Wednesday, March 21, 2018

Updates For You

I will be providing some updates of what could be happening over the next few months for TUBInvesting blog and Fundamental Scorecard.

1. Latest Corporate News

Similar to many bloggers, I am working with PRNewswire Singapore to bring you the latest corporate news.

I have specifically request only for news from US, Singapore and Hong Kong, and only with relations towards investment/finance, business and real estate.

Just simply click on the tab located at the top for the “Latest Corporate News”.

2. Coffee With Us

Many of you will have known that Simple Investor SG (Simple) and I have been conducting free Ask-Us-Anything sessions at The Star Vista food court.

In future, the event will be called “Coffee With Us”, since we tend to have drinks while we discuss about anything related to investing.

Although the turnout had not been fantastic, but we still deem the event a success because we are able to interact directly with the participants and the feedback has been positive. Many felt that it was a fruitful session with many questions answered!

Our next Coffee With Us session will be in April. Stay tuned.

3. Guide to SG Stocks 2018

Simple and I have created our 2nd book – Guide to SG Stocks 2018. This is a follow up to our 1st book – Guide to SG Stocks 2017.

Although it is just a simple book that list out details of all the counters in SGX, but our purpose is basically for readers to know more about the counters in SGX. By reading and understanding the simple details of each counter in SGX, we believe it will help investors to better locate "hidden gems" within SGX.

In addition, for our 2nd book, we have also added comments from Shi Ern (He wrote a guest post for me previously) for selected counters listed in SGX. These comments will help readers to have another view from the perspective of a quant value investor.

Click on this link to purchase a copy of the book at $8 only!

4. Fundamental Scorecard

As for the subscribers of Fundamental Scorecard, Simple and I have been thinking of doing a detailed workshop with full of discussion. We hope everyone that attend will be able to understand and use what we discuss about during the workshop.

I am also thinking of doing a full discussion workshop for The Ultimate Scorecard subscribers. I want to discuss how I use my scorecard method (I have learnt to use it a little differently!) and also every counter that passed the scorecard!

If you are interested to attend, do look into our scorecard method on our Fundamental Scorecard website now!

5. Research On The Property Market

I have also done some research on the property market lately, especially the Enbloc Sales. I have even done up an elaborated table on these Enbloc Sales. This is all due to a counter I am looking at now!

All will be revealed in the next post!

So, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote to keep in touch of the future updates!

Friday, March 16, 2018

The Value Of Chuan Hup Holdings Ltd

I have been looking for a counter to reduce my almost 30% of cash holding.

Thus, an interesting counter stands out from the list of companies in my portfolio.

That is Chuan Hup Holdings Ltd (CH).
Chuan Hup Holding Logo
Over the last few months, CH share price has been hovering around and above 30 cents. I have been thinking of adding more of CH into my portfolio and have been rather reluctant because my average share price was much lower.

However, a meet up with Simple Investor reminded me about Warren Buffett’s quote - “Price is what you pay, but Value is what you get.”

Therefore, I decided to look at the valuation of CH before deciding further. In my view, CH should be consider from a book value perspective rather than earnings or DCF perspective. This is because it act more like an investment firm due to the associate and subsidiary it has invested in. Hence, I settled on a “Sum of All Parts” calculation for CH.

From CH's 2017 annual report, it owns the following:

 - 76.17% of PCI Ltd (PCI) (Subsidiary)
 - 19.7% of Finbar Group Ltd (Finbar) (Associate)
 - 35.5% of Pacific Star Development (PSD) (Associate)

All other assets are deem to be fully owned by CH. Do note that CH also own Keyland Ayala Properties Inc (formerly known as Security Land Corporation), but this is actually located under available for sales investment. So I will not be calculating it separately.

Do also note that only PCI financials are incorporated into CH Group financials. Therefore, its asset and liabilities will be deducted from CH Group financials. Associates, which consist of only Finbar and PSD, will also be deducted from CH Group financials.

The 3 companies will be calculated separate based on their market cap.

Based on the ownership and market cap as of 16 March 2018, CH ownership of the following companies will translated into the following:

PCI – 76.17% x S$169.234 million = S$129.802 million
Finbar – 19.7% x A$223.232 million = A$43.293 million => S$44.3 million
PSD – 35.5% x S$109.925 million = S$39.023 million

Based on the CH and PCI financials ending Dec-17:

Calculation of Sum of All Parts

As per the above calculation, the value of each share is 44.8 cents.

After giving it 20% discount, CH will be valued at 35.8 cents.

I believe giving discount is important in the current market because it is still on a bull run. With so much uncertainty in the world right now, the market will be very volatile moving forward.

In Short

With all the calculation done above, I will deem each CH share to be 35.8 cents (after a 20% discount – which is the least we should do for a satisfactory margin of safety). This will be about 19% of gain based on a share price of 30 cents.

Nevertheless, it is important to note that CH is a counter that will do well in bull run and WILL FALL significantly in a bear market. Over the last 3 years, I recalled the lowest share price seem to be 23.5 cents in 2016. That will be 16.7% of loss based on a share price of 30 cents.

If you like to more if CH passed my Ultimate Scorecard or the Full Analysis Scorecard, do visit the website for more information or sign up here!

Do note that the author is vested in Chuan Hup Holdings Ltd.

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Sunday, March 11, 2018

What Gambling Reminded Me About Investing?

You may be wondering why did I, an investor, decided to discuss about gambling?

This is because I went to Genting recently for 2.5 days and I LOST about $450 in GAMBLING (Yup, I gamble as well, especially when you are in Genting and the theme parks are still in renovation). Although it may not be a lot in your eyes, but this lost was the most in my life when I gamble.

Generally I was a careful gambler. I do not bet a lot in 1 game, unless I was very certain my winning odds were high. Furthermore, in casino, I do not participate in bets being more than RM 50. I cannot withstand the thoughts of losing more BECAUSE I knew the odds were already against me. In my view, 50% of the your winning odds comes from information gathered. The other 50% comes from LUCK.

Therefore, based on the above information, I end up only playing jackpot, pontoon, 12 zodiac sign wheel of fortune (I don't really know the name), and big small.

From my experience and feeling throughout this trip, I actually realize a series of emotions and insights. I was also able to relate these experience and insights to investing. Thus, I decided to share these thoughts in the post below.

1. Casino is always the winner. 

This is especially true when it comes to jackpot. A lot of my losses came from the jackpot machine.

I realise that when you make small bets, the jackpot machine tends to give you small wins to "pull" you in. There will be once at each machine that you will be able win much more than the capital you put in. But it was never enough.

Then as you gain confidence and make bigger bets, the machine still continues to reward you regularly. It will, similarly at a single point of time, give you winnings that is able to cover your capital and maybe slightly much more. But it will not be the jackpot (the big win that you were hoping for). This will only be possible if LUCK was on your side. And believe me, getting the biggest win is possible as I saw people in the casino getting it in front of my eyes.

Investing: Mr Market is will always comes out top.

As retail investors got more gains from Mr Market in 2017, many investors believed they FOUND the magic formula. They are the guru.

But when they are not aware, Mr Market will come back to haunt you.

One of the recent example is the STI falling from about 2.2% on 7 Feb 2018 - the biggest 1 day decline in 2 years.

2. Jackpot vs Big Small

This is a comparison between Jackpot and the Big Small game.

In Jackpot, you can make a lot of small bets in a short span of time, without any extra information to increase your probability. You will continue to make the next bet without considering what you learn from the previous bet. You can only HOPE for a good outcome.

In Big Small game, you have more information to look at. There are ways to increase your probability of winning but looking at past results. From the past results, you gather information and make more informed bets.

Between the 2 games, the amount gain or loss and the time spent, in a single game of big small maybe similar to 10 games in the jackpot.

So why did I chose Jackpot over the Big Small game? If only I realise this earlier!

Investing: Having more information or data reduced your risk significantly.

As an investor, if you read the annual report of the company you intend to purchase or you are vested in, you are already having more information than 80% of the investors.

By having more knowledge about the company, you will be making a more informed decision as well as calculated risk. Although you will still be hoping that your decision is correct. But this time round, you have a higher certainty that your decision will be correct.

3. The feeling of "I am so sick of losing" could result in you making irrational decision.

During the game, there was a game of Big Small where I suddenly felt "sick of losing". Thus, I decided to use all my chips in the next round, making on a few bets - Something that I never did previously.

In the end, I lost all of the bets.

Investing: We must always keep our emotions in check.

When we invest, there will be a lot of noises trying to affect your judgement. Daily price movement will also test your emotions.

As investors, we must believe in our method as well as our initial thoughts of investing in the counter. Unless the fundamentals have changed, we have to consistently keep our emotions in check and try not to allow the noises to affect us.

That's all for this article!

It will be great for me as a reminder if I intend to go Genting again!

If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the website for more information and sign up here

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Monday, March 5, 2018

The Story of GRP, Starland and ayondo

With the recent possible IPO news of ayondo Holding AG (ayonda), there were some request on IN for me to write a post after I inform them to look at GRP Ltd (GRP) and Starland Holdings Ltd (Starland) instead.

Do note that I am vested in the 2 counters, but have only very very small holdings.

Short Background of the 3 Parties:

Very long long time ago, GRP was in the business of providing hose supplies for the marine, oil and gas industry. In fact, I believe, many years ago, it was a Net Current Asset Value (NCAV) counter.

Then in the last few years, it went into property development and acquired 83.17% of Starland Holdings Ltd in Jan 2016 (The shareholding structure changed a lot during the year. But to summarized, 83.17% is the current ownership.).

Then in June 2017, ayondo Holding AG wanted to do a RTO with Starland and also had a loan from GRP. But in Sep 2017, the RTO was called off, and GRP as well as Starland had a settlement Ayonda.

The Interesting Bit - The Settlement

As Quoted from GRP's latest half yearly report:

“…On 30 October 2017, the Company announced that it had entered into an agreement with ayondo on converting the $2.1 million loan plus accrued interest of $0.0796 million into a redeemable convertible loan ("RCL"). Under the agreement the Company has the option to elect to convert the RCL into new ordinary shares of ayondo at an agreed conversion price. The agreed conversion price is 33% discount to the IPO price. In the event that the RCL is not converted into new ordinary shares, ayondo will repay the RCL and all accrued and unpaid interest in cash. Maturity date of the RCL is 30 September 2018 or such later date to be mutually agreed between the two parties.

On 30 October 2017, Starland announced that it had agreed with ayondo to convert $0.992 million in expenses incurred by ayondo which was paid by Starland on its behalf plus accrued interest of $0.035 million into the RCL amounting to $1.027 million. In the event that the RCL is not converted into new ordinary shares, ayondo will repay the RCL and all accrued and unpaid interest in cash. Maturity date of the RCL is 30 September 2018 or such later date to be mutually agreed between the two parties.

Starland and ayondo had also agreed to issue new ordinary shares of ayondo, at an agreed conversion price of 33% discount to the IPO price, as reimbursement of $1.141 million of expenses ("Acquisition Expenses") incurred by Starland Group in connection with the Proposed Acquisition ("Conversion Settlement"). Upon the conversion of the Acquisition Expenses into new ordinary shares, ayondo shall be released and discharged from any and all further payment obligations in respect of the Acquisition Expenses. In the event that the IPO does not occur prior to 30 September 2018, the Conversion Settlement shall cease and ayondo will not be required to reimburse Starland for the Acquisition Expenses…”

Other Reasons Why I Choose GRP and Starland?

1. Both of them are NCAV Counter. Both have high cash amount with low debt.

2. Starland just turned profitable and is intending to give out dividend on a later date as per their latest report.

3. GRP is growing and expanding in Singapore and Malaysia as well.

4. GRP have links with Luminor Capital Pte Ltd through his Executive Director, Kwan Chee Seng.

In Short

I am vested in GRP and then Starland. But due to their illiquid volume, I only held a very small holding. If you are interested, you should do more of your own due diligence prior to purchasing any of the above counter.

For subscribers of Fundamental Scorecard, it will be good to look at my scorecard prior to investing!

If you are interested to understand more about our scorecard method and theories, do come for our upcoming FREE AUA on 6 March 2018.

If not, you can also sign up directly at our Fundamental Scorecard website to gain access to over 500 scorecard reports!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

Thursday, March 1, 2018

Singtel, M1 and Starhub – Which Should I Invest In?

Once the darlings of many of the Singapore retail investors for their defensive nature and high dividend yield, telco counters’ share price had come down drastically after the announcement of the 4th Telco.

Market share of these 3 incumbent telco counters are further reduced by the introduction of Mobile Virtual Network Operator (MVNO), Circle Life, Zero Mobile, Zero1 and maybe MyRepublic.

However, being a believer of value investing and contrarian investing and maybe moat investing, I still believe that every counter does have a fair price.

When the negativity of a counter is at its highest, when no one talks about it anymore, when the share price has been stagnant for a long time, the bottom could possibility been reached. I believe that is when one should pounced on the counter.

However, these 3 counters are currently trading at their multi-year low share price. Which one should I choose?

Rather than assets, my opinion is these Telco should be measured by their ability to generate earnings and their FCF generation.

Based on my Scorecard criteria for the 3 Telco:
Based on the latest share price
*Do note that FCF is based on an average of 5 years.
**Earnings is based on the trailing twelve months.

As per the selected scorecard criteria, I will have preferred to invest in M1. Although Singtel has the lowest PE ratio among the 3 Telco, but this is most probably due to their huge earning gain in the IPO of Netlink Trust.

To enhance my view on M1, I had previous written extensively on the change in direction of M1 business. Their first mover advantage in the IoT business (among the telcos) should be able to compensate their drop in earnings in this traditional telco business space.

Do note that the author is vested in M1 and Singtel.

If you are interested to understand more about our scorecard method and theories, do come for our upcoming FREE AUA on 6 March 2018.

If not, you can also sign up directly at our Fundamental Scorecard website to gain access to over 500 scorecard reports!

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.