Looking Ahead

Having achieved a good first half results, the question is how to improve or sustain it? Best World, Food Empire and Valuetronics were the key drivers of my first half performance. Will they continue to do well in the next few years? Will other counters take over the driver seat?

I decided to make a prediction on the above questions base on my current, limited knowledge of their business and gut feel. Of course, this is speculative in nature but it provides a rough idea how my portfolio might continue to grow in the next few years.

I must say I am quite satisfied after the exercise as there seem to be sufficient stories to keep my portfolio going. What about the other counters that did not even appear once in this post? I will write about them in the next post.

20172H
Food Empire - Turnaround should continue with positive results.

Valuetronics - Both CE and ICE segments will continue their growth momentum.

Best World - China story is in tact and should continue to power its growth.

SingTel - Launch of Netlink IPO should have a positive impact.

Micromechanics - Continue to benefit from its strategic decision to focus on semiconductor.

ISEC? Improvement in results, partly contributed by the acquisition of JLM clinics in 2016?

2018
Food Empire - Growth rate should be lower as compared to 2017. Expect growth from other markets, especially from the ingredient segment.

Valuetronics - At least for first half of the year with their automotive segment continues to gain traction.

Best World - This year should see more conversion of China export model to direct sales. Margin should improve.

Frasers Centrepoint Trust - DPU boosted by Northpoint AEI in 2017.

Starhill Global REIT - DPU boosted by completion of Plaza Arcade redevelopment by 20181Q. 

Straco? Will it increase its dividend?

Kingsmen Creatives? Will this be the turnaround year?

Raffles Medical Group? Unlikely, but will the new extension start to make a difference?

Duty Free International? Expansion or increase dividend from their cash hoard?

2019
Straco - Either acquisition or increase dividend if it did not do so in 2018.

Capital Mall Trust - DPU boosted from re-opening of Funan in 2018.

Raffles Medical Group? Contribution from Extension and Raffles Chongqing but may face start-up cost pressure from Raffles Shanghai.

Best World? Will it continue to grow?

Frasers Centrepoint Trust? Acquisition of Waterway Point? or in 2020 or 2021?

Starhill Global REIT? Orchard office turnaround?

Kingsmen Creatives? Continue its turnaround?

Frasers Logistic and Industries Trust? More acquisition?

2020/2021
Raffles Medical Group - Reaping the fruit of its expansion.

Straco - Further increase in dividend.

2017 1H Performance

Half a year has passed and it's time to report on portfolio performance again. Happy to report a good half yearly performance with a good second quarter riding on an exceptional first quarter.

Performance

NAV of portfolio grew from $3.78 (30 Dec 2016) to $5.17 (30 Jun 2017), providing a return of 36.6% for 6 months. This is above my stretched target of 12% and also beats my benchmark STI ETF which returned 14.6% inclusive of dividend over the same period. The charts below show the past 6 quarters and past 3 half-yearly performances. The drop in prices of a few counters in the past few weeks have weakened Q2 results but nonetheless a 9.0% return is a good one which I will take for any other year. The exception Q1 performance has also led to the best half yearly performance.

The strong performance is attributed to a combination of positive sentiment in the local market and good results reported from my top ten counters over the past two quarters. A summary of my top ten counters' last quarter performance can be found here.

The top performers continues to be Best World. After stock split and dividend, it has returned 127% this year. This is supported by core stock such as Valuetronics (47%), Food Empire (35%), Micro-Mechanics (32%), Straco (19%), Parkway Life Reit (15%), and Frasers Centrepoint Trust (14%).

ISEC which is not in the top ten also did well with an increase of 10%.

Allocation

While there were some changes in the counter, portfolio allocation has more or less stayed similar to what was planned. Current dividend yield of portfolio based on cost is about 4.7%.

	Planned	Actual
Dividend	~ 60%	58.0%
REIT/ Business Trust	<= 30%	25.8%
Growth	~ 40%	40.1%
Punt	<=10%	9.4%
Cash	0%	1.9%

Earlier in the month, I have also wrote about asset allocation in which I have written that I am going for 30% cash and 70% stock allocation. A check on my spreadsheet shows that it is at this allocation. So no action will be taken to put in or take out cash from the portfolio.

Action

For the month of June, 

I have divested

• A-REIT at $2.65 for a gain of 19%. Bought last December for a tantalising 7% yield for industry leader. With the recent gain, I have received more that 2 years of distribution and yield has dropped below 6%. 
• Techwah at $0.515 for a gain of 10%. Reason for sale is to raise cash for other counters.

I have added

• more Frasers Logistic and Industrial Trust at $1.03 after news of its latest acquisition. I take this as sign of how things will be like in the years to come.
• Japan Food at $0.46 for its consistent dividend. If it can maintain its dividend, it will give me a return of 4.3%. Not fantastic, so hope it will be higher in future.
• Duty Free International at $0.35 for its increase cash hoard and possible expansion in the next few years.
• Valuetronics at $0.77 to round up my holdings. Also, I am satisfied with the 4.7% dividend yield it is giving me.

You can click on April and May for my actions taken in those two months.

Core holdings

Based on initial cost, the top 10 holdings take up 74.9% of the portfolio. With the purchase of Food Empire and Valuetronics, they have moved up in positions. The rest has remains pretty stable.

1. Food Empire (9.7%) @ $0.43
2. Raffles Medical (9.5%) @ $1.48
3. Parkwaylife REIT (8.9%) @ $2.32
4. Valuetronics (8.6%) @ $0.54
5. Straco (8.1%) @ $0.84
6. Best World (7.7%) @ $0.30
7. Fraser Centrepoint Trust (6.4%) @ $2.01
8. SingTel (6.1%) @ $3.82
9. Micro-Mechanics (5.8%) @ $0.91
10. Starhill Global (4.3%) @ $0.67

Looking Ahead

It has been a wonderful ride so far this year. Not sure how long the good time is going to last but enjoying it while it lasts. Looking forward to the release of next round of quarterly results from my holdings and am confident of good results from most of my holdings.

Similar to first half, I do not think there will be much action on my core holdings. However, I might tingle a bit more with my none-core. 

Up next, I will post on a short visibility report of my various holdings for the next few years.

January and February Portfolio

It has been a busy past 6 weeks. Things are finally looking to settle a bit and it's time to continue to keep in touch with my thinking and reflection on my investment.

It has been a good start to the year for the market and my portfolio also benefitted from it. Year to date, it has returned 12.8%. Woohoo, I hit my target in less than two months. So would I achieve another 40% return this year? I hope so but you never know. Who knows? The market might just turn south any time. So continue to monitor the company's performance and invest/divest at the right time for the long term.

I have divested the following for the first one and a half month to increase my cash buffer and to reduce my REIT exposure.

• Best World: Partial sold as it has rose more than 50% within a month. It continue to be in my top 5 stocks holding.
• Thai Beverages: Among the few counters that I punted, I am just more excited about the rest.
• Raffles Medical Group: Partial sold to reduce my exposure. Remain my top stock in terms of initial capital outlay.
• CDLHT: To reduce my REIT exposure to within 30%.
• Starhill Global: To reduce my exposure to retail reit. And currently I favour neighbourhood reit more.

I have added the following positions.

• Valuetronics: Increased my stake slightly for its dividend.
• UMS: Bought a small stake after reading its plan to divest its customer base and attracted by its consistent dividend.
• Micro-mechanics: Increased my stake after it announced its good improvement in its latest quarter. Attractive dividend and potential of further growth.
• Dutech: Took a very small stake after reading Thumbtack Investor's detailed analysis
• Sing Medical: Took a very small stake as I perceived that the new management will continue to improve the group's performance
• Fraser Logistics and Industrial Trust: Took a very small stake after reading about it on The Edge and Dividend Warrior's analysis.

After the above actions, my top 5 holdings in terms of initial capital outlay are:

1. RMG @ average price of $1.48
2. Plife Reit @ average price of $2.32
3. Straco @ average price of $0.84
4. BWL @ average price of $0.60
5. FCT @ average price of $2.01