Thursday, December 31, 2020

5 SGX Listed Growth Stocks To Look Out For 2021

As we are approaching the final days to end this year, and with much anticipated recovery in the market in 2021, we'll take a look at some of the growth stocks that might continue to outperform as they staged the next phase of growth in their businesses and expansion plan.


1.) Frencken Group Limited (SGX: E28)

Frencken Group is a global integrated technology solutions company that serves worldwide companies in the automotive, healthcare, industrial, analytical & life sciences, and semiconductor industries.

The company is currently on a momentum run with increasing demand, better margins mix, and increasing profile due to the proliferation of rising semi-conductor demand worldwide. 


The company's share price ended the year at $1.32, rising by more than 30% this year amidst a challenging pandemic year.

The company's latest financial result for Q3FY20 took them to over $13m in profit with better gross margin and higher ROE.

The current valuation has reflected a 13x forward PER which is not excessive given the strong positive momentum going into 2021.

Outlook for FY2021 remains bright with accelerating demand for the 5G technology.

Nevertheless, investors might want to caution that the company will be recognizing a one-off impairment charge of $6.2m in the second half of the financial results due to the strategic change of the US MNC customer they are dealing with. This will impact the bottom line of the Group's financial results in the second half, but the impairment is a non-cash exceptional item.


2.) Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)

Yangzijiang shares have been under pressure lately due to the rebalancing of the MSCI on the 30th November which leads to rotational funds from institutional. 


However, the company has done exceptionally well this year amidst a challenging pandemic outbreak by securing a total of USD 1.8 billion contracts. The latest win announced on the 30th December 2020, was a new order for two 24,000 TEU containerships worth USD350m.

The recent successful delivery of the six Valemax iron ore carriers also puts them on the global map as one of the top dry bulkers providers globally.

Given the positive momentum for global recovery, this will put Yangjiziang as one of the leading growth stocks to outperform in 2021.

While the company has somewhat struggled to regain its valuation before the Covid, the company has been aggressively buying back shares in the past few months. Cumulatively to date, the company has bought back 65m outstanding shares worth close to $64million. This represents 1.67% of the overall outstanding shares the company has bought back to date.

The company is currently trading at an earnings yield of about 14% (7x PER) with a dividend yield of around 5%. It has also dished out consistent dividends over the past 13 years since its public listing in 2007 with a payout ratio of between 30-40% of its earnings.



3.) Credit Bureau Asia Limited (SGX: TCU)

CBA is a relatively new player in the SGX market as it just went public a month ago.

I reviewed the prospectus listing prior to the IPO here.

In the article, I highlighted about the company's strong cashflow generating ability and its high cash conversion ratio where they had improved quite considerably from FY2017 to IHFY20. From FY2017 to 1HFY20, the Group net operating cashflow was $10.9m, $12.0m, $19.8m, and $10.8m respectively, which translates into a cash conversion ratio of 69.7%, 72.6%, 85.0%, and 83.3%.

In FY2021, the Group had a clear trajectory plan to drive the business in Singapore for organic growth by making preparations to provide the corporate credit reporting through CBS under the commercial bureau operator  license which the Group intends to apply. This will provide a good amount of synergies to its existing consumer credit reporting volume which focuses more on B2C.

The Group also has plans to penetrate the other Asian market, Cambodia and Myanmar by providing credit product offerings and consultancy services in these markets.

Despite the lofty valuations at FY20 30x PER, the share price has continued to go up by more than 30% to end the year at $1.31, since its IPO last month at 93 cents.


4.) Propnex Limited (SGX: OYY)

Contrary to what many people think will be a challenging year for properties and agencies in FY2021, Propnex Limited actually did very well amidst the challenge of a circuit breaker and lockdown in the earlier part of 2020.

Based on the Q3FY2020 URA data, overall private home prices have risen 0.8% in 3Q2020 on consecutive quarterly increase. Total private residential transactions jumped by 164.5% quarter on quarter after a brief lockdown in Q2.

The demand for housing is mainly driven by the relatively low new supply from developers and the low interest rates environment. 

The Group has also benefited from online and new digital innovations through targeted marketing through virtual property expo as well as virtual showflat, which makes it easier for potential buyers to get a full view without having to physically wait for their turns.

The Group will continue to drive for technological digital innovations in a bid to reach for more masses with better productivity, which would enhance the overall Group's profitability.


5.) Hotung Investment Holdings Limited (SGX: BLS)

Hotung Investment Holdings is a premier venture capitalist investment group that looks for promising businesses to invest and deliver returns to its shareholders.

On the last trading day of 2020, Hotung shares broke out from its previous Jun high of $1.64 to close the day on the high at $1.69.


The company has done well in the past few years delivering solid returns to its shareholders in the form of both capital gain and decent dividend payouts.

The current allocation portfolio in terms of industries are dominated by software companies related (31.7%), followed by Investment companies (29.7%), then Automotive and Cloud Services at 10.4% each.

The theme for the near term is to look for investment in the start-up tech ecosystem with the company mentioning online education and shopping, home entertainment, and fitness experience being one of their investment thesis.

The Group remained debt free with healthy cash balances and are ready to look for the next opportunity.


All the above information and numbers are directly extracted from ShareInvestor Webpro platform, which gives a one-stop convenient information of all the financials and news of the companies in one view. If you are interested to learn more, do sign-up at the link here with my coupon code "SG3FFF" for a $10 rebates off your premium purchase.

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Sunday, December 27, 2020

Summary of FY2020 Journey & Reflections

In a few days' time, we'll enter the new year of 2021.

Time passes by in a blink of an eye especially when you spend most of your time at home, hustling in and out like there's no difference between yesterday, today and tomorrow.

Let's get down to it.

Career

I wouldn't rate this year as one of the highlights of my career.

I started off the year unemployed in the first two months, before finally settling for a role nearer to the end of February.

When Covid came soon after that, we began to downsize our office rental space to a smaller count and many of us transitioned to life working from home ever since. While there was an initial excitement over not having to commute for work in the beginning, it soon becomes a toil as meetings over Zoom and Google Hangout become prevalent over the course of the week. Soon, it was just meeting after meeting and it would drain and capacitate my energy level.

Towards the peak of Covid, the company managed to survive the catastrophe despite the big hit by retaining almost all employees but we had to take a hit to our pay of 30% cut for almost 3 months. We knew it wasn't a pleasant experience to have but we were not the only ones. In fact, almost the entire world is feeling the heat.

The company didn't have a common practice of replacing a leaving headcount immediately so many of us were asked to double head the role of the person who left until employees voluntarily sounded out that they were burnt out. I didn't like the practice very much and I was a victim of the same, which to a point it strained my working relationship with my immediate boss and it didn't feel good.

It also validates my belief on financial independence even stronger that most companies are still at the end of the day looking out for their own interests more than they look after the interests of their employees.

Writing

This year, I've written a total of 78 articles (including this one) which coincides with the lowest count in the past 10 years.

The occurrence of lesser writing was due to more time and energy spent on the job, which takes the toll out of my energy and focus area to write on the weekends or after work.

I also had a lesser opportunity this year to write more research and analysis on companies that I was eyeing and bought because it takes time to consolidate all the information and thoughts I have on hand, let alone writing them on a proper channel. Still, I hope to get things back on track in FY2021 with some changes in my work and probably lifestyle, so hopefully, I'll get back to the gist of writing an analysis on companies again.

Investment Strategies

This is the year I've tried out a couple of different platforms and investment strategies to try out and see which one fits my needs.

I started to use Tiger Brokers as my primary source for keeping HK and US stocks for the long term. They are also my immediate source for keeping tabs on all the information sources of the company such as earnings calendar, dividends history, and price movement.

I had also tried out options play with Interactive Brokers under the tutelage of my good friend and a couple of self-learn resources. I wanted to compliment some of the strategies and ideas I had with my direct leveraged (CFD) and the options play gave a good platform to do that.

For my long term portfolio consisting of dividend companies and Reits, I kept them in my CDP which I intended to keep for a longer term (less trading).

Networth

I started to focus a lot more on growing my networth this year rather than the actual return from investment.

This is also the year where I lost count midway of how much I put in and how much return I get from each strategy that I adopted so I went with focusing on the bottomline which is networth growth.

While this has been a skewed year in terms of investment, the following year will look to be more difficult as we move into normalization. The goal is to identify opportunities in the market as much as possible and putting in substantial amount of capital into the position.

Dividends payout is also likely to resume back in FY2021 so I am looking forward to that as well.


Family

Working from home this year means I get to spend additional time with my wife and kids as I get to see them more often.

I realized I am after all not a "house husband" type of person. I think there's a few instances where I ran out of patience trying to educate my kids the way I wanted them to be. After a while, I realized I didn't quite fit that role.

I missed my parents.

They are back in Jakarta and the Covid situation this year means I didn't get to see them for the large part of this year except through a video conference call which can get quite repetitive after a while. One thing I realised about video conference is you miss that connection you had when you are physically together.

I hope once the Covid situation is over I can go back and get to spend more time with them.

Health

Health improved this year as well as I took a comprehensive test at a GP recently and found my liver and cholestrol levels improved considerably as opposed to the test I took three years ago.

While I still definitely need to work on my routine on the exercise part, I am happy to be able to avoid getting sick (and more importantly avoid getting hit by Covid) and will look out to improve my overall condition better.

Conclusion

Overall, every aspect seem to fall in pieces quite nicely this year.

However, I can't help but feel there is something missing among all the things I've listed.

It's an empty feeling that I can't really point out to and it is probably the first time in so many years I've ever felt that coming in stronger, especially this year.

I am unsure if that feeling is because of the drained energy I consumed because of my work, or it is due to that I didn't get to see my parents for a long time now. The growing of networth and income trajectory are also starting to become a little more secondary in nature as time goes by.

Perhaps, I am at that juncture where I need not only physical rest but also mentally so that I could think clearer and act with more confidence.

To all the readers out there, I would like to use this opportunity to thank everyone for their support (regardless of which state I am in) and wish everyone a very healthy year ahead.

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Sunday, December 20, 2020

The Jubilation and Tribulations of Moving House

We are finally moving to our place permanently this week right before Christmas after we bought our house last year but didn't get to move in due to the Covid situation.

We are currently (temporarily) crashing at our parents in law place during the entire period of Covid which we have gotten used to the surrounding in the past 12 months so we feel pretty sad about leaving but at the same time, we feel excited about moving into a new environment and area which would allow us to roam and explore.

We managed to rent out our place during the interim of Covid for a total of 9-10 months to a fellow Singaporean family who had to seek a temporary shelter also due to Covid that forces most renovation to be suspended back then.

We scored some rental income for a few months while they scored a temporary place where they could crash until their renovation is completed.

I see that as a win-win for both parties.

The other reason why we are choosing to move at this time is also that we have used our new address for the primary registration based on the distance category and we have to fulfill that requirement before school starts in a couple of days' time.

Moving D-Day Countdown

Moving is among one of the most stressful events simply because there are just so many things to pack and unpack - that's when we realized we should have heeded Marie Kondo's advice but the realization is too late by the time we noticed just how many craps we have stored all these time.

There is also other logistical preparation such as informing both sides of the management (sometimes they have loaded maximum capacity for the day, so we can only choose for other days), and then there's the mover which we have to liaise with.

There is also the reinstallation of the internet broadband and utilities, amongst other things to consider.

Change is also not always easy to deal with and adapt to, especially when you live with young children who have to adapt to a new environment, go to a different school, and meet a new friend.

While our elder son is enrolling in a new school (the primary one) anyway, the younger one had to change his kindergarten school to somewhere that's nearer to home. There'll be two rounds each of the new schools, new uniforms, new teachers, new parents chatgroup, new orientation, etc that we have to complete before school starts in January.

Where We Are Moving To

We bought a resale private condominium in district 4 for those who are curious where we are moving to.

We have previously stayed for the large part of our post-marriage years at the central area, before moving to stay at our parents in law place which is a bit more towards the dempsey area. We had previously considered on areas where we were more familiar with but because of the affordability we decided to venture a bit into the south.

Who knows what could happen next, we might be moving again depending on circumstances in the next few years.

Renovation

We didn't spend a lot on renovation this time round as we had bought a resale.

There was also no intention to spend a huge chunk on the renovation as we wanted a simple home that we could live comfortably.

I'll share a little bit more about where we bought our furniture and why we chose them so once we have furnished and cleaned up the house after we move in.

Our renovation is mainly spent on the parquet wood varnishing and replacement of the window ledge, window grills, changing of balcony ceramics, painting, and hacking of the fixed fittings for the master bedroom bed.

If anyone of you is interested in looking for a reliable contractor for your own home, you may DM contact me. I have been using him for all my renovation and other home works, including pipes, hacking of bathtub, electrical wiring, ceiling wall, water piping, and leaking for the past 5 years. He is basically my go-to person when there are issues with the house.

Did Valuation Drop?

I think one question which many readers are curious, including myself honestly, is whether we could get a better deal had we bought our home this year during the pandemic rather than last year before the pandemic.

I was also curious myself so I checked three times - one during the onset of the pandemic back in March, another time in June, and the latest one just last week in December.

There was only one occasion back during the depth of the pandemic in March where I could find a similar deal like the one I had last year. In the other two instances, many of the prices that are displayed are higher (or they are at a similar price PSF but at lower floors). During the depth of the pandemic back in March, I also found a rather good deal that was within my ability to finance in one of the District 10, but that quickly snapped away.

In other words, sentiments towards property play are still strong and there are still many buyers lurking around for deals. If you don't believe it, just head down and look at the recent new development deal demand at The Linq (Beauty World).

I think the low-interest rates environment we are in today has a lot of roles to play here.

Conclusion

I'll share a bit more after we have moved and settled in at our new place and surroundings.

Personally, we are pretty excited about moving in and are continuing to explore areas which we can go for breakfast, supper, and even exercise.

I'll be looking forward to a new 2021 and we hope the world is in a better condition and place to live in once 2021 kicks in a couple of days' time.

Signing out for now.

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Saturday, December 19, 2020

Dec 2020 - Portfolio & Transaction Updates

No.

 Counters

No. of Shares

Market Price (SGD)

Total Value (SGD) based on market price

Allocation %

Category

1.

Jardine C&C

    5,000

S$19.95

     99,750.00

20.0%

Recovery

2.

Lendlease Reit

  85,000

S$0.74

     62,900.00

13.0%

Dividend

3.

Manulife Reit

  60,000

US$0.74

     59,490.00

12.0%

Dividend

4.

Comfortdelgro

  30,000

S$1.71

     51,300.00

11.0%

Recovery

5.

Starhill Reit

  90,000

S$0.50

     45,000.00

10.0%

Dividend

6.

Ascendas Reit

  12,000

S$2.99

     35,880.00

9.0%

Dividend

7.

Prime US Reit

  30,100

US$0.80

     32,260.00

8.0%

Dividend

8.

Yuexiu Trans. (HK)

  27,000

HK$4.76

     22,540.00

6.0%

Dividend

9.

JD (HK)

       400

HK$320

     22,450.00

6.0%

Compounders

10.

Bank of China (HK)

  30,000

HK2.59

     13,630.00

3.0%

Dividend

11.

Tencent (HK)

       100

HK$580

     10,170.00

3.0%

Compounders

12.

Alibaba (HK)

       200

HK$255

       8,940.00

3.0%

Compounders

13.

GA Pack (HK)

    9,000

HK4.28

       6,760.00

2.0%

Dividend

14.

Ho Bee Land

       300

S$2.38

          710.00

1.0%

Leftover

15.

Warchest

  

-

     20,000.00

6.0%

 

 

 

 

 

 

 

 

Less:

CFD@3.2%

 

 

(180,000.00)

 

 

 

 

 

 

 

 

 

Total

 

 

 

   311,780.00

100%

100%

Let's proceed ahead with the final updates for the month to end the year.

December has been an excellent month for the portfolio, as the market continues to price in recovery which benefits most of the golden seeds planted earlier in the season.

The portfolio benefited from signs of recovery and I continue to actively monitor and balance them accordingly to the laggards and those which I think present an enticing play at the moment.


First Update - I have trimmed down my position in Comfortdelgro by about slightly more than half the position. It was the top position in the previous month with 80,000 shareholdings and I managed to trim it down to 30,000 shares left after the shares went for a spiked up sometime in the last week of November (which coincides with my staycation when we were enjoying ourselves at the Hilton hotel). I sold two batches at $1.70 and $1.78 respectively.

I have also offloaded my banks position for both OCBC and Bank of America at a gain of 8% and 17% respectively. Again, I was planning with the intention of buying back at a lower price but with the latest news that the FED has allows share buyback to resume again for US banks look like this is a miss for me to have sold it too early.

I took this opportunity to load for more Jardine Cycle & Carriage, which is a laggard recovery play in my view. I added back a lot more during the time when Jardine C&C was down by more than 6% if I recall due to the last trading day of the constituent of the STI, which suffered an unwarranted sell-off in my view given the current situation. I posted an article and notified this in our Facebook Page so do follow us there for more frequent updates on some of the situation or positions which I took. 

The domestic automotive market situation in Indonesia is still in recovery mode and I strongly believe this will be a really good value play that will pay off coming into 2021. I'll continue to add on to the position for as long as the price stays below $20. You may refer to the latest November statistics article here.

I have also taken this opportunity to double up my position for Ascendas Reit, which I initiated a position last month when the offering was announced. This month, Ascendas Reit continues to see weakness which I thought is likely to be temporary. It is still giving a decent forward yield of around 5.3%, and it is incredibly difficult to find a good yield these days, so I'd consider it decent and have added it for dividend play.

Thank you Ascendas :D

I have also added the US office Reits for Prime Reit as well as Manulife Reit respectively for dividend plays. In a world where the situation for finding yield is incredibly difficult, both Prime Reit and Manulife Reit are still dishing out 9% and 8% forward dividend yield respectively which I thought it was decent. While there are some valid concerns over the entire office landscape situation post-Covid, I think the demand in the US will continue to be strong in certain states and they are unlikely to evolve as quickly as we thought it would be. Also, these Reits have strong Asset A-Grade and Trophy Class offices so at least it gives a good margin of safety from there.

If anyone of you knows or could recommend a decent solid dividend play company, please do recommend it to me in the comments below, or you can connect to me in my email. I'd be more than willing to exchange views.

Last but not least, I have also added back my position in some of the HK Tech companies which I have sold previously on the likes of JD on the back of recent weakness after the listing of JD Health. The former continues to suffer post-syndrome while the latter have rallied a lot since the listing. We'll see if this investment pays off over time.

Apart from this, I have also been receiving and generating income from some of the options play which I took mainly on EV plays such as Xpeng and Nio through both Tigers and IBKR. They are not big positions but one which is within my comfort of style of play and tolerance, and most importantly the premiums are great in these companies given their very volatile movement and their recent offerings play. I have also other recent past closed/open positions in Salesforce and Palantir.

Open Options position at Tiger Brokers


Networth Updates

So the portfolio continues to benefit strongly again this month with an upsurge double-digit move month on month.

The continued rotation play benefited some of the positions I have such as Lendlease, Starhill, Comfortdelgro and as a result of this, the portfolio ended a strong month at $311,780.

This brings a total return at the end of this year to 191.7% and cap off a really good base on en-route to the next goal in 2021.


Here off wishing everyone a Merry Xmas joyful and full of bliss ahead from the 3Fs family.

Kaching!

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