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Tracy Lim

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Tracy Lim

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Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 08 Jul 2019
Hey there! It's nice that you are starting out - no amount is too small :) I will recommend you to go into regular savings plan . We compared the different RSP (DBS vs OCBC vs PhillipCapital). You can take a look here https://blog.seedly.sg/which-regular-savings-plan-is-the-cheapest/ Since you are talking about $100 monthly, I will recommend you going into POSB/DBS Invest saver. It has the lowest fees of 1%. Good thing about Invest saver is that you can invest without much monitoring. You can read more about POSB invest saver at their page here https://www.posb.com.sg/personal/investments/investing-in-funds/invest-saver . Feel free to ask if you have any more questions! :)

REITs

Stocks Discussion

Investments

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 13 Jun 2019
Just going to give my short opinion on this. I prefer Capitaland Mall Trust. For REITs, some things you can look at are: - The industry - Size - Portfolio of properties - Gearing - Lease expiry and occupancy - Distribution per unit (how much they yield and whether it increased over the years) Frasers Centrepoint Trust 6 properties. Malls ending with "point". Causeway point, Northpoint,..etc. Personally, I don't really visit these malls often. Northpoint just got revamped not long ago though. But I feel the locations of these malls are not very good. 3 out of 6 properties have less than 90% occupancy. Other 3 has above 90%. DPU: 12.015 cents. Based on current share price of 2.57 that gives 4.68% distribution yield. Market cap: 2.799B CapitaLand Mall Trust 15 properties, in good locations at MRT stations with high good connections. This means high traffic. ! 99.2% occupancy rate. DPU last year was 11.86 cents. Based on current share price of 2.59 that gives 4.58% distribution yield. Market cap: 9.516B (3x FCT) Overall I prefer Capitaland Mall Trust. Share price similar which means as an investor your same amount of money can be invested in either, for the same number of units. Good about FCT Higher dollar dividend (by 0.2 cents) Good about CMT CMT is a bigger cap REIT than FCT. Furthermore, growth of CMT is better than FCT. CMT has a greater portfolio of malls (and maybe because I prefer the malls in the portfolio of CMT haha). Higher occupancy rate than FCT.
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Stocks Discussion

Investments

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 12 Jun 2019
TL;DR Dividend yield of 6.58%. Should you just buy this stock for dividends? Short answer is no, or at least not just for its dividends. Financials look pretty bad in 2018. Business overview Pacific Century Regional Developments Limited (PCRD) has interests in telecommunications, media, IT solutions, logistics and property development and investment, in the Asia-Pacific region. PCRD’S most significant asset is its 22.7% stake in Hong Kong-listed PCCW Limited (PCCW). PCCW’s local media business mainly comprises Hong Kong’s largest pay-TV, NowTV, its OTT extension Now E, and free TV under the brand ViuTV. Share price ! Current share price is $0.350 (as at 12 June 2019). 52-week L/H is $0.330/$0.450. Financials Note that figures below are in thousands (‘000). ! Net profit decreased by more than 40% in 2018. Note here that their revenue is lower than their net profit. This is because they have associated corporations, which accounted for an additional income of $36.5 million, and income tax credit of $6.9million. ! ! Dividends Paid out a final dividend of 2.20 cents last year. Dividend in 2019 paid out was 2.40 cents. On top of that, had a special dividend of 6.30 cents. In 2018: Taking their final dividend of 2.20 cents, dividend payout is 117%, more than their net profit (more than what they can afford). ! No dividends were paid in 2017. In 2018, Number of shares on hand = 2,649,740 A dividend of $0.022 eventually got paid out. $0.022 x 2,649,740 = $58,294 This is a number greater than their net profit and it is unsustainable. Their debt levels are pretty low and can be covered off with their cash, which is a good thing. 1Q2019 Profit for the period increased, to 7.74m from 4.54m YoY. Balance sheet overall increased. Net assets increased to 1,448,437,000 , from 1,405,334,000. NAV is $0.547 as at 1Q2019. This is higher than their current share price. Conclusion Net profits decreased by more than 40%. Financials are not very strong. Past dividend is high, especially with their special dividend of 6.30 cents. But it is unsustainable given their level of profits. 1Q2019 financials appear to be better YoY. Those looking to get into the stock for dividends will need to take note that dividends paid out in the future probably will not be as high. Yields you see online probably included the 6.30 special dividend, inflating the number. But NAV makes share price seems undervalued. Please do your own due diligence.
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Investments

Stocks Discussion

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 11 Jun 2019
! TL;DR Sembcorp Ind is currently trading near its 52-week low. Let us take a look Sembcorp, which is a component stock of the Straits Times Index. Share price ! Share price is currently trading at $2.38 as at 4/6/2019. 52-week L/H is $2.36/$3.11. Share price decreased ex-dividend and due to the high beta of 1.03 (below), which means high correlation to the volatility of the market. Dividends paid in 2018: 4.00 cents per share, giving a payout ratio of 23.6%. ! Constituents of their profit (Left side is profit, and right side is percentage of profit as a whole). As you can see, utilities and urban development accounts for the bulk (or all of the positives, actually) of their net profit. The marine sector is facing challenges which will continue in 2019. ! P/E of around 14 means it is quite fairly priced. At the share price of $2.38, if the dividend per share remains the same, it gives a dividend yield of 1.68%. 1Q2019 ! Sembcorp 1Q2019 net profit increased 21% . The Energy business’ net profit increased by 21% to S$85 million in 1Q2019 compared to S$70 million in 1Q2018, mainly driven by improved performance from India and recognition of peak winter availability payments for UK Power Reserve. Moving forward - The Energy and Urban businesses continue to underpin the Group’s performance. However, the market environment continues to be challenging in 2019, especially for the offshore and marine sector. - The Group remains focused on executing strategy, improving performance as well as strengthening its balance sheet, and is on track to deliver on its divestment programme. - In Singapore, the Open Electricity Market will be extended nationwide in 2019 and will remain challenging with so much competition. - India utilities business is expected to improve. The long-term outlook for the India power market remains positive, with the current situation of peak surplus to reverse by the 2020 fiscal year. - Sembcorp Industries disposed entire equity interest in Gallant Venture for S$62m, giving them more working capital. Potentially can put the cash to better use. (read here: https://www.businesstimes.com.sg/companies-markets/sembcorp-industries-disposed-entire-equity-interest-in-gallant-venture-for-s62m)
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OCBC

UOB

DBS

Investments

Tracy Lim
Tracy Lim
Level 5. Genius
Answered on 11 Jun 2019
On top of dollar dividend, I think what is more important is the dividend yield. i.e do take into account the entry price when you buy the stock as well! High dividends is good, but remember your purchase price is important too.

Investments

Stocks Discussion

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 07 Jun 2019
You can take a look at the percentage of the transaction fees to the total price you are paying. In this case you're paying $0.80/share x 100 = $80 Transaction fee = $10 Effectively, you're paying $80+$10 for 100 shares. i.e: Cost per share = $0.90 It means you will need to see the share increase $0.10 before you break even. That means 12.5% increase. After which, you will see a gain. But anything less you are losing. So to answer your question, if you think the stock can increase 12.5% (or $0.10 per share in this case) when you exit, then nope it's not foolish!

Investments

Stocks Discussion

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 07 Jun 2019
TL;DR : In FY2018, Old Chang Kee saw a revenue increase but with decreasing profitability due to rising costs. However, successful expansion into the UK allows for potential for expansion into more overseas markets, as aligned to their growth strategy for the years ahead. ! Credits: CapitaLand Overview Started in 1956, Old Chang Kee sells their signature curry puff at their outlets, together with over 30 other food products including fishballs, chicken nuggets and chicken wings. Most of their sales are on a takeaway basis and their outlets are located at strategic locations to reach out to a wide range of consumers. Financials Old Chang Kee has a 9.12% increase in revenue from FY2017. However, profit before tax decreased by 12.7% due to the increase in not just the cost of goods sold but other expenses like operating expense, depreciation and amortisation, financing costs for their new factory facilities and costs of opening their joint venture in the UK. Isaac has nicely given a run-through of these financials. Apart from that, we can look at their returns. Their ROA is 7.72%. ROE is 14.21%, which is double of FY2017’s at 6.37%. However, looking at the table below, it was actually due to FY2017’s net profit seeing a great dip that contributed to the increase in returns from FY2017 to FY2018, rather than FY2018 doing well. In fact, FY2018’s net profit actually did worse than in the past financial years from 2014 to 2016. ! Group structure Under the Old Chang Kee group, the Company has other segments in Singapore, Australia and Malaysia. The Dip ‘n’ Go retail outlet offers delicious food on the go, with a variety of dips to go with. Bun Times retail outlets offer Hainanese inspired buns with a variety of fillings like curry chicken and coconut. The “Curry Times”, “Take 5” and “Mushroom” dine-in retail outlets carry a range of local delights such as laksa, mee siam, nasi lemak and curry chicken. Old Chang Kee Group also provides catering services to the central business district and selected areas in Singapore. ! Developments In FY2018, Old Chang Kee opened a new outlet, and currently operating over 80 outlets in Singapore. The enlarged food facilities both in Singapore and Iskandar Malaysia will provide a strong platform to organically grow our local and overseas businesses in the years ahead. Outside the Southeast Asia region, the Group opened its first flagship outlet in Covent Garden - London, the United Kingdom in June 2018, receiving positive media reviews from both the United Kingdom and Singapore. It has generated new revenue streams for the Group and uplifted Old Chang Kee’s brand positioning. The Group is encouraged by the London outlet’s initial success and will continue to work hard to maintain positive momentum. Competition Like other food and beverage companies, Old Chang Kee faces strong competition as it is arguably substitutable with products from other brands such as Polar, Bengawan Solo, Tip Top, etc. However, these other players have been around for a long time, and I suppose that they have been co-existing in the same playing field all this while. Partnering with other food delivery companies like Deliveroo and FoodPanda gives them a potential increase in sales, especially as increasing customers utilise such platforms. ! Old Chang Kee @ Jewel Changi Airport Credits: Mothership.sg Old Chang Kee also opened an outlet at Jewel Changi Airport. Passing by the shop, I noticed that they have a wider variety of food products with new items that are not available at other outlets – which are what they called their Flavours of the World themed puffs. This includes the Mala Chicken Puff, HK BBQ Puff, Teriyaki Puff and Chilli Crab Puff, encompassing tastes from different countries around the region. This can be a way to test the receptiveness of these products with customers from all over the world passing through Jewel and ultimately help in deciding their expansion strategy outside Singapore. Conclusion Their net profit showed that they may not be doing very well in the past few years. Despite an increase in revenue, their costs have been increasing even more, causing the net profit to decline. FY2017 was a year of poor performance for Old Chang Kee, but we can see that they experienced a rebound in FY2018. However as we know, past performance does not guarantee future performance. Considering that they have the intention of expanding overseas, there is a good potential for growth, giving them customers from outside Singapore and Southeast Asia. Seeing how successful they are with their outlet in London, it is evident that Old Chang Kee’s signature products are not just enjoyed by people here in Singapore, but also cater to the tastes of those further from home. Should Old Chang Kee expand overseas, especially countries in the West, they will be able to enjoy having an edge in the market, especially since such Singaporean delicacies are not commonly found yet greatly enjoyed by the people there, and such unsaturated markets will give much higher room for revenue and brand growth.
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Stocks Discussion

Investments

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 07 Jun 2019
! TL;DR : Fraser & Neave stock is trading near its 52-week low. FY2018 profits increased 27% and 1H2019 profits jumped 80% YoY compared to 1H2018 . Lets take a look at the summary of this stock! ! Business overview Established in 1883, Fraser and Neave, Limited (“F&N”) is known by us more for its drinks, including 100 plus, F&N drinks, Ice Mountain, Vinamilk and Chang Beer. Under F&N Limited there is not just the Food & Beverage but they are also in the Publishing & Printing industry - Marshall Cavendish (such as some of our textbooks!), but this post will mainly talk about their F&B segment. Share price ! Credits: Yahoo Finance Currently, F&N Limited is trading at $1.74 (as of writing on 15 May 2019), with the 52week L/H at $1.67/$2.10. The current P/E ratio is 16.36. 1H2019 profits jumped 80% YoY compared to 1H2018, calculated based on attributable profit before exceptional items, comparing 6 months to 31 March 2019 to one year before (6 months to 31 March 2018). Financials ! ! In FY2018, profits grew 27% compared to the year before. It is to note that in their financial statements, they reported two numbers for their net profit. The difference is as shown below. ! The difference in 2017 was mainly due to the realisation of fair value adjustment reserve upon change of interests in Vietnam Dairy Products Joint Stock Co (Vinamilk). Thus for the profit of FY2018, we will compare it with the profit of FY2017 before fair value adjustments and exceptional items, as some of these are one-off events, and there is an increase in profit from FY2017 to FY2018 of +27.08%. As for dividends, they paid out a total dividend of 4.5 cents/share for the year, constant with FY2017, with a payout ratio at 53.6%. 1H2019 performance The financial performance of F&N for 1H2019 for the period ended 31 March 2019 showed an increase. Revenue increased early in 2019 due to the Chinese New Year sales. The increase in revenue was fueled by Dairies increased earnings of 43%. It offsets the decrease in beverages earnings which had higher marketing spending and distribution costs, and pre-operating costs incurred at the new brewery in Myanmar. Revenue portfolio ! SWOT Analysis Strengths F&N is rolling out some new products into their range of F&B. Healthier products: introducing lower sugar content into some of their drinks. New products: F&N MAGNOLIA Plus Lactose-free milk innovation. Portion control packing: introducing 100 plus in 250ml pack These new innovations are seeking to meet changing market trends. Weaknesses F&B Industry Having operations in different countries, they will be subject to foreign exchange risks since they have transactions arising from trading and investment activities. The company tackles this by hedging 50% to 90% of anticipated exposures. Publishing & Printing Their diversification into Publishing & Printing is not serving them well, and revenue decreased 9% in 1H2019 compared to 1H2018. This was due to a drop in magazine-related demand for both print and distribution and lower publishing sales in Singapore and Hong Kong. Are they better off not having this segment of diversification? In Singapore, the demand for the print magazine is persistently declining. They are trying to offset this by diversifying into China and Malaysia to cushion the drop for traditional print materials. Furthermore, worldwide paper prices are decreasing, leading to increased costs. Opportunities The Group’s strategy is to expand into new markets, which are emerging markets. This brings in increased revenue streams and could yield better profit figures as competition is lowe. They also entered into the food business in Thailand, having roughly 20.75% in Genki Sushi Bangkapigenki. Threats As mentioned previously, there are met with shifting consumer behaviour and industry trends. Consumers are increasingly health conscious and going for “less sugar” products. They are adding new items into their range, but it is unsure whether consumers will be getting these lower-sugar-but-still-high-in-sugar drinks or rather into say, healthier fruit juices instead. #fitspo ! On top of that, they are faced with new regulations. From 1st July 2019, Malaysia will impose a sugar tax on soft drinks and juices of 40 sen per litre. How will this affect F&N? Taking a look at their revenue by geographical region, we can see that Malaysia accounts for the greatest percentage of their total revenue. With this tax, their profit will be negatively impacted, and hence put a dent in their portfolio as a result. Conclusion The price of F&N is near its 52-week low and new products are put in existing markets. On top of that, they are looking at growth into emerging markets where they will face lower competition which means higher profits. However, they are faced with changing consumer demands and subject to regulations, which will impact their earnings, and despite rolling out new products aiming to counter that, there is still uncertainty whether it will be well-received in the markets.
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Investments

Stocks Discussion

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 07 Jun 2019
! TL;DR Here to update with The Hour Glass Limited (Hour Glass) ‘s latest financial results. Financial year-end for Hour Glass is 31 Mar 2019. In short, net profit increased by 41% . Cash flows are healthy. P/E ratio of 7.75 makes it worthy to look at. Business overview The Hour Glass (“Hour Glass”) is a leading luxury watch retail group, holding brands like Rolex, Patek Philippe and Audemars Piguet. Their multi-brand boutiques are all strategically located in Singapore, Malaysia, Australia, Thailand, Japan and Hong Kong. Expert team of experienced sales consultants will guide and assist customers through the watch buying experience and they strive to provide customers with an exceptional timepiece. Financial results As of today, their annual report is not out yet, but unaudited earnings are released. Results below are based on figures given in their unaudited earnings. Information is limited to what they released. ! ! The increase in profits is mainly attributed to: - Revenue rising 4% to $720.9 million. There is steady growth across its regional retail network. (Maybe with negative market outlook, people start buying watches for investment...) - Share of results of associates Balance Sheet ! - Current assets did not change much from 31 Mar 2018. - Do note that Hour Glass has Investment properties as well. For their assets, PPE went up but investment properties went down. This could be due to revaluation differences on top of selling off/acquiring properties. (more info can be found after they release their financial report.) - Their cash is very high. (But then again... why are they keeping so much cash? They need to better manage their cash and inventory) Share price ! The share price is $0.77 as at 6 June 2019. This gives a P/E ratio of around 7.75. Beta is 0.47, and is relatively less volatile to the market. Dividends paid = 21,150.3564‬ Dividend paid is 3.00 cents in 2019, an increase from 2.00 cents one year ago. The dividend payout ratio is 21,150.36/71,404, about 29.6%, an increase from about 28% the previous year. Free cash flow FCF = 66,045 - 18476 - 638 = 46,931‬ Bank loan repayable in a year = 12951 + 2021 = 14,972 FCF = 46,931 - 21,150.3564‬ - 14972 = 10,808.64‬ (‘000) Free cash flows is positive (healthy) Positives: - Dividend payout sustainable (and increased dividends too) - Free cash flows positive - High inventory of watches - Financials pretty strong Concerns: - Certain watches in their inventory are classified as timeless pieces, but there are inevitably those that are seasonal and may become outdated. This could then cause a write-off of inventory, meaning a lower value in inventory even though those watches are still there. - Revaluation of Investment Properties can affect profit significantly - Prospective shifts in global geopolitics and economics continue to cast concerns over the positivity of consumer sentiment amongst watch buyers. Conclusion P/E ratio is pretty low, and this stock seems undervalued. However, there is high uncertainty in the markets and they expressed concerns on their sales in the near future. The valuation prices are all dependent on whether or not they can keep up with similar revenue. It is a stock I will monitor and wait till more information is released but currently, I am pretty ambivalent about this stock and there isn't any strong inclination to buy right now. Especially when luxury watches are big ticket items and the frequency of purchase is generally low. If you're interested in this industry, you can check out Cortina Holdings too for consideration (P/E ratio currently is 6.72) which we talked about before.
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Investments

Stocks Discussion

Tracy Lim
Tracy Lim
Level 5. Genius
Updated on 04 Jun 2019
! TL;DR: Riverstone is currently trading at its 52-week low. Revenue in 1Q2019 saw a 14.6% increase YoY. Business overview Riverstone is a Malaysia-based company that specialises in manufacturing cleanroom and healthcare gloves. Incorporated in 1991, they have since received significant awards and certifications. Share price ! The share price of Riverstone is trading at $0.97 (as of 17 May 2019). The 52-week L/H is at $0.96/$1.24, i.e Riverstone is trading near its 52-week low. Revenue portfolio ! Financials ! ! ! ! ! note that figures are in RM Dividend payout ratio of 40%, with a dividend per share of 7.0 sen per share. P/E ratio sits at 16.6 , which is pretty alright, not a great bargain but it could have been undermined by the lower profits. Their cash will be able to cover all their short and long term debt. 1Q2019 performance Revenue in the first quarter grew, but the cost of goods increased thus leading to an overall decrease in net profits of 2.8%. Now they are undergoing phase six of their capacity expansion plans which they expect to add 1.4 billion pieces to amass a total production capacity of 10.4 billion pieces of gloves per annum by end FY2019. SWOT Analysis Strengths - Expanding its production plants, which can bring about greater economies of scale with higher production. - R&D and technical expertise: Being in the field for 28 years, they possess the strength in research and product development to produce high-quality healthcare gloves and that is used by multinational corporations. Opportunities - According to the Malaysian Rubber Glove Manufacturers Association, the rubber glove industry has been growing at an average of 8% to 10% for the past 25 years, and we expect this to continue in FY19. This is underpinned by the growth in the healthcare industry, an increase in hygiene standards and economic growth in emerging economies. Threats - High competition from other glove makers (such as in China), triggering a price war that impacts their margins and they are not able to pass on the rising costs due to competitiveness. - A shortage of raw materials led to a 10.0% hike in average raw material prices, while a shortage of manpower toward the last two quarters affected their operating performance. They also faced a weakening US Dollar, a currency where the majority of our sales are denominated in. Conclusion In the first quarter of 2019, revenue increased but profits decreased. A decrease in profits doesn’t mean that we shouldn’t consider this stock. Although they are faced with macroeconomic risks, I feel that the fundamentals of this company are pretty strong, and they are undergoing expansion too which means higher revenue. Links: https://seekingalpha.com/article/4231751-defensive-growth-opportunities-growing-medical-glove-market
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