2016 Performance and Review

Today marks the end of market for the year. It brings me great pleasure to announce that my portfolio has returned 41% (including dividend) for the year. My best performance since 2007, largely attributed to the excellent performance by Best World International Limited (BWL). Even if I excluded the gain from BWL, portfolio would have returned approximately 9% which still beats STI ETF that has remained flat for the year with about a 3% return from dividend.

What has gone well?
I have largely adhere to my portfolio allocation that set out in March 2015. Tracking the allocation has reduces the risk of skewing my portfolio to a category just because I am suddenly excited by an avail opportunity.

Along the year, I have tweaked my strategy and have decided to keep my exposure to REIT to around 30%. Also, I have decided to create a sub-category "Turnaround" which falls under the "Growth" category.

The second thing that has gone well was slightly more time was spent reading up about the businesses that I am interested in. This leads to relative smaller movement in my top 5 holdings as compared to the rest of my portfolio. Best World, PLife Reit, Straco and SG Reit have remained in this list. The exception is ST Engineering which is replaced by Raffles Medical and Fraser Centrepoint Trust.

This marked the 25th post for the year. The highest since I started this blog!

What could be better?
I am still trading quite a bit over the second half of the year. Also, am still looking at the price of the stocks way too often. I hope that will change in 2017 and I would instead spend more time learning about the business in my portfolio.

What to look for in 2017?
These are the things about the Growth/Turnaround/Punt counters that I am excited for the year ahead.
1. Completion of Raffles Hospital Extension.
2. Best World execution of its conversion of China's export model to direct selling model.
3. Completion of 800 Super WTE plant.
4. Continue growth of Vietnam business for Food Empire.

For my Dividend/REIT counters, I believe they are able to sustain their payouts for 2017.

Portfolio December 2016

The purchases made this month are mainly due to their reduced price.

1. CMT - Purchased at an average price of $1.88 for a yield of 5.8%.
2. AReit - Purchased at an average price of $2.28 for a yield of 6.7%

Other trades in December.

3. Added to Best World

4. Added to Fraser Centrepoint Trust

5. Added to 800 Super
6. Added to Thai Beverage 

7. Added to SingTel
8. Divested Dairy Farm to raise cash
9. Divested QAF to raise cash
10. Divested ST Engineering to raise cash
11. Divested LHN due to lack of understanding of business.

Current dividend yield (based on purchase price) is 4.0%.

For Income (52.8%)

REIT (31.7%)

Parkway Life REIT

Fraser Centrepoint Trust
Starhill Global REIT

Capital Mall Trust
Ascendas REIT
CDL Hospitality REIT

Dividend Stocks (21.1%)

Straco
SingTel

Valuetronics

Micromechanics

For Growth, Turnaround and Punting (40.3%)

Growth Stocks (28.6%)

Best World

Raffles Medical
ISO Team

Turnaround (4.5%)

Food Empire

Punt (7.1%)

800 Super
Thai Beverage

ISEC

Portfolio November 2016

November is a month of punting. Lots of trading with small purchases based on others' reviews and a short read-up on latest results and last year AR.

The purchases are:

1. Dairy Farm - One of the recommendations by MF Singapore. I don't always buy their recommendations. The other 2 stocks that I have bought due to their recommendation are SGX and RMG. Still holding on to RMG but have divested SGX. Dairy Farm was recommended somewhere in August but I only bought this month as I realized that all 3 analysts have a stake in it and hence I am more convinced of their recommendation. Classifying under punt due to the nature I bought it but probably would go under growth category if their investment in Yonghui and IKEA franchise in HK, Taiwan and Indonesia continue to perform.

2. ISEC - International Specialist Eye Centre. Read about its 3Q results in MF Singapore free site and its jump in earning caught my attention. Further reading tells me that it just IPO in 2014 and earning has not been consistent after listing. Decided to take a small stake as I think it has a potential to grow; it is increasing its dividend; and a high number of employees are holding its shares.

3. Thai Beverage - This was a miss then. I was looking at it when it was going at 20 plus cents and the rest is history when it acquired F&N. I finally took a small stake in it after its price has drifted down from a high of $1.06 to $0.90. Its latest results is good but due to the acquisition and change of financial year, it is confusing to me. In any case, this is another company which has potential for further growth. Will start to follow it more closely in the coming year.

4. 800 Super  - Another stock which I missed the run up. Came into my radar when it is at 40 plus cents but its huge debt put me off. Thanks to a value buddy who posted on the company's development of its Waste to Energy plant and with its completion next year, the debt does not seem as scary as before if the new plant can generate a new stream of revenue and profit for them. Just took a small stake as an impetus to monitor how this development will plan out.

5. LHN - Get to know this business from another fellow investor. Just IPO in 2014 and latest results has improved quite a bit from 2015. Took a small bite and will sell in growth is not sustainable.

Other trades in Novemeber.

6. Added to RMG after reading through the past decade's annual reports and am convinced of its potential growth after the completion of its Hospital extension next year.

7. Added to Food Empire after an improvement of its latest results and purchase by its CEO.

8. Divested Old Chang Kee after making a gain of about 3 years dividend. Will continue to monitor its performance and might re-entered at a good price.

9. Divested FJ Benjamin after continued poor performance for 1Q and its price gained by about 30%.

10. Took a small stake in SingTel for a dividend yield of 4.6%.

Current dividend yield (based on purchase price) is 3.9% after putting in the cash withdrawn earlier this year.

For Income (52.2%)

REIT (27.8%)

Parkway Life REIT

Starhill Global REIT

Fraser Centrepoint Trust
CDL Hospitality REIT

Dividend Stocks (24.3%)

Straco

ST Engineering

Valuetronics

QAF

Micromechanics
SingTel

For Growth, Turnaround and Punting (39.9%)

Growth Stocks (26.8%)

Best World

Raffles Medical
ISO Team

Turnaround (4.6%)

Food Empire

Punt (8.5%)

ISEC

Dairy Farm

Thai Beverage

800 Super

LHN

Portfolio October 2016

The following adjustments are made to my portfolio in October. 

1. Added a small stake of Old Chang Kee for its dividend and possible growth in 2 to 3 years with the completion of its new factories.

2. Added a small stake of FJ Benjamin for a turnaround story. The group is placed on SGX watchlist for 3 consecutive years of pre-tax loss. It has completed its re-structuring that started in 2013/2014. Recently clinches distributor right of CASIO watch in Indonesia and Marc Jacobs. 

3. Re-entered CDLHT which I sold at $1.495 in July. Feels that the current price of $1.335 provides a good yield during the current downturn and believes it will do well when the increase in hotel rooms stabilize after 2018.

4. Increased my stake in ISOTeam after reading throught its latest AR. Confident of its contiued growth in the next few years. Also, reclassifed it from punt to growth.

5. Divested my holdings Capital Retail China Trust to reduce my exposure to REIT which I would capped now at around 30% instead of the original plan of 40%.

6. Divested SIA Engineering due to poor Q2 results and no special dividend declared from its divestment of HAESL.

Current dividend yield (based on purchase price) is 4.4%.

For Income (60.9%)

REIT (31.2%)

Parkway Life REIT

Starhill Global REIT

Fraser Centrepoint Trust
CDL Hospitality REIT

Dividend Stocks (29.8%)

Straco

ST Engineering

Valuetronics

QAF

Micromechanics
Old Chang Kee

For Growth and Punting (34.2%)

Growth Stocks (30.6%)

Best World

Raffles Medical
ISO Team

Punt (3.6%)

Food Empire

FJ Benjamin

Why I buy Best World?

I have written a longer write ups on Best World last July in the following two posts:
Best World International Limited

MLM and Best World...my experience with them

This post will summarise my reason for buying it and my expectation. I will also share its latest results.

Why buy?
The following are the key reasons why I purchased Best World.

• The group gains traction in both Taiwan and China markets and has grown tremendously from 2014.
• The group obtained its Direct Selling license in China which opens up a giant market for them in the next few years.
• The group is a cash business. If they can grow their top-line, they would generate cash. And with a dividend policy of 30%, it means more cash-back.

What I expect?

I expect the company to execute their strategies to grow their China market. Execute well, and it should have double digits growth for the next few years. I also think that the company might issue bonus and rights in the next few years to generate further interest in the company. Best World would become a billion company if they can sustain their growth. Longer term, I hope that they can translate their performance in Taiwan to other markets.

When will I sell?

I would be holding on to my stakes for at least the next few years as there is clarity in their growth. I will sell if there is a sudden reversal of their fortune in both Taiwan and China due to regulatory changes. Another reason that I might sell is if the valuation goes crazy like PE 50x. I probably won't sell all but will definitely takes profit. 

Recent results
Amazing 1H results. Revenue up by 154.3% and net profit increased by 466.1%. Dividend of 2 cents and propose bonus shares of 1 for 4. Taiwan continues to be the star performance with revenue up by 275.8% and China is catching up with revenue growth of 164.7% for its export market. Currently, Taiwan and China accounted for near to 90% of group's revenue. Indonesia also saw growth of 122.9% but it is very much smaller in absolute revenue. 

I am happy to see the results even though it was already expected. There is a slight concern that Taiwan accounted for 63.7% of its revenue. However, things should change by next year with conversion of China export model to direct selling.  

I will continue to hold on to my current stakes and might buy slightly more after the bonus issues.