28 November 2014

Keong Hong Full Year Report Summary - November 2014

Keong Hong recorded total revenue of S$272M, an increase of 85% yoy compared to previous year, but net profit dropped by 10% to S$20M. Gross profit margin and net profit margin are 11.12% and 7.21% respectively. The decrease in profit margin is mainly due to the product mix and increase in construction costs admist intense competition as well as higher labor costs due to government labor tightening policy. 

The company announced a final 1.25 cents dividend or total 2.25 cents dividend, which translated to 5.7% full year dividend yield based on the market price of 39 cents, and PE ratio and PB ratio are 4.6X and 1.14X. 

27 November 2014

BRC Asia - Full Year Report Summary - November 2014

Singapore, 26 November 2014 – SGX-Mainboard listed BRC Asia Limited (“BRC” or “The Group”), one of the largest prefabricated steel reinforcement providers in Singapore, reported net profit of S$28.4 million on revenue of S$397.4 million for its financial year ended 30 September 2014 (“FY2014”), which were 20% and 7% lower respectively when compared with the preceding financial year ended 30 September 2013 (“FY2013”). This was despite having achieved a record sales volume in FY2014 in a booming local construction market. The key reason was declining selling prices which fell faster than steel costs due to intensifying competition.

Financial Highlights of BRC Asia

26 November 2014

Sim Lian Annual Report 2014 Quick Analysis - November 2014

Sim Lian group is a local construction company that ventures into property development and property investment in Singapore as well as in oversea (Australia). The portfolio of developments at home now include residential, commercial and integrated developments in key locations.

Financial Highlights

Income Statement
The group achieved total revenue of S$715M for FY 2014, a 3.7% drop from a year ago. Net profit however showed 2.3% improvement to S$172M. There are several reasons attributed to this:

  1. Improvement in gross profit margin - 30.19% compared to 27.21% a year ago, which I believe is due mainly to changes in product mix as well as better operating efficiency.  
  2. Increase in other operating income - S$7.7m compared to S$5.8m last year, due mainly to increase in interest income and other rental and sundry income. 
  3. Shares of results of joint ventures, net of tax increased to S$22.5M from S$11.7M previous year.  

08 November 2014

Wee Hur - Another Record Year this Year - November 2014

According to the latest quarterly report release yesterday, Wee Hur showed a great improvement in both revenue and net profit for 9mth period ended September 2014, as one of its Industrial project obtained TOP on August 2014. Wee Hur easily achieved S$102 Million net profit with 3 months to go for current financial year. As this is a record year for Wee Hur, I believe that the dividend payout will not be lesser than 4 cents as per paid during FY2012.

I would like to say thank you to my friend who introduced this counter to me, as I would not know if it could achieve this good result this year as most of the revenue can be recognized after the TOP (e.g. HDB, EC, Commercial, Industrial, foreign properties etc). This makes us more difficult in predicting / forecasting the revenue as well as the profit for a property development company, and it will show a very volatility of the revenue and profitability trend since 2011 (the implementation of FRS115).

Nonetheless, I believe that it is now bear market for real estate market, as there is lesser transaction done on market. But it may also a good time to buy the land piece at cheap price as what Wee Hur did for an acquisition of industrial land in Woodlands which it targeted to launch it by next year (FY2015). I believe that with prudent care and good execution, it will achieve a good take up rate for the projects on hand. It maybe a good time for long term investors who try to accumulate those cheap property stocks before the market rebound later (perhaps 2 years time after Singapore GE??).

As for its venture in China, it is still in Due Diligence stage so that I believe that the profit may not be kicked in soon. As for dormitory business, it will be in full operation only by December 2014 and let us see if it could provide a good recurring income to the group or not from next year onward.

06 November 2014

Most of the Time, It Does Not Really the Hot Stocks that Make Money For You - November 2014

I understand how brokers make money. Most of the time, they will recommend you to buy stocks based on the current "popular" topics. And those counters on the top volume board will get many traders to target on. Why would so many buyers chasing after the "hot" stocks?

Reason #1:

It is easier to buy and sell (in other word, it is easier for buyers to buy and then sell it off within a few seconds). Based on some conventional theory, you could reduce a risk level for a counter if you could buy and sell easily. This is what we call - Liquidity Risk. There are too many investors targeting on those counters with high trading volume / so called liquidity so that they could easily trade it and run away if needed.

Reason #2:

Normally for hot counters, they will have some reasons for public to chase after. Some may try to long for good reasons or some may go and short for bad reasons. If investors solely trade based on the only reason that it is a hot stock, then it may just force the investors to sell it off later when the trading volume is low (by that time, the share price maybe lower due to the fact that the liquidity risk is higher - go back to my reason #1).

Reason #3: 

Some investors / traders just don't have any idea on what they want to invest / trade. So they may just follow the market trend (buy or sell what most people will trade). This is only good for those investors who have strong belief after they have done their own homework. If you simply just follow the market, you may later find yourself lost in the middle.

So Why Do You Need to Change the Mindset? 

I also understood that some of the investors make money by NOT trading the hot stocks. They would rather go and wait for the quiet period to come, so that they could buy the counters at cheaper price. For some counters, they have been neglected by the public due to the liquidity issue (daily trading volume is very low, that you gotta wait for a few more days to complete a whole big chunk of purchase). Instituitional investors may also not favor in those small-medium cap counters or under traded counters as they have to give reasons to the stakeholders why they buy them. It is better for them to just follow what other fund house will buy in order to not to differentiate too much from the peers. (After all, the performance bonus of the fund manager is just to beat the market, not 100% different from the market).

Many hidden gems were previously under-covered by most analysts / fund managers. It may be good if we could find it before most of the people started investing in it.

The other reasons is that, there is low trading volume during the bear market. Most people especially traders would go and have a rest during bear market as they could not find a good opportunity to trade short term. It maybe an opportunity for certain investors to slowly pick up their own choices of investment during the bear market.

Your Comments?

Leave us your comments below.

04 November 2014

Thai Beverages Unveils 2020 Strategic Roadmap - November 2014

ThaiBev Unveils “Vision 2020” Strategic Roadmap for its Group

  • Increase revenue contribution from non-alcoholic beverages to over 50%
  • Increase revenue contribution from outside of Thailand to over 50%
  • Streamline businesses into three product groups supported by common infrastructure
  • Push core brands and key markets for each product group

Thai Beverage Public Company Limited (“ThaiBev” or the “Group”) unveiled “Vision 2020”, the Group’s roadmap for the next six years. Driven by “Five Strategic Imperatives” – Growth, Diversity, Brands, Reach, and Professionalism, ThaiBev is setting out to further the success it has progressively achieved since its establishment in 2003.

“Vision 2020 is all about sustainable leadership. It underlines our resolve to consolidate and build on our leading position in Southeast Asia. To this end, we endeavor to align our various businesses along a common path and harness our combined strengths. Through Vision 2020, we seek to provide customers with even better products; create greater value and deliver more sustainable returns to shareholders; and enlarge opportunities for our employees,” commented Mr Thapana Sirivadhanabhakdi, President and CEO of ThaiBev.

For more details, please refer to here.

My Notes

It seems that Thai Beverages is making a good / brave move to further diversify its core business into non-core sector such as soft drinks / non-alcoholic drinks. It is expected that F&N + Sermsuk will be playing a key role in making it success in long run to venture to global market. 

I would see the way that F&N to dispose off Myanmar brewery business a step further to its vision 2020. From now on, I believe Thai Beverages will be treated as MNC instead of labelled as Thai based company after the F&N acquisition. Hopefully it could also dispose off Chang beer division in future (which I doubt so) as it is still not making good money even compared to non-alcohol division . 

03 November 2014

Frasers Centrepoint Limited begins integration of Australia business - November 2014

Singapore, 3 November 2014 – Frasers Centrepoint Limited (“FCL” or the “Company”, and together with its subsidiaries, the “Group”), which recently acquired Australand for A$2.6 billion, today announced that Bob Johnston will lead the combined Frasers Property Australia and Australand businesses; as a consequence, Guy Pahor will be stepping down as Chief Executive Officer of Frasers Property Australia. FCL had announced on 31 October 2014 the completion of the compulsory acquisition of Australand. Australand became a wholly-owned subsidiary of the Group following the compulsory acquisition.

Australand has three operating divisions, namely Residential, Commercial & Industrial and Investment Properties and has over 500 employees across Sydney, Melbourne, Perth, Adelaide and South East Queensland.

02 November 2014

Jams, higher tolls and animosity choking Singapore-Johor lifeline - November 2014

Based on the story from the link here, it seems that it is not getting better for Iskandar Malaysia to grow further without the co-operation between two governments across the borders. The recent increase of toll fees in Causeway does not help in easing the congestion, but in fact, it has actually dampened the demand of investment from Singapore, especially for those SMEs that thinking of moving to Iskandar Malaysia from Singapore. 

As a local living in Johor Bahru for more than 20 years, worked in KL for about 2 years and now working in  Singapore, I believe that it's quite hard for Malaysia government to solely focus on Iskandar Malaysia, as they would prefer to focus on Klang Valley (or Greater Kuala Lumpur) which is targeted an increased population of more than 10 million in near future. Penang as tourism hub and electrical hub would get investment from MNCs as well. So how do Iskandar Malaysia would like to position itself? 
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