25 May 2013

Finding a Good Company

It takes a lot of time to find out a good company. For me, I would follow the following criteria:
  1. The company has a good management to take up challenges to find out new markets / products and they can spend time and money in doing advertisement to create brand awareness. 
  2. The CAPEX can be in a little amount for building up competitive advantages. So being into niche market or out source the non-core items could help to reduce the cost of doing business. 
  3. The business must have the power to fight against the inflation, or it has the bargaining power against customers when adjusting the selling price due to inflation. 
  4. The company focuses on just 1 industry, or at least have a dedicated team to focus on the industry, so that it could grow either horizontally or vertically. 
  5. A good business should always outperform its peers in terms of revenue or earning growth. Having a good ROE means the company could have its own formula to simulate growth. 
When you search out all the company that you think it is good for you to invest, just ask about few questions below:
  1. What is the price you think it is worth for and what is the price you would like to buy it
  2. How long is your investment time horizon and can you take the price uncertainty risk that you may experience the price fluctuation along the investment. 
However, I would think that it is worth to do more homework to dig out those good companies and just be patient to buy it whenever you think the price is right for you and hold for it until you get another good company to buy with cheaper price. 

15 May 2013

Lunch Talk with Declout CEO - 15 May 2013

Today I just had a group lunch session with Declout CEO, Vesmond Wong Kok Khun. To recap, Declout is a catalyst counter which listed on SGX last year. He is a relatively young CEO, as we know that this is quite common in IT industry. He explained to us about his company and what his business strategy to further grow his business.

He categorize his businesses into 3 parts:

1. IT Infrastructure Services
2. Cloud Computing - SaaS, PaaS, etc
3. VDC - Vertical Domain Clouds such as Games Clouds Infrastructure that includes Games Cloud Infrastructure (GCI), Unified Payment Infrastructure (UPI) and Gamers Community Portal.

He mentioned to us that VDC could be the next engine of growth to his company and IT Infrastructure Services may experience negative growth in future. So his focus now is to working hard to launch the Games Cloud Ecosystem. To make it success, he needs a group of participants in South East Asia as well as the "killer apps" which can generate more monies to the company.

While there is no regulators to working on the virtual money cash flow in South East Asia, the CEO mentioned to us that the currency risk is minimum as the company has inked the agreement with those participants on the currency settlement procedures.

Going forward, his plan is to spin off those mature subsidiaries. In my opinion, this is a good strategy to generate more cash flow from existing companies and move on to involved in new sector. Although I am with IT background, however I do not really know how to calculate an IT company. Anyway I will put this counter in my watch list for further investigation and see whether his plan would be success or not.

Disclosure:  Catalyst Counters are among relatively young companies to seek fund to further grow their business. You have to bear higher risk in investing in those counters. 

07 May 2013

Investment Can Make Your Life Better

While a small portion of people who are so lucky to inherit wealth from their parents, majority of us were born with nothing. To most of us, our parents are working as an employees for 20 - 30 years in the same company and enjoy a stable life after setting up a family. Some of them may enjoy pension funds or the EPF/CPF money after retired. But to be frank, I think that the EPF / CPF money taken out from the government can only last for a few more years due to certain reasons:
  1. Medical Expenses: Medical Expenses has risen faster than inflation rate in general. Without a proper plan to keep yourself healthy, it will incur a huge medical bills for you when you grow older. 
  2. Travel Expenses: Some retirees enjoy traveling after retired. They are still in healthy shape in their 50s / 60s. It is not a small amount to travel oversea, and many will go shopping for their relatives while traveling. 
  3. Kid's Education Fees: Few still need to spend money on their young kid's education fees. It is very expensive studying oversea. 
  4. Daily Expenses: While many stop working after retired, they still need to spend money on food & other daily expenses. 
I have met with many friends who are employees but at the same time are investors as well. They try to create many sources of income to reduce the dependency of the salary income. To me, investment is another way for you to better manage your money from being hurt by the inflation. It is unwise if you just keep all your excess cash in bank for a long time. 

Investment can change your life, especially after you retired from your long term careers. You can choose to put your money in bank to enjoy little fix deposit, or to put your money in any other investment tools to enjoy a stable income. For those who are in their retirement life, it is wise to park more money in fixed income assets, and allocate some in equities to enjoy capital growth. For those youngsters or young couples, I believe you have made your own choice, that may change your life some 30 years later.

Singapore Shares Market Daily Update - 7 May 2013

Stocks in Focus: OUE, CH Offshore, Hutchison Port, Intraco, MTQ, Oceanus, Foreland Fabrictech, GLP, Cambridge REITs, Super Group, Hiap Seng, Elektromotive, XinRen Aluminium, China Sports

OUE: 1Q13 net profit - 92% y/y to $1.8M despite 8% revenue increase to $105.4m on higher property development sales offset by lower hotel revenue. While gross profit slid 6% due to lower rentals from 6 Shenton Way Tower 1, bottom line was hit by jump in admin expenses (+62%) and surge in finance expense to $33.5M (+80%) on more borrowings, forex loss arising from translation of a USD loan and fair value loss on USD/SGD currency swap. Book value stayed at $3.49.

CH Offshore: 3QFY13 net profit sank 57% y/y to US$4.8M due to absence of gain from sale of vessel (3Q12: US$3.9M) and lower revenue (-25%) as 2 vessels completed their contracts in Jan 13 and were subsequently docked in Mar for mandatory overhaul and inspection.

Hutchison Port: Dock workers at its HK Int’l Terminals (HIT) ended their 40-day strike, accepting a 9.8% wage increase. The workers had earlier demanded a 23% gain, while employers offered a 7% increase. HIT had highlighted that daily loss narrowed to HK$2.4M on 5 Apr after some strikers returned to work from HK$5.0M earlier.

Intraco: Acquires an additional 9.6% stake in packaging and resin firm Dynamic Colours, taking its total interest in the packaging and resin firm to 39.5% and triggering a mandatory conditional cash offer at $0.185 per share.

MTQ: 4Q13 net profit soared 94% y/y to $7.7M on 179% spike in revenue to $93.7M, boosted by maiden contributions from newly acquired oilfield engineering subsidiary Neptune Marine Services and organic growth in all segments. Maintained final DPS of 2¢, taking full year tally to 4¢.

Oceanus: Widened 1Q13 net loss to RMB45.2M versus RMB39.1M a year ago. This came from a 69% fall in revenue to RMB14.8M due to poor demand for abalone that had not yet reached maturity as well as a frugality drive by the new government in China, which dampened conspicuous spending, especially high end consumption.

Foreland Fabrictech: Incurred net loss of RMB9.5M in 1Q13 vs Rmb29.6m profit a year earlier as revenue collapsed 99% from RMB161.9M to RMB1M due to relocation of existing production facilities to a new factory site, expected to be fully operational by end of 2Q13. The group maintained its net cash position with NAV of RMB1.22.

GLP: Leased 108,000 sf of logistics space at GLP Park Beijing to a leading 3rd party logistics provider, achieving 91% occupancy.

Cambridge REITs: Trust manager and trustee are being sued by 2 tenants of an $18.5M industrial property owned by the trust. The tenants claim that both had reneged on deal to sell the HDB leasehold property with site area of 4,564 sqm and GFA of 8,997 sqm to them. The case would go to trial on 2-5 July 2013.

Super Group: Disposed 35.3% associate Sun Resources for $26m, including shareholder loan of $9.3m, reaping a one-off gain of $16m for FY13.

Hiap Seng: Awarded a 3-year refinery maintenance contract by S’pore Refining Company on a cost-plus basis, effective 1 Apr 2013.

Elektromotive: Signs MoU with Renshou county in Sichuan, China to set up a public transportation electric vehicle fleet and recharging network for public transportation in Shigao Industrial Zone. The investment for first phase is estimated to cost Rmb30-50m with future phases targeting 60 other towns and industrial parks.

XinRen Aluminium: Group expects to report a marginal net loss for 1Q13 due to weaker selling prices of aluminium products.

China Sports: Issued a profit warning that 1Q13 results are expected to be worse than the Rmb4.2m loss suffered in 4Q12.

04 May 2013

Plans for MRT Link to JB in Final Stage - May 2013

Wow, there is a good news to me that, there is some progress on MRT plan linked to JB.

According to the source, the Rapid Transit System (RTS) linking Johor and Singapore is in near completion of first phase. Hopefully we will have a clearer picture after the coming General Election tomorrow (5 May 2013).

There are about 100,000 commuters who are traveling in between JB and Singapore. With RTS in place, we hope that the traveling hours can be shorten by at least 50% from current more than 1 hour in between Johor Bahru and Woodlands due to congestion in Causeway as well as time waiting for buses to MRT station in Singapore.

I hope that the new government of Malaysia could still build up a good relationship with Singapore to create a metropolis in Singapore - Johor Bahru that provide a good living and working environment for both citizens.

You may refer to the news below:

SINGAPORE- Singapore's transport ministry said the architectural and engineering consultancy study for the Rapid Transit System (RTS) linking Johor and Singapore is currently on-going, and its first phase is nearing completion. 

The Joint Ministerial Committee (JMC) for Iskandar Malaysia (IM) will then decide on the option for the RTS Link to be further studied as part of the second phase of the study.

Both countries have agreed for both sides to co-locate their Customs, Immigration and Quarantine (CIQ) facilities at both the Singapore and Johor Bahru (JB) stations, so that cross-border commuters on the RTS Link need to clear immigration only once at either station.

This means that those who are taking the RTS Link from Woodlands in Singapore will clear both Singapore and Malaysian Customs before boarding the train and need not clear again when they arrive at JB.

A similar arrangement will also be in place for those from JB taking the RTS Link into Singapore.

Meanwhile, outgoing Johor Chief Minister Abdul Ghani Othman on Thursday took his electoral fight to Singapore - by taking a bus down to meet factory workers in the Republic.

Mr Abdul Ghani travelled by bus from Gelang Patah in Johor to Jurong East bus interchange in Singapore.

It was his first time travelling on the Causeway Link bus and he noted that the journey took more than an hour.

The Chief Minister wanted to experience what it was like for Malaysians who travel to Singapore daily.

And he said commuting will be more efficient once the Rapid Transit System is ready.

He said: "A lot more people can be moved with the RTS. The capacity with be enough, the speed will be fast enough, and people will be moved into Singapore and back more efficiently.

"So, that will definitely reduce congestion as a result of the daily usage of the causeway or the second link."

The Rapid Transit System is aimed at enhancing connectivity between the two countries.

It will also be integrated with public transport services in both Johor Baru and Singapore.

Some 100,000 workers in Johor commute to Singapore every day. To help commuters move more speedily, there is a possibility of making the CIQ facilities more efficient.

Caretaker Chief Minister Abdul Ghani Othman is suggesting to have a single CIQ complex for both countries.

He said: “Of course it should be enhanced with a joint CIQ; if that takes place then it will achieve the most optimum objective of an RTS."

In Sunday's general elections, Mr Abdul Ghani is contesting the parliamentary seat of Gelang Patah against the Democratic Action Party's Lim Kit Siang.

And as the campaign draws to a close, he remains upbeat about his chances.

“There is very solid support in some (groups), improvement in support from some other sources, at the same time there is sufficient support from elsewhere," he said.

There are 26 federal and 56 state seats at stake in Johor, which is seen as Barisan Nasional's stronghold.

But the opposition has set its sights on Johor in this election and sent its big players to contest in the state.


Source: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=96091:plans-for-johor-spore-rapid-transit-system-in-final-stages-abdul-ghan&Itemid=2

02 May 2013

Will Malaysia Tycoons be Affected by General Election's Result?

The 13th Malaysia's General Election is around the corner. Many Malaysian working in overseas are trying to come back to cast their votes to select a new government. If you do not know, the current two major parties are Barison National that rules the country for 55 consecutive years and Pakatan Rakyat that was formed 10 years + ago as the biggest opposition party now. 

What I found from newspapers was 1 article wrote about whether Malaysia Tycoons are affected by the coming GE's result. Some of the Tycoons that have a very close relationship with current government, some of them are Syed Mohkthar and Ananda Krishnan who have been building their business empire under Tun Dr. Mahathir's leadership in 80s & 90s. Ananda Krishnan controls Astro & Maxis while Syed Mohktar controls from Sugar, Ports to Proton etc. Pakatan Raykat leaders claimed they will check through all the contracts being given by Barison National if they take over in coming GE. Nonetheless, I doubt it would be an easy job for them to sort out those unfairness contracts. 

While I believe that BN will still rule the nation, the winning gap would be narrowed even further, due to strong support from Chinese and Anti-UMNO Malays. To simply put that, while the political risk will increase in short term, but we would see a better Malaysia in future. I love my country, and I do hope my next generation can stay and work in Malaysia, without the needs of migrating to other countries. Nonetheless, as the world is becoming smaller via better connectivity through internet, I believe we should have a mind of becoming Global Citizen, that to protect our Earth Mother, from being destroyed by ourselves. 

My wife told me that she would support the protest held at Hong Lim Park for the over population issue, although she is also a Malaysian. I just do hope that Malaysia could sort its own corruption issues on top of others first. 
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