Thursday, January 26, 2017

CDLHT - Q4 FY2016 Results & Thoughts

This is one of my biggest holding position so I thought I should write my thoughts on their latest results.

If you just browse through their results on a glance, you should see flat results for Q4 thinking that they are doing better. They are actually not and the same issues surrounding the Singapore and Maldives market continue to languish them low. Having said that, I do see some stability in their ARR and Revpar and my thesis remains that the next few years supply for the Singapore (major) market are trending lower at 3.4% than previously known.

I'll try to dissect them through the several markets they have presence in.

On the Singapore market, Revpar continues to hit record low of $154 (The last low over the past 10 years is $149 during GFC days) and we have not seen a reversal of the bottom just yet. I wrote in my last article (Link Here) that I am predicting this to bottom out and a reversal over the next couple of quarters ahead. My thesis still remains.


On the Maldives market, while tourism arrival is growing well over the past couple of years and is expected to reach 2m customers a year by 2020, the strengthening of the USD and corresponding room rates downwards adjustment means that NPI for the quarter is down.

Personally, I feel it's a bit disappointing because they had intended to venture out of the Singapore market and go into Maldives but face similar troubles in this market. If not for the minimum guaranteed income provided for the Angsana Velavaru resort, the NPI registered would have been a lot lower.


If there are any positives coming out of the news, it is that the Japan market seems to be reversing out and will continue to outperform in the next 3 years.

The Japan tourism board is running an initiatives to boost tourism growth and the recent approval of the integrated resorts will help to boost tourism growth in the industry.

Between now to 2020, tourism growth is expected to grow at a CAGR of 13.6%. This coincides with the 2020 Olympic which Japan is hosting and the boost in the next 3 years will help the Japan market immensely.


The other positive news is coming out of the New Zealand market.

They changed the lease structure to include a variable component now on top of the lower fixed rent. This means that if the hotel is doing well, then we should see a much improvement in the variable rent. This is what happened as NPI doubled after the changes.

New Zealand

Final Thoughts

2H16 DPU is at 5.55 cents and will be paid in February.

Full year dividend is at 10 cents and at current market price it translates into 7.1% yield which I thought its decent.

Even though there are some persistent headwinds and the incoming threat from Airbnb alike, I think valuations have reflected the headwinds and we should see stronger performance in the years ahead.

The share price is up 2.2% today after the release of the results today, which I think represents the general bullishness of the market from the public quite unwarranted.

Tuesday, January 24, 2017

Eminence Cufflinks - Dress For Success

I don't usually shop much these days, unlike in the past where I often drew up my wardrobe full of nice shirts and pants and planned onto what to wear for each days of the week.

The few things I do still have a weak spot on however is accessories and this covers the likes of belts, watches and cufflinks.

A few days ago, the Marketing Director from Eminence Cufflinks ( approached me to review their products and I obliged by asking them for a few samples and have them worn going to work.

They have many different designs which appeals to the mass and also some very specific designs which was interesting.

Iron Man Design

Lego Design

Heterodoxe Design

DarthVader Design

Hermes Design

Since Valentine's coming, why not do visit and gift your loved ones something nice to share about.

They do shipping and returns guarantee for 7 days if you are not satisfied with the product.

Friday, January 20, 2017

My Career Story - Past, Now & Future

For the past 6 years I have been blogging, I have not really talked about how I transition my career growth from one to the next.

It is not because that I had purposefully avoided them, but rather there is no impending urge to think and reflect about how I had transitioned from each stage to the next.

I had mentioned several times in my post about how important human capital is in the journey towards financial independence and they are part of the important equation to reaching that stage.

A good friend of mine and a fellow blogger, Chris (author of Re-ThinkWealth) recently shared an article with resonates with what I've gone through from each stage of my career journey - beginning to now.

In the article, the writer shared about his own experience in his 19 years in the IT industry and what he believes to be the optimal position to take as an employee. In this article, I am going to try and define the pace according to my experience.

There are many different type of characters that we see and worked with throughout our career lifespan. Some are unique, some are interesting but for the most part they are fascinating. Here, I am going to just group them in general terms.

Different Type of Employees

1.) The Gung-Ho Style (The "Outperformers")

These are the type of employees which are typically motivated by personal self-drive and competition.

They do not like to sit idle or achieve targets without purpose and are always going for the win.

Because of the commitment they promised to achieve to themselves, they typically work overtime beyond the normal working hours and at the end of the year, they clocked in many unutilized leave and/or time-off hours without knowing when they are available to take them.

Verdict: At the earlier stage of my career and when I was still single, this is the kind of approach I took to accelerate my career in the first few years. While the promotion at the end of the year was beyond my control, it was more of the self-drive and motivation that pushes me through these unwarranted but important stage of my career. 

Until this date, they become the backbone to which I had pushed myself to the limit, giving myself a chance for "delayed gratification" at a later stage when I knew I was going to settle down and slow down the pace of my career.

2.) The 9-to-6 Style (The "On Timers")

These are the type of employees which goes to work on time and goes home right on the dot, no more and no less.

While it is not impossible to achieve, they are often not the "star performer" of the company as the society bends on giving the award more to those that devotes extra time and efforts beyond. Special mention on the word extra and beyond here.

They are usually either family oriented or have activities that they would like to engage outside of work after working hours. Because of this, it is imperative that they only work according to what's set in the employment contract, and are agreed upon at the start. If the boss makes them work 30 min late, you'll often hear complaints from them, though they are generally harmless in nature.

Verdict: I am at this stage of my career where I demand stability and the "on-timers" because of family commitment mainly. I do still bring my laptop home and work from home after working hours as and when I needed to but they are often only activated if the matters are truly urgent in nature.

My other activities after working hours include spending quality time with family, vacationing, reading, analyzing my investment, writing this blog, watching my favorite US and Mediacorp drama and many more...

This is usually the stage where I no longer achieve that "promotion" status at work year after year anymore and I settle down with what I think I optimally can achieve, both inside and outside of work.

3.) The Flexible Style  (The "Part-Timers")

These are employees which tend to come in early and leave early or come in late and leave late. Either way, they have a flexible working pattern due to certain commitment that they have outside of work.

Some may also choose to work as part-timers for half a day if their working environment allows. These are usually position which are not critical to the daily business operation of the company and their roles allow them to work flexibly in different timezone.

Verdict: This is definitely something which I want to venture out to in the next 3 to 5 years. My current role doesn't seem able to fit in the part-timers role but it can be flexible if we try to work things out. My ideal is to eventually go for a 4-day work week so I'll but we'll have to see more about that.

Final Thoughts

There are obviously no right or wrong in these decisions. 

These are just some of the simple sharing which I had experienced and envisioned it to be in the coming years. 

The goal was always to start off very strongly during the early stage and set up a good base, then slowly stepped off the gas on the corporate ladder once there are other priorities that set into my life. This doesn't necessarily mean that you are slowing it down, but it means that you are stepping on in some other priorities in your life.

Don't let hard work refrain you from pushing beyond what you are capable of. You may be surprised by what you are more than capable of.

Saturday, January 14, 2017

"Jan 17" - SG Transactions & Portfolio Update"‏

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
CDL Hospitality Trust
Ireit Global
Fraser Logistic Trust
Lippo Mall Trust
ST Engineering
Sabana Reit
First Reit
Total SGD

This is the first update of the the beginning of the new year.

Since the start of the month, the market has been on a tear run over the last couple of weeks, sending the STI up and well over the 3,000 mark. When the market is up, there's obviously lesser compelling things to buy so I have to look for opportunities harder. If any, it would be to lock in some of the gains first. My strategy is always having the intention to hold them for long term, but if Mr Market is offering me a good 10% gains in the short term, I'll lock it in first.

There's a few changes that I've made towards the end of Dec last year since the last portfolio update.

First, I've divested all my position in Ascott Reit at $1.135 and use the same proceeds to add onto my existing position in CDLHT by adding them more at $1.305. This is a direct hospitality switch as I've made my intention to divest Ascott for the longest time ever. With this, CDLHT has now become my largest position and it has not disappoint in recent weeks.

Next, I also divested all my position in Spackman at $0.193, given the good short term gains after one of the catalyst is played out and I have used the same proceeds to buy Lippo Mall Indonesian Retail Trust (LMIRT) at $0.37 which I blogged over here.

In the early month of January, I also identified a good opportunity in Sabana Reit and hence bought them at a price of $0.34. I have blogged about my purchase here in my previous post so I will not repeat much here.

In the past week, I have also taken the chance to lock in some of the gains in OCBC and M1 by divesting them respectively at $9.34 and $2.10. The divestment in M1 is partial since I have several batch which I've bought over the past month. I am still holding 10,000 shares of M1 after divesting.

Net Worth Portfolio (Jan 2017)

The portfolio continued to benefit from the market run up in recent week as it closes once again at a personal new record high of $488,260 (+2.7% month on month; +41.3% year on year; this includes capital injection, dividend reinvested and capital gain unrealized).

As a result of a few divestment, the cash portion has also increased to about 30%. This is a comfortable level of cash holding at this point and should the market continues to go up further, I'd be sure to increase this part of the cash portion even higher.

Dividends (Jan 2017)

I had received my first batch of dividend for 2017 on the 11th Jan for Singtel of $204 (3,000 shares of $68). It's a good start.

More to come on the Feb month which I am looking forward to.

Other Investment

Some people call this speculating or betting.

For those who knows me well, they would know that I call this an investment. This means that like any stock purchase, I made a conscious decision to weigh the risk and the reward and if the returns (and probability) is in my favor, I would initiate a position in it. Nothing much difference from what I do here and what I've been doing all along.

My Bet with Singapore Pools

I've initiated a position in Chelsea FC to win the EPL by the end of May. I bought them towards the end of Dec at an odds of 1.65 and added them further in recent week after their historic run was brought to an end.

I've made this investment my sunk cost, so I've written everything off here mentally in case things does not work out. I think this is the right approach one should take if they are going into the casino and doing all these stuff.

If they work out well, I'd be getting a massive lump sum proceeds in May. This would be a wild card for my aim to end the year with a stretch target of $600k by year end.


I am prepping myself up to be extremely busy over the next couple of months.

This is due to the incoming 2nd baby by the end of this month and thereafter I'll have a lot of work and roles to do, both home and at work. With this, I do foresee a significant drop in involvement in both blogging and social meetup with fellow bloggers and peers.

I'd have to see how this works out before I can feel things out more appropriately.

Other than that, wishing everyone a good start to the new year and keep streaming ahead.

Monday, January 9, 2017

Recent Action - Sabana Reit

I made my first transaction for 2017 that I've monitored for quite some time.

Sabana Reit is probably one of the most hated Reits in the whole universe of S-reits at the moment. And they are rightfully so. Investors who has been with them since the IPO has seen the share price go up to as high as $1.3+ before plunging all the way down to today's post-rights price of around $0.34.

I was waiting and observing and waiting further to get this real cheap and I finally managed to get them today after queuing for the stock on a GTD basis since last Friday.

I managed to purchase 30,000 shares of Sabana Reit at a price of $0.34

Reasons Why I'm Buying

1.) This is a classic example of buying a company at a cheap price. To me at least, I find it compelling enough to add this to my portfolio.

Pre-rights - Equity is at $596m, while outstanding shares is at 778m. Divide them and you get the NAV of about $0.766.

Post-rights - Equity raised about $80.2m, so new equity will be at $676m, while outstanding shares will increase by about 310m to 1,088m. Divide them and you get the NAV of about $0.62.

They are using the funds to buy the 3 properties which is near or slightly less their market valuation, so that will not help the NAV by much unless industrial sector recover as a whole.

Buying them at my purchase price would mean that I'm buying them at 45% discount to their book value. That gives me sort of margin safety. They have proven that in some cases, they are still able to divest their industrial properties at market valuation. That's a relief for the industries as a whole.

2.) Dividend yield is also compelling. I'm talking about sustainable dividend yield here.

The management did not guide whether the acquisitions via rights will be accretive in nature, but a quick guess should be it's not.

Pre-rights TTM DPU is at $0.0477 while I'm expecting a 15% impact to the DPU for post-rights to come at $0.04 since they are on master lease and they provide more visibility in terms of lease renewal.

The property in Eunos comes with income support for 5 years while the property in Changi comes with income support for 3 years.

Based on the current share price I bought, it provides an earnings yield of 11.7%. Since they are distributing 100% of their earnings via cashflow method, that would constitute a dividend yield of around 11.7%. That's pretty good to me in terms of dividend yield.

3.) Gearing has come down as a result of this financing from pre-rights of 41.5% to around 39% post-rights issue.

4.) There's a strategy to getting the mother share of a Reit that asks for rights issue that are not accretive.

First level plunge - This is the usual normal plunge once rights issues are announced because investors are typically not perceptive to put more cash into an existing "lousy" stock.

Second level plunge - This plunge is made worse if investors can ascertain that the funds used for the acquisitions are not accretive. This usually happens when the mother share is trending down and is typically a bad idea to raise cash via rights. This is when the bulk of investors holding the mother share are all dumping their stocks, sending a spiral wave together with the short seller. As investors, we should still wait for more meats to come. We should never try to buy the mother share and apply for excess rights here because the game for that 1,000 vs 100 shares are now no longer favorable to investors.

Third level plunge - This plunge is when the mother share goes ex-rights and the rights start trading on the market. Typically, we are left with investors who just want to hold on to their battered mother share but doesn't want any further involvement with the rights, so they are selling the rights. The rights get sold cheaper which means that the mother share would continue to go down, otherwise there would be arbitrage opportunity.

Finally, if you are still crazy enough wanting to go in like me, this is when you get in - Monitor the rights trading for a few days, and the mother share price will stabilize at some point. To me, this is the best opportunity because all the crap has hit the fans and has happened, so the bulk of the news is over. 

This is also when I start buying them, when no one bothers to look at it and the news has died down.

My call is that at $0.335/$0.34, the share price has stabilized and bottomed and that's where the risk reward would come into play.

Unless there's new development or news that has not come into play yet, I don't think it'll drop much further, supported by their fundamentals (someone asked me if Sabana still has fundamentals, lol).

I decide to give the management another chance to repent and atone to make it better.

Friday, January 6, 2017

2nd Chance Properties On Issuance of Bonus Warrants

The management of 2nd Chance Properties announced a proposed bonus issue of free warrants on the basis of One bonus Warrant for every One existing ordinary share to the shareholders.

The size of the bonus warrants issued is as much as the paid-up share capital of the company, which is currently at 755,396,152. The enlarged capital would immediately be double of that size should all the proposed warrants is exercised.

The exercise price of the warrants is specified at $0.25, which is not far away from the current market share price of around $0.23.

I wrote a few articles on 2nd Chance previously (Link Here) and warned on their method of financial engineering.

This proposed warrants is a "replacement" of the current existing warrants at $0.40 which is expected to expiry on 24th Jul 2017.

To me, it looks like the goal of the management is to do this:

Borrow money -> Issue high dividends -> Push up share price -> Issue Warrants -> Enlarged share base -> Conversion money used to repay borrowings.

The management seemed confident that the conversion at the exercise price will take place so they went ahead to increase their gearing meanwhile.

Not sure to me but it seems that the management is sort of putting a cap on the existing share price to $0.25 on the enlarged share base. If I am buying the company after the warrants proposed issuance at a price higher than $0.25, I'd see a wave of enlarged share base of capital coming in which dilutes my holdings as a new shareholder. If I am an existing shareholder looking to hold this for a long term, I better make sure that I am entitled to this bonus warrants so I could hold the wild key of potentially not being diluted since it remains the same for existing shareholders.

Always a good case study on financial engineering.

Thursday, January 5, 2017

Sniffing Opportunities in 2017

The market has only been trading for about 3 days since we enter 2017 and it has been on a strong run upwards.

The STI for instance, has increased by about 70 points for the last 3 days and it looks like it will continue to surge higher upwards. They are still reasonably cheap by historical standards and it does looks like valuation will revert back to the mean even when gdp and earnings expectations for 2017 are not going to be fantastic.

It appears that 2017 will be a period of slow growth when various sectors are still uncertain about what are they trying to expect from the economy. In Singapore, growth is going to slow down over the next couple of years and it'll be interesting to see how the government is going to steer the monetary policy comes budget next month.

It feels to me a bit like the market has taken a bit of complacency here since Trump won the US election. From an extreme gloom scenarios before that, positive news and optimism seem to surround the market these days with headlines hitting investors who are left behind chasing the market. This is the definitely the catalyst start for the next correction / recession in the stock market, when valuations go up faster than the earnings or expectations.

I try not to bet on predictions and this is the same reason why I've been on the market one way or another. At the moment, my holdings in equities stand at 70%, which is a good allocation in my view. The rest of the 30% can be used to pounce on opportunities should they arise.

During this period where we are unable to spot any compelling opportunities, it is important not to get into the head thinking of trying to strike every single bat. It pays off sometimes to be patience and quiet on the transactions and not be forced into making a mediocre transactions. This is something I've been constantly reminding myself everyday.

Meanwhile, it is important to continue to follow the progress of the company we are vested or interested in and continuously preparing for extensive research even during moments where there are nothing to buy.

A one-off impactful scenario will easily create an irrational panic scene where we will see fear in the market and that's where the big money is laying on the floor for us to swipe.

Being able to insulate our thoughts and emotions from herd investing allows us to think calmly and deeper into our strategies and revisit them again when the temptation to deviate is near to us.