Author: 10% Per Annum

InnoTek 1H’17 Results Review – Crucial Year Ahead

InnoTek had released their 1H’17 results on 12th August, which you may find here. This is my first results review for InnoTek since my initiation (here). Unfortunately, InnoTek had performed below my expectations and reported disappointing results. Overview   Year-on-Year comparison Source: InnoTek Press Release Revenue for 2Q’17 slid 3.2%. Gross margins was marginally weaker by 1%. Net Profit and earnings per share were both hammered, falling almost 77%. To top if off, 2Q’17 was a quarter of negative cash flow, although InnoTek did generate positive free cash flow of S$0.8M for 1H’17. The decline was driven by lower demand...

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Divested Keong Hong for a 11.2% annualized return

I wrote in early June about my plans to re-balance my portfolio (here). In summary, I had wanted to: 1) Increase cash position to at least 20% of my portfolio 2) Increase percentage of portfolio vested in companies with more resilient demand 3) Increase holdings only in companies with strong balance sheets With my portfolio re-balancing plans in mind, I have divested my holdings in Keong Hong (SGX:5TT) at $0.48 per share to record a respectable 11.2% annualized profits. Together with an increase in savings over the past 2 months, my portfolio cash holdings has now increased from around...

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Sapphire 1H’17 Results – Turnaround Continues

As the saying goes, it never rains but it pours – unfortunately for myself, a few of my holdings had chosen to announce results today just as I am scheduled for a busy weekend. Faced with a list of counters which I would ideally like to look at, I have nonetheless prioritized the review of Sapphire’s results as this will be my first review since establishing a position in this counter (here). Overview   Year-on-Year Comparison   Source: Sapphire’s 1H’17 Financial Statement Despite a 11.8% year-on-year revenue growth, Sapphire’s operating profits had slumped 12.1% over the same period. This...

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Hock Lian Seng 1H’17 Earnings Review

It has been almost 6 months since my last review on Hock Lian Seng (here). Therefore, I thought it was high time to scrutinize their 1H’2017 results release today (here). Boring Results (again) Source: Hock Lian Seng 1H’17 Financial Statement Hock Lian Seng’s results were once again completely in line with my expectations. Hock Lian Seng’s order book had declined from approximately S$950M in February to approximately S$890M, roughly matching the revenue of S$51M. I am unable to account for the supposed S$9M gap definitively as the exact date and value of order book were never announced, but this...

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Global Manufacturing Bull – a PMI review

Stock markets have been scaling new heights around the world and a significant contributor to this ongoing phenomenon has been the global manufacturing resurgence. One way to better assess the momentum of this upswing is through reading of Manufacturing Purchasing Managers’ Index (PMI). What is PMI? PMI is essentially an economic indicator derived from monthly surveys of private sector companies. The surveys are based on major indicators such as new orders, inventory levels, production, supplier deliveries and the employment level. A PMI of more than 50 represents expansion of the manufacturing sector when compared to the previous month. Naturally,...

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Book Review: 5 takeaways from Howard Marks’ The Most Important Thing Illuminated

    About the Author: Howard Marks is co-founder and co-chairman of Oaktree Capital Management, a market leading investment firm that first made its name investing in distressed debt. Oaktree’s defensive strategy had proven tremendously successful over the long run. It had beaten the market handsomely over the course of its history, resulting in growth in assets under management from US$5 billion in 1995 to US$100 billion today. About the book: The Most Important Thing Illuminated discusses 20 important considerations that Marks believe to be essential for successful investors. It is an insightful book which offers qualitative advice to...

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Take Analyst Reports with a Pinch of Salt

I have always maintained that analyst reports are important references for investors. They contain critical information that the average investor would not have access to, such as results from site visits and insights derived from management interactions. However, for all the value that an investor can derive from analyst reports, I recommend to take them with a pinch of salt. While analysts are indeed professionals, that does not preclude them from mistakes. Occasionally, analysts might even be guilty of severe conflict of interests (as NRA Capital showed with 1MDB here). I will use Japfa as an example to illustrate...

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Value Investing – learning from OKP’s flyover collapse

Who is OKP? OKP Holdings Limited is a company listed on Singapore Exchange. While the company also dabbles with property development and investments, their primary business remains public sector infrastructure construction and civil engineering. How has OKP performed?   Source: Yahoo Finance   OKP’s share price has performed admirably in the past 2 years, surging 126% from S$0.19 to S$0.43 before the fall in share price after the incident. Indeed, the investment thesis for OKP was rather straightforward. Singapore’s infrastructure demands are growing steadily and firms that win tender do not have to worry about receivables. When we consider...

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7 reasons why HRnetgroup is on my watchlist

HRnetgroup is a recent IPO on the Singapore Exchange which officially begun trading on June 16. Since then, their share price had faced unrelenting downward pressure. Despite repeated purchases by the Stabilising Manager, their share price had fallen below the IPO price of S$0.90. Source: SGX Company Announcements   Declining share price aside, HRnetgroup actually runs a very decent business. As with all decent businesses, I would be happy to invest when the price is attractive enough. Here are 7 reasons why it currently sits on my watchlist: 1) Strong Track Record of Growth Source: HRnetgroup Prospectus 2) Resilient...

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Book Review: 5 takeaways from Joel Greenblatt’s Little Book that still Beats the Market

I have not really been posting as regularly as I would have liked this month, simply because there is little investing action to speak of. This is primarily down to 2 reasons: 1) I am super busy (and a little stressed) at work as I have to cover for a couple of my senior teammates who are on block leave. 2) In order to achieve my portfolio re-balancing goals (here), I have to pretty much sell to buy (and erm, I haven’t actually sold anything since). Nonetheless, I have managed to finish my first book since Peter Lynch’s double...

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Tech sell-off exposes fragile manufacturing bull

It was just last Sunday when I blogged about the fact that Singapore’s SGX often exhibits strong correlation with United States’ markets (here). Last Friday’s tech sell off on US’s markets have demonstrated the point right smack on cue. For the uninitiated, while Nasdaq and NYSE have continued to perform admirably, there was a widespread fall in tech stock prices. Reasons attributed to the loss includes Goldman’s unfavorable report, Apple’s new Iphone using a slower processor and profit taking, none of which were compelling fundamental explanations. The losses of some tech stocks are illustrated below. Source: Google Finance, compiled on...

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Thoughts on US Macro and Portfolio Balancing

It has been some time since I last posted as I was tied up with work and my (very slack) CFA 2 preparations. With CFA 2 exam now done and dusted, I am looking to spend more of my free time on my hobby – investing and growing my portfolio. While I have not been researching on any counters during these 3 weeks, I have continued to monitor the macro economy. Here are some developments that I feel are rather interesting:   DJIA and S&P500 continue to hit new highs Soure: Barrons It seemed just a while ago when...

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Cogent Holdings – Growth Story Continues

Cogent Holdings is another firm that I had not written about for 2 consecutive earnings release. Given that the investment thesis was largely built on growth, it is high time to monitor their growth momentum. Interested investors can find their latest Q1’17 earnings here. Revenue   While growth has continued, top line growth rate has actually declined slightly.   Warehousing, Container and Property Management has been the main growth driver on an absolute basis. Given that the gantry crane on top of Cogent 1 and the Jurong Island container depot are now both fully operational, I expect the trend...

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Keong Hong 1H’17 – 3rd Pillar to Strategy Introduced

Keong Hong recently released their 1H’17 earnings (here). Seeing that they have released 2 earnings reports since I last wrote on them, I thought it would be good to document some updates given that Keong Hong is an extremely dynamic company. Keong Hong’s 1H’17 earnings results have been largely in line with my expectations and therefore this update will be focused on their strategy execution. Since my last review (here), Keong Hong had been executing on a third pillar for growth: A) Enter into Joint Ventures with 15%-20% stake and as the main contractor for property developments. This enables...

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12 things I learnt from Berkshire Hathaway 2017 AGM

Just as I did last year (here), I took some time out to watch Berkshire’s AGM hoping to glean some nuggets of wisdom from Warren Buffett and Charles Munger. It amazes me how Buffett and Munger are still learning and adapting their methods at the combined grand old age of around 180! Again, those who wish to view the whole AGM can do so here. ——————————————————— 1) Driverless Automotives are a threat to Berkshire’s business This is true both for Auto insurance (assuming driverless automotives are safer) and Rail operations (as driverless trucks become more cost-effective substitutes). 2) Buffett...

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