiken





This is a Japanese cuisine restaurants which you can find in a number of shopping malls.

A few of the lunch set there is priced in at $9.90, which includes a salad, miso soup, side dishes and the main meal. The rice served there is also authentic japanese rice, which you can top up unlimited flow as much as you want.

The food is really decent and for that price these days it's rather uncommon seen in a restaurant.

3.) Imperial Treasure - Noodle & Congee House





This is a typical simple Chinese meal where you get very delicious cuisine at a very affordable pricing.

On top of that, the quality of the food is top notch and the Imperial Treasure brand doesn't disappoint. Value meal to bring the elderly in your family.

Final Thoughts

I am probably not your everyday advocates of value meals.

I enjoy the company of great food and ambience with frequent family gathering and I put that as part of my lifestyle expansion as my income grows to a more comfortable level. Nevertheless, I usually try to find meals that are more affordable unless it's a special occassion like wedding anniversary or birthday where I tend to spend more.

I am not turning into a food gourment either like ladyironchef so you might not have liked the above I recommend. Just take it with a pinch of salt, just like anything else :)

What about you? Any dining recommendation that you think is value?

Thursday, January 22, 2015

Recent Action - OUE Limited

I am pretty sure that I am going to receive quite a bit of backlash after this post following some unsightly comments from the hardwarezone forum for my decision to divest AHT two weeks ago. Regardless, I will try to be as transparent as possible and hope readers do their own diligence before deciding to invest their hard earned money. This is one of those evidence that if you don't do your own diligence and simply follow other bloggers purchase, the situation may not turn out to be great.


Today, I made the decision to divest all my 5 lots of OUE Ltd at a price of $2.22. Given that I had purchased them last September at a price of $2.16, this represents a minor gain of $0.06/lot, which translates into a total gain of $300 in absolute amount. I suspect the reason for the increase is due to the latest Keppel Land announcement which Keppel Corp has offered to purchase at a premium. This boosted the whole property related counters which are currently traded at a discount. Having said that, OUE isn't any of your Keppel Land or Capitalmall Asia and I seriously doubt the big boss up there is willing to privatize this asset generating machine.

I have blogged a few times last year after my purchase on OUE and you can view them here below for those who are interested:


Rationale for divesting

My thesis for the strength of this company is still the same as before. I think the company is currently trading at an undemanding book valuation of around 0.53, which is almost half what their liquidation value is right now. The earnings though are a little weak so this Iis very much more an asset play than anything else.

However, there are a couple of things which makes me think deeper:

1.) Confirmation of divestment of Crowne Plaza Changi Airport & Extension

When I purchased the company back then, I was playing a little guessing game about the potential divestment of the abovementioned assets. When news about the confirmation was announced, the market doesn't seem to take into that positively. This is in conjunction with the previous divestment when they injected their two Reits properties arm OUE Hospitality and OUE Commercial Trust and the share price slumped down heavily. This is just something I don't really understand. Is there something behind the curtain that retail investors does not really know?

2.) Guaranteed Income Support

The above reason could perhaps be attributed to this income support cause. Given that the management chose to aggressively inject their properties into the Reits arm without any stabilization, they are able to recycle capital quickly but chose to provide guarantee income support to these Reits as a result. As an investor, I am not sure if that is the best option to do because some of these capitals are not being recycled to obtain a higher required rate of return.

3.) Aggressive Venturing

If you read about the background of the Riady family, they are almost into all the businesses you can think of. Properties, retail, hospitality, food and beverages, logistics, recreation are all part of their diversified business. This is not necessarily a bad thing per se, but you can see how the risk has increased because of this. Imagine if there were recession and their capital is stuck in any of these businesses. Further, we look at the Return on Equity over the past few years and they do not really impress.

4.) No Share Buyback

I remain baffled why the company did not step up to stabilize things when the share price is weak by doing things such as share buyback to give investors a vote of confidence. Instead, what they have done is to use their capital to some mutual funds which yield at about 3% after inflation. I'm not sure if the management see that is more value or is the undemanding valuation of their current share price is more value. The action doesn't seem to justify some of the reasoning in my head.


Final Thoughts

It's always easy to put the blame on others when things doesn't go in your favor but difficult to concede that it's your own mistake through our own personal reflection. Again, I wanted to highlight the risk of following a blogger's pick on stocks when you do not do your own due diligence.

Thankfully, this is a situation where I managed to get out unscathed because of the optimistic nature of the property related market today due to Keppel Land privatization.
As mentioned above, I feel that this a case where I may have overlooked some of the key important items and the lack of having further due diligence in knowing more about the management style and history. I have taken a step up by recognizing my own mistake without doing enough when I purchased the company.

This does not mean that the fundamentals of the company is bad. But some of the things and actions at the moment left a few question marks in my head which I do not really understand and because of this I do not feel very comfortable investing in something I am not entirely sure of. This may seem like a quick trade in and out but I rather be at a situation out right now. As it is looking right now, I may already be regretting my action.

I may be vested back in this company some time in the future, regardless if the share price is higher than now, once I have understood the whole situation much better. But until then, I rather focus in companies I know much better.

What about you? Anyone been in this situation before?

AGM - Fraser Commercial Trust (FCOT)

It's been quite a while since I've last been to AGM which I think was for FCT last year during around the same time. The venue was the same at Alexandra Point which seemed very familiar to me by now. The AGM started at 10am in the morning, and I made my way slowly there taking mrt and walking breezily from the Labrador station.

This is one of the better AGM I have been to because the question and answer was honest, direct and related. There isn't quite any silly questions you would listen when you attend to the other AGM. I will be summarizing the whole AGM incident to those who are interested so here we go.





Q&A

The first question was asked by none other than myself. I went through the report quite a bit on the past couple of days and there was no really burning questions but I still proceed to ask anyway.

Q: My first question was pertaining to the way they have presented the NPI vs NPI on a cash basis (AR page 26). As you can see the NPI on a cash basis for FY2014 was higher than FY2013 and I found out that this is due to the effects of accounting treatment where they recognized the income on a straight line basis so I went to ask what is it exactly since I find it pretty unique.

A: The CEO responded by saying that they have been reporting this way over the past few quarters as they want to track the NPI on a cashflow basis. What happened was the income was smoothed out by the rental upward revision by recognizing them on a straight line basis so rather than we have a lumpy NPI, this gets smooth out over the quarters.


Q: My next question was pertaining to the AU properties, which makes up 33% of the overall portfolio and subsequent questions from others later were also revolving the AU properties, so I shall just consolidate them at one go. The questions were pertaining to the future projection, cap rates, economy, hedging and acquisition of AU properties.

A: For future projection and economy, the CEO concedes that the market is currently soft, especially for commodities cities and that there may be potential vacancies due to increase in supply in certain areas. However, the management is looking actively for potential acquisition in areas such as Sydney, Melbourne and Brisbane because the NPI yield is extremely attractive and they would make a suitable accretive acquisition. For SG properties, they concede that they are not able to find attractive yield at this point in time.

On hedging, the management have hedged by using the borrowings in AU denominated currency which provides a natural hedge against the currency itself. In other words, if AUD depreciates, the NPI would suffer but they will be offset by a lower interest expense and a realized exchange gain. I thought that was a smart move and is something maybe the AHT management can learn something from.


Q: There were concerns relating to the expiring of the tax concession in Mar 2015 which Mr. Tharman has yet to announce. If the concession is not extended, then Reits which hold foreign properties would not enjoy tax discounts and this will severely impact the underlying income of the DPU.

A: One of the legal person stepped up to confirm that it is indeed a risk and all they can do is to wait for further news. However, the concession would only impact future foreign properties acquisition and not current, so it will not impact the two assets they currently have in their portfolio. To me, I feel this is still a big risk but there are other Reits which may be in more danger, think AHT, LMIRT and Ascott. Woof!!!


Q: There was another person who asked about the potential divestment of the 55 Market Street, which only makes up a very minor portion of the overall portfolio. Is the management intending to divest this and focus on properties which yield higher?

A: The Chairman took this question and confirm that this is in amongst one of their agenda list to do and when the right time comes, they will divest this asset at a right price.


Final Thoughts

I really like everything about FCOT at the moment after going through all the numbers.

I thought the management has taken ample steps to ensure that there will be sufficient earnings step-up visibility that increases shareholder's value over time yet at the same mitigate the risk by doing things like refinancing all loans requirements till FY2017 and hedging currency risk appropriately, etc.

Moving forward over the next 2-3 years, it is unlikely that we will see any big activity movement as the step up rental play will still be sufficient to drive the earnings and DPU upward. In fact, I like that the management has plans to focus on organic growth through asset enhancement rather than acquisition, which most other Reits do through raising funds and buy.

The below graph says it all about their future plans. Sufficient step-up rents, no refinancing of loans until FY2017 and average cost of debt at 2.7%.



At current price, it may seem a little overstretched but this is definitely a keep for me for the next few years. They will be announcing their Q1 FY15 results shortly. You can bet that earnings and DPU will keep going up on that.

I am still thinking of whether to go for tomorrow FCT AGM at the same place. If I do, I'll do a summary like the one I did here. The food there was well organized as well. I managed to eat a free lunch today :)

Thanks for reading and cheers to those vested as I am.

Tuesday, January 20, 2015

"Jan 15" - SG Transactions & Portfolio Update"

 No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
FraserCenter Point Trust
30,000
2.01
60,300.00
21.0%
2.
China Merchant Pacific
47,000
0.98
46,060.00
16.0%
3.
SembCorp Ind
9,000
4.19
37,710.00
13.0%
4.
Vicom
6,000
6.30
37,800.00
13.0%
5.
Ascott Reit
15,000
1.29
19,350.00
7.0%
6.
Mapletree Greater China Commercial Trust
20,000
0.98
19,600.00
7.0%
7.
FraserCommercial Trust
11,000
1.42
15,620.00
6.0%
8.
Neratel
20,000
0.78
15,600.00
6.0%
9.
ST Engineering
4,000
3.37
13,480.00
5.0%
10.
OUE Ltd
5,000
2.03
10,150.00
4.0%
11.
Stamford Land
10,000
0.54
  5,400.00
2.0%
12.
King Wan
5,000
0.30
  1,500.00
1.0%

Total SGD


282,570.00
 100.00%

Before I began my first portfolio update for the new year, I have made some changes to the layout from the number of lots to the number of shares as SGX has changed the allocation recently to 100 shares. It's just less confusing if we now state them in number of shares.

There are just a couple of light activities in the first month of the new year as we have already seen some volatility in the market.

This month, I have divested my stake in Ascendas Hospitality Trust (AHT) which I have blogged here.

I have also added a couple more shares for China Merchant Pacific (CMP) when it pulled back slightly to $0.975. The thesis for buying the shares remain the same: Strong Cashflow, sufficient dividend payouts based on diluted earnings and positive contributions from the newly purchased jiurui expressway. I also like the fact that they previously did a private placement at $0.985 as one of the ways to fund the acquisition, which is a couple of percentage points higher than their market price back then. They could of course have issued them at a much lower price and dilute the shareholders more, but even at  $0.985 there are takers easily. The bond convertibles are almost being redeemed at a faster interval now, so we can see a huge drop in finance expenses in the upcoming results. They are expected to retain at least the $0.0425 for their final dividend distributions paid in May.

The portfolio has increased slightly from the previous month of $279,780 to $282,570 this month. A few of the Reits have run up due to the impending results (and dividends) announcement so I am extremely looking forward to receiving the first dividend payments from next month. The estimated annual dividends from the portfolio is $14,668. Still slowly building up my arsenal of dividend payers.




Expenses have been tight, as expected and I am already looking forward to months with bounty dividend payouts to ease off the expenses. I have booked a quick trip to HK by the end of the month to settle some family issues so the expenses for this month will be rocket high again.

How is your portfolio doing for the month of Jan? Already adding into undervalued shares?

Saturday, January 17, 2015

5 Books purchased from Amazon

In one of my resolutions for this year, I have plans to read at least 12 books in a year which translate into a book a month.

Over this weekend, I went to the Amazon to make my first step into purchasing these books and these are books with great reviews recommended by either friends or bloggers that meet my criteria to continue improving on self-reading.

Without further ado, these are the 5 books I purchased.

1.) The Rosie Project
I actually stole this book from LP's list of recommended book in 2014. This is also one of the recommended book of the month of Oct 13 by Amazon.

I love books with a lot of hearty and touching moments and from the quick synopsis I think I might get the best of both.



2.) How to Fail at Almost Everything and Still Win Big

The title says it all about what this book is all about.

In one of his excerpts, the author mentioned about "Systems are for winners". That's exactly what I am currently doing, trying to create a system and win big at the end of the game. When you've got a strategy and system going, you are going to get better productivity that makes money works for you. They may still require you to spend time on it, but the productivity should increase over time.




3.) Security Analysis

For value investors, I don't think this book requires any further introduction.

I've been wanting to pick up this book from a year ago but has always failed to do so. This book is pretty thick and they are more like textbook than leisure reading explaining about value investing and fundamental analysis. I was told that the content was pretty technical so I am definitely looking forward to reading and picking up something from it.




4.) Barbarians At The Gate

This is actually a book that is recommended by my professor during my investment banking module back when I was still taking the MBA.

Barbarians At The Gate is a classic account of the fall of RJR Nabisco, something that happens at the Wall Street that changes the face of corporate banking ever again. Looking forward to reading from it.



5.) Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions

Another very technical book recommended during my MBA time.

This is more to the step by step valuation methodology for a startup and venture capitalist before they move on to the mature stage. It's definitely interesting to see how it differs from the usual valuation method we used for other companies.




Okay, I admit that 5 books might take me forever to read. The fact that I only have time to read when my son goes to bed, or when I was pooing in the toilet makes it even harder to complete them.

But the third and fifth book would probably account for at least 3 normal books and it's definitely not very easy to digest them. I'll be applying that along my investing journey so we'll see if that is going to help out.

I'll take it as a successful goal if I can complete these before the year finishes.

Anyone has thoughts on these books or read them previously?


UA-57154194-1