27 December 2013

Sim Lian 2014Q1 Result Summary - December 2013

Please allow me to post a summary of Sim Liang 2014Q1 Result although it has been released since last month. Below is the screen shot from my worksheet, and I hope that it could give you some highlight on the performance compared to FY2013.

Income Statement Comparison
Balance Sheet Comparison (Part 1)

Balance Sheet Comparison - Part 2
Cash Flow Statement Comparison - Part 1

Cash Flow Statement Comparison - Part 2

Management Comment on Market Outlook FY2014

26 December 2013

Hao Yuan Venture into Iskandar Malaysia - Dec 2013

Although I am not very familiar with Hao Yuan, but I believe that such as move (RM1.6B land acquisition) and RM8.0B gross development value in Iskandar Malaysia will definitely attract many investors to take a look of this project. You may go to the below link for further explanation.

Source: http://www.businesstimes.com.sg/breaking-news/singapore/singapores-hao-yuan-investment-lead-us24b-development-iskandar-waterfront-20

I understood from my friend that there was some bookings to be cancelled for Country Garden project in Danga Bay. Nonetheless, what I could hope for is the business development here such as MNCs to setup their branches here so that they could rely on Singapore, a regional hub to link to other countries in the world.

Due to the strong Singapore dollar currency, I believe it will attract a few investors to park their excess cash here, until the cooling measurement imposed by Singapore government is reversed.

19 December 2013

US QE Tapering Program Started - Dec 2013

Today (18 November 3PM US time), US FED announced its plan to start QE tapering by reducing the monthly bond purchases to US$75B from US$85B earlier. It somehow was digested in the market, while US stock market pushed up to above 16,000 point again.

To me, I am not surprised that the QE tapering has been started, the question now is whether it will affect the market sentiment. FED hint that the future interest rate will remain in near zero range as long as unemployment rate stays above 6.5% and they would manage it so that inflation rate could stay in merely 2% range.

Given the speech by Bernanke, a retiring FED chairman, I believe that all center banks around the world would adjust their monetary policy by preparing to adjust the interest rate upward gradually, in long run. This, to me will definitely cool down the sentiment so that speculators would reduce their long position and we could see the impact of bubble caused by QE would be reduced to the minimum level.

As Singapore is a small open economy, I believe it would definitely re-adjust its monetary policy later. So, the inflated asset value would be reduced gradually, if not significantly. The hot money would definitely be flowing back to more traditional tools such as money market fund / T Bill / etc. Nonetheless, we should always look for good purchase opportunity during high interest rate environment. There might be some bargain buy there.

You may refer to the below link for further explanation.

Source: http://www.bloomberg.com/quicktake/federal-reserve-quantitative-easing-tape/

18 December 2013

Iskandar Malaysia Property Sales Seen Slow Down - Dec 2013

It seems that after so many developers rushing into Iskandar Malaysia after Klang Valley / Penang property boom and Singapore property cooling measurement, Johor government started to implement several action to discourage investors especially foreigners to invest here.

Some of the steps taken were:

  1. Introducing 2% of Buyer Stamp Duty for foreigners, instead of maximum RM10,000 previously
  2. Introducing 30% of Real Property Gain Tax (RPGT) within the first 5 years and a permanent 5% tax after that to foreign buyer 
  3. Minimum foreigner purchase price increased to RM1.0M from RM500K previously
Which such measurement taken in place, I believe that it may rule some speculators without holding power out. So far, some of the launches this year has poorer take-up rate compared to about 1 year ago. For more detailed information, you may refer to the link below:

Another issue that brought to the spot light was that Johore Sultan announced weekend holidays to fall on Friday and Saturday. It may create inconvenience to private businesses that have a business tie with Kuala Lumpur / Singapore offices. Many investors will be worrying what other changes of policy that Johor government would make later. 

In my humble opinion, Iskandar Malaysia should strive to be a so called suburb of Greater Singapore. But it only can be happened if and only if both government could push to make it happen. High Speed Rail project details is set to be confirmed by next year (2014) and let's see if it could be materialized by year 2020. I sincerely hope Iskandar Malaysia could set to be a good example in Modern Islamic Countries. 

17 December 2013

Woodlands Regional Center (Singapore North Corridor) Land Tender - December 2013

URA announced tander of two pieces of land near to Woodlands Causeway Point. You may refer to the link here for the details.

Woodlands Regional Center is envisaged as another growing engine of Singapore, under the plan of government to further reduce the dependency of CCR as main CBD area. I just noticed that Woodlands Center is now planned to be linked with BKE, SLE & NSE (in future).

Below is the screen shot of NSE which I took from LTA website.

What I was thinking was that, it would be more convenient for drivers to travel in between JB and Singapore via the North South Expressway if there is a new route for private transport to come from/to JB. The total length of NSE is about 22KM which I think is at least 30% faster if you come to downtown from JB (if and only if there is a road for private transport to go via new route) via BKE/SLE/CTE.

16 December 2013

Total Debt Servicing Rate (TDSR) - a Total Game Changer

In case you do not know what TDSR means for, it is a framework introduced by Singapore government in late June this year to further curb the property bubble by allowing 60% of total income to be served to pay the loan across all other loans such as car loans / personal loans etc.

This is probably the last and most effective action the government to take to curb the speculation of Singapore real estate market, with the cautious mindset to prevent the increasing interest rate in later year (2015/2015) that may hit Singapore economy.

Let me give you an example of how TDSR works:

Under this framework, all property loans must stay within 60 per cent of all monthly debt obligations to monthly gross income. Financial institutions must consider all outstanding debt obligations - such as property loans, car payments and credit card loans - in computing the TDSR, which also fixes interest rates at the higher of either the prevailing market interest rate or a specified medium term rate.

Imagine a family with a car loan S$2000, personal loan S$1,000 and gross income S$8K. Previously the family could take up to 35% of gross income which is S$2,800 mortgage loan. But with car loan and personal taken into consideration, now the family could take up to S$4,800 total debt or S$1,800 mortgage loan payment scheme. The family may now either to postpone the plan to upgrade the car or to reduce their budget on home purchase.

Hopefully by next year when the property price is stabilized, both my wife and I could consider to settle down here by purchasing a resale HDB with lower COV (but still with additional ABSD) thanks to this framework.

Source: http://www.businesstimes.com.sg/premium/top-stories/tdsr-game-changer-20131216

Debt management

Most of the time, if we focus on business development plan, we may require a significant amount to support the working capital as well as CAPEX plan. To execute it well, we may sometime extend loan to customers by introducing longer receivable time as well as obtaining higher debts from banks. 

In normal circumstance, we may face positive & negative impacts on the debt management planning. We may not need higher equity demands as we can ride on the debts from banks to support our expansion strategy without diluting equity earning per shares. We may also obtain higher revenue by allowing customers to pay us in longer period, and let them to grow their business together with us. 

Of cause there is a risk in it. We may end up increasing bad debt ratio together with the increased interest rate. We may also face higher interest rate during the bad time. To combat with this, a cautious yet detailed execution planning is needed. 

Sometime, I believe that to make suppliers & customers success together is part of our business / jobs. And we could further increase the profit together in the same ecosystem. Win-win strategy is always a better strategy. 

15 December 2013

Shares Investment - Invest for the Future (Dec 2013)

To be frank, I'm still in the learning stage. This post may be a short note to me to remember why I want to invest in shares, and what is the necessary things to keep myself calm when things are not happening as what I thought.

There are thousands of reasons why you would like to invest in equities than other financial products, such as bonds, real estates, unit trusts, commodities / derivatives etc. Once the tools can fit into your investment philosophy, then you should keep on digging deeper to find out how / what's the best to keep your dream alive.

To me, Equities means being a partner (be it active/passive) of the the company's management that maybe the major shareholders too. In this case, if you are using passive approach, what your mind maybe is just to enjoy the dividend received / capital gain along the investment journey. It is easier for you than the management to liquidate all your holdings just to jump into another boat to continue your long term journey. In this case, I would imagine most of us (retail investors) are having lesser control of the company, and therefore demand lesser return from the management. However, if you have the long term investor mindset, the first few things you may need to find out from the management is:

  • What else have you done which any other competitor not yet?
  • What is your succession planing?
In fact, we should focus on what the group intend to do in next 5 years before we can decide to stay a longer term with him. I have seen some good companies can grow to great companies within next few years. The desire of success was in the DNA of the top management. They could make a bold decision with cautious execution plan on the long term strategy they made earlier. The most important part is the corporate finance, where the company could plan ahead of their investment plan, so that they will not facing any kind of cash flow problems, which would happen after the economy peak is over.

11 December 2013

Buy Or Sell in Current Singapore Stock Market? Dec 2013

It's now getting end of the year of Year 2013. I noticed that some investors would agree that they may earn a lot from market volatility, but most of the investors especially passive investors may not enjoy it, especially STI index Year-To-Date performance is now in the negative territory, with the fear that QE tapering is soon to be announced by FED by middle of the month. 

Frankly speaking, I am not afraid of the volatility, but am just afraid of whether my counters are doing business well given the current market condition. The good company can grow to a better company by applying cautious expansion strategy. By next year 2014, I am still looking good in several sectors (it maybe translated to a lesser return possibility if everyone is looking good in those sectors), such as Oil & Gas, Consumer, Construction (especially for those related to BTO / MRT projects) etc. For those sectors that greatly impacted by the interest rate sensitivity would be REITs (yield spread would be widened), Property Developers (property cooling measurement is taking a hit now), 

If you are a long term investor, you should not be afraid of the market sell off for a time being. In fact, Singapore is now one of the cheapest stock markets in Asia in term of PE (about 13X or 7.7% earning yield). So long as the FD rate remains below 3.0% by year 2015 / 2016, I believe that there are more people willing to take out their money from banks & CPF OA to invest in various investment tools.

Having say that, I do not think it's wise to bet for a trend in short term as volatility still there. Ya, I'm still a strong believer in betting big in a good company is far better than putting money in bank in long run. 

09 December 2013

Riot In Little India, Singapore - December 2013

There was a riot happened in Little India, after a guy was killed in an accident that took place in Little India. Hundreds of angry foreign workers anticipated in a riot that destroyed a few police cars. Nonetheless it is now under control and the police is investigating the case.

This is another serious case after Chinese bus drivers stopped working for a few days in an attempt to show their unhappiness after being noticed of a lower salary compared to their Malaysian & Singaporean colleagues. This resulted a 4 Chinese put into jail and 27 was terminated contract and sent back to China. 

I believe the Singapore government is now in the midst of dealing with foreign labor policy to ensure that all these things that will not be happened again. According to the government, all foreigners are not allowed to raise their voice in public area. Even for Singaporean, they can only do it in Hong Lim Park. 

To me, I am quite worried if things go wrong, and may resulted in more foreign MNCs to reconsider their long term strategy to treat Singapore as their regional hub. However, I think this is a non-event and we will see how Singapore government handle this issue with everyone in mind. Hopefully it can be resolved soon and we will see a peaceful Singapore again.

02 December 2013

E&O Recent Launch - Andaman Edition 18 East, Penang (Dec 2013)

E&O recently announced latest launch - Andaman Edition 18 East, Penang. You may watch the following video for more detailed information. The project is located at Seri Tanjung Pinang, a strategic location for people to seek a decent living in Penang Island which is famous of its varieties of good food and heritage scene.

Source: http://www.propertyguru.com.my/property-news/2013/11/11336/e-o-brings-to-life-living-by-the-sea-concept

You may find my previous post to find out more on E&O, which is listed in Bursa Malaysia and being one of the well known developers in Malaysia.

Thai Beverages - Political Risk (Dec 2013)

Thailand recent unrest have triggered a tough question to Thai Prime Minister Yingluck Shinawatra to solve her internal issues. I hope that the issues can be resolved asap as it will give negative impact to investment and business in Thailand. 

As a company base in Thailand, Thai Beverages is having large Thai exposure even though after the acquisition of F&N recently. I sincerely hope that Thailand can return to a functional government soon. While I am not very sure of the actual impact to Thai Beverages, but we can see a weakening price chart and hopefully the price can come back to above 50c if the protests can be resolved soon. 

With recent weakened Thai Baht, it only could help exporters but not importers to gain more profits. So far, many countries has issued warnings to its residents to be very careful while traveling in Thailand. I hope that every travelers in Thailand can come back safely. 
Related Posts Plugin for WordPress, Blogger...

View All My Posts Here