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Recent activities

Alen — Sun, 11 Sep 2011 08:15:00 +0000

It has been a while since I last wrote something. The financial market is hit by double worry, Euro debt problem plus slowing down US economy. I guess it will be a while for the market to sort out the direction. Therefore, I have took the pain to cash out on some of the holdings on loss. In hope that to avoid the volatility and able to buy it back at lower level. Chance for market to go down further? I think it is bigger than market make a u turn immediately. So, finger crossed, the politician is able to come together to finalise a good plan to revive US economy.

One of my holding C&O has cash offer from Shinogi. I have accepted the offer, in the view that the share won’t be able to move higher in near future. The stock’s key draw is the wide distribution network …

S&P downgrade US to AA+ rating

Alen — Sat, 06 Aug 2011 06:55:00 +0000

Latest news, S&P downgraded US rating to AA+, one level down from AAA. It is going to unsettle the market for next week. Expect more downside for the stock market. The good part is I didn’t really buy a lot these few months, waiting for more opportunity.

After the US debt ceiling soap opera, the purpose of S&P to downgrade US rating is puzzling. What is the difference compare now vs previously? Since the debt ceiling has been raised every time? With the current speed, the QE3 will be out sooner than later. Expect the stock market to bounce by then. Meanwhile, if possible, buy some quality name.

Hong Kong stock market also experienced big drop. Hopefully the stock get de-rated, so I can start establish my position there. The current volatility is interesting for investor to buy cheaply. The double dip word is coming back in the news.

This …

Another S chip going

Alen — Mon, 01 Aug 2011 14:18:00 +0000

Today, one of the stock in my portfolio – C&O Pharm announced the general offer by Shionogi & Co. This shows that although the market has so far ignored the good china company, there are people recognise the value.

First, it was Hsu Fu Chi, offer by Nestle. Now, it is Shionogi & Co offer for C&O Pharm. Number of good companies reducing.

Hsu Fu Chi has a good brand name, wide distribution network and low valuation compare to HK peers. It naturally attract company that like to grow in China faster. The same applies to C&O Pharm. Although the result was disappointing, the distribution network is something hard to ignore.

Going by this rate, all the good S chip would be taken private, left with those which offer little growth. I think my next forte will be branch out to HK market in order to gain access to China …

Stock melt down

Alen — Tue, 15 Mar 2011 14:22:00 +0000

Bad things come one after another. Inflation fear, middle east unrest, tsunami and the now nuclear plant blast. The situation is indeed worrying, I do hope it is under control and everybody will be safe. Market selling accelerated. I think it is panic selling, since nobody can predict the consequence of a nuclear melt down.

From big to small cap, all stock are under pressure. Any buyer? At least not me. I am not interested in panic selling, neither I am dare enough to go into market now. Low could be lower. If the panic selling continue few more days, then I might go in to grab some cheap stock.
Epicentre buck the trend to stay firm at current price. Recent broker report and ethusiasm on iPad 2 make the stock hot among investor. After few round of consideration, I decided to give it a miss. Why? Retailer’s margin is …

My recent sell decision

Alen — Sun, 13 Mar 2011 08:26:00 +0000

Market volatility has returned, starting with middle east and africa unrest, follow by last week Japan earth quake. My portfolio is back in red again. I sold away some of the counters in order to make the portfolio more concentrated. I also kind of realised that small cap, although offer potential great return, also comes with great amount of risk.

Longcheer
The buy decision originated with a broker call and the sell decision also come with that. When I bought the stock, it is kind of undervalued where company has been buying back share, giving out dividend and emerging market business is doing well. It briefly go up for a short period and come down recently because of the disappointing result. I managed a small loss. I am glad that I took that loss. Because after the result release, it fell quite substantially and I think the business will remain …

Buying on hope

Alen — Tue, 01 Mar 2011 14:27:00 +0000

Every investor has different expectation of the share he/she bought. Ultimately, everyone wants to make money. For big company, to attract investor willing to buy company’s share is not difficult. The earning is stable and growing slowly. Some are of course grow faster and has high PE.

For smaller company, attracting investor money is more difficult. The business is still going through transition or picking up. You need to have good story for people to buy into the share. Therefore, there exists the PR agency, to communicate the merit of the company. Investor buy the company on hope that the new venture or business will pick up and will make a windfall out of it. However, many time, you find that, story is one thing, performance is another thing.

Take an example, Anwell Tech, the recent financial result is disappointing. When the share was hot, chasing by punter, it went …

Happy golden rabbit year

Alen — Tue, 01 Feb 2011 14:07:00 +0000

Wish all a Happy Chinese New Year and Golden rabbit year. I hope this year will be good for stock market. After the initial rally, market is having a correction now. There are possible buy if the price is attractive. I may post again on my find and stock bought. Related posts: Trading Report Card [...]
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OUE – Analyst love it

Alen — Tue, 18 Jan 2011 14:35:00 +0000

For the past one weeks, two brokers initiate coverage on OUE Ltd. The target price given is quite close, around $4.2. The stock was also covered in the edge year end issue. Why the buzz around the company?

The draw:
- Office rental recovery
- Hotel business doing well as more tourist arrive

- More initiative to unlock value

At this price, the upside is about less than 20%. Not that attractive

Wilmar diversify into property

Alen — Mon, 17 Jan 2011 13:51:00 +0000

Few weeks ago, Wilmar announced the plan to go into China property development with Kerry properties and Shangri-la. Wilmar’s job will be sourcing the site for development with their connection, the partners will be managing the development.

The market reacted negatively on the deal. The logic is simple. Why diversify into something that is new and unproven? Furthermore, China property sector is

Selling Longcheer was a good decision

Alen — Fri, 14 Jan 2011 15:19:00 +0000

Longcheer is a handset design company which has customer in China, India and other emerging market.

I bought into the company share after being highlighted by Lim & Tan. The company is paying good dividend, having sufficient good return on equity, low valuation and business is doing well. Later on, DBS Vickers also recommended the stock. Although it is a tech stock I will usually avoid, I bought…

2011 – A new start

Alen — Sun, 02 Jan 2011 06:39:00 +0000

2010 was a busy year for me. The project work and constant OT took most of my time. However, I still manage to squeeze out sometime for investing.

2007-2008
Since the sub prime crisis, the global economy has gradually recovered. The pace of US recovery is still pretty slow and China has taken a bigger role in supporting global growth. When I think of my investment performance for 2007 to 2008,…

China Animal powerful rally

Alen — Tue, 07 Dec 2010 14:00:00 +0000

China Animal rallied 9% today. The powerful rally could be due to the news that the company is looking at increasing work force and M&A next year. The other reason could be the coming HK listing.

I have high hope on China Animal. If things turn out to be what analysts have predicted, the earning growth could continue and share price heading north. Invest in small cap is about taking position

What to buy?

Alen — Sat, 20 Nov 2010 07:42:00 +0000

This is a lazy afternoon, sitting in front of the computer, just want to let my mind be empty. However, read some blog entries, this trigger me to write something.

The market remain uncertain as the economy data is not so rosy. In view of US QE2 measure and the general comment I read every where, I am confident next year will be a good year for stock. I suspect more hot money will flow to Asia

What to do with your investments in view of US and Euro debt problems?

Eratat promising turn around and low valuation

Alen — Mon, 08 Nov 2010 12:30:06 +0000

Photo by Tom@HK

Eratat has just released the Q2 result. A quick scan on the financial statement:

For 6 months result,
Gross profit +3.3%
Because of reduced in expenses, Operating profit increased 23.4%
Trade receivable is quite high at 347,747 because of lengthen credit term
Current liabilities 130,968
Cash and bank balance 131,936

Margin improvement +2.8% for 6 months
Operating cash flow at 99,189
But because of the high trade receivable, it registered a cash outflow

EPS is 17.16 RMB cts (3.31 SGD cts)

In the cut throat China sports wear market, Hongxing has suffered a lot. Eratat is moving away to lifestyle fashion sector. How successful it is, remain to be seen. However, this set of result is quite promising. There are few important points: Read more…

Long term share investment is about compounding growth

Alen — Mon, 20 Sep 2010 10:00:05 +0000

Photo by Francisco Belard

The primary reason for people wanting to trade stock is to buy low sell high. So, they can earn the price difference. Market is driven by greed and fear. Many people made wrong decision because of emotional factor, which causes them to sell low and buy high.

Buying stock is different from buying things from supermarket. In supermarket, everyone has a benchmark on the value of goods, you will buy if the item is on sale, the price is now lower. Stock price is different, when the price is low, people are afraid it will fall further. This is because of the fear factor. On the other hand, if your favourite stock is going up each day, sooner or later you will get sucked into the rally and buy it too high.

How do we avoid that? We need to have a mental framework of establishing the value of stock. Once you have a benchmark on what price this stock is worth. When it is selling below the benchmark, you can take time to accumulate. When it is selling way above the benchmark, you can take time to unload it. Read more…

Better US job data send market soaring

Alen — Sat, 11 Sep 2010 00:59:21 +0000

Photo by Sir Mervs dose

Last Friday, US release better than expected job data, this cause the worldwide market to soar. I think economy is a complex system where nobody has exact idea on where it will head to. Sometime analyst or economist is right, sometime is wrong.

Market has been bearish for quite sometime and this could be the exercise for a relief rally. After that, the fear will set in, the invisible hand will focus on the negative side. I listened to quite a lot “expert” analysis on paper or news, market is going to be volatile. On which day it doesn’t? The investor is trying to price the risk now, by selling when pessimistic and buying when optimistic. Read more…

Keep in mind the megatrend

Alen — Mon, 06 Sep 2010 05:48:58 +0000

Photo by Andrew Mason

For fundamental investors, some focus solely on the company fundamental and pay little attention on the economy or industry condition. Some will combine the technical analysis or other factor in analysing the company. Although I am fundamentalist, I also take note of the megatrend around us.

A simple example and also my favourite will be China. China is going through the urbanization process and there is no turning back. Through this process, when consumer become more wealthy, they will spend more. China consumer story is my constant favourite. Beside this, China property looks good on the long run. More people living in the city will mean more demand for housing. As more people get richer, the demand for luxury goods or housing will rise too. Read more…

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Bull or bear, where market going to next?

Alen — Thu, 22 Jul 2010 10:00:43 +0000

Photo by rednuht

As this juncture, the direction of the market is less clear to most of the people. Some are still fearful for the Europe problem or the double dip situation. They haven’t happen yet, but there is still posibility.

As fundamental investor, I am less concern on the market direction. If you know the company you are investing in is doing well. Naturally, sooner or later, the share price will reflect that. However, I am more mindful nowadays on the market direction. I don’t want to being caught off guard like the credit crisis time. There is no guarantee it won’t happen again and you will escape unhurt, I think it taught me to be careful.

I recognize the direction of the market for coming 3-5 years is up. I am not so worried about the short term fluctuation. Again, there is no guarantee the market will definitely go up, but we have suffered for two years. It is time market adjust back to normal. Overall, I remain positive on the general direction. Read more…