Tuesday, May 15, 2007

Mid-May 2007 Portfolio Review

It's time for a quick half-monthly review of my portfolio and my companies' businesses.

1) Ezra - Buy Price $1.30 (bonus adjusted), Market Price $5.50, gain 323%. The company had just ordered 2 ultra-large AHTS, and are working towards capturing their 2nd FPSO contract. EGM is to be held soon for approval of the bonus share issue.

2) Boustead - Buy Price $1.295 (average), Market Price $1.96, gain 51.3%. Boustead had won a S$11 million contract for Boustead Projects just yesterday. They should be releasing results in the final week of May 2007, and their proposed building of a power station in Dinh Binh Vietnam is still awaiting approval.

3) Swiber - Buy Price $1.01, Market Price $1.94, gain 92.1%. Swiber just released a corporate presentation and analyst briefing for 1Q 2007 results. It helps to explain a few of my concerns regarding margins and cash flows, and I am hoping the company can perform better in 2Q 2007 and beyond.

4) Global Voice - Buy Price $0.1775 (average), Market Price $0.205, gain 15.5%. GV is experiencing slow but steady growth after rebranding as EUNetworks. Just today, they announced a new 3-year agreement with UBL. For more of GV's contracts, please see my writeup in the next section.

5) Suntec REIT - Buy Price $1.11, Market Price $2.02, gain 82.0%. As this is a REIT, nothing much to comment. Yield is still fair at about 5% for my buy price, and I am expecting them to acquire some property in the near future which is yield-accretive, as the price has run up somewhat.

6) Pacific Andes - Buy Price $0.81, Market Price $1.13, gain 39.5%. China Fishery just reported results today and bottom line increased by 54%, so the flow through effect should hit PAH. PAH has yet to release more details of its proposed acquisition of 63.9% of CFG, and an EGM also needs to be convened to approve this major transaction. Results are expected in the 2nd last week of May 2007.

Overall, my portfolio has increased 88.3% from cost as at today. I should be aiming for at least 100% capital gains on my overall portfolio assuming Boustead, Swiber and Pac Andes show strong results moving forward. My next review will be at end-May (i.e. May 30, as May 31 is a public holiday).

Global Voice - An Update

Global Voice has so far captured many contracts this year and is rapidly building up its customer base. Below is a summary of all contracts captured so far for FY 2007:-

a) Jan 3, 2007 - Provision of private network for Hodgeson University
b) Jan 22, 2007 - Multi-Year contract with Largest Internet Exchange, AMS-IX
c) Feb 6, 2007 - Agreement with Denit for redundant data-centre
d) Mar 5, 2007 - Agreement with Techem for converged mission critical connectivity
e) Mar 12, 2007 - Contract with Endemol for content delivery solution
f) Mar 21, 2007 - 365 Hosting expands agreement with GV
g) Mar 27, 2007 - CreditWeb selects GV for global transaction platform
h) Apr 18, 2007 - Cyso selects GV for delivery of solution
i) Apr 23, 2007 - Blue Face chooses GV for highly redundant communications
j) May 8, 2007 - GV and UNet seal agreement for broadband services across the Netherlands
k) May 15, 2007 - GV concludes agreement with UBL to deploy high availability solution

In total, there have been 11 contracts won so far this year. Not counting Hosting365 which was an expansion of an existing contract, there have been on average 2 contracts captured per month (total = 10). Thus, this year has been a bumper year for GV, as the whole of FY 2006 only saw the capturing of about 5-6 contracts (and all of which were for the later part of FY 2006). In addition to these contracts, GV has also launched their Stuttgart network which will further enhance their competitiveness. The CEO Noel Meaney will also be one of the speakers at Capacity 2007, to be held in New York on 25 and 26 June 2007, and will be speaking on how to enhance revenue streams for companies through the use of EUNetwork's solutions.

To summarize, it looks very positive for GV for FY 2007; but this can only be validated once the 1H 2007 financial statements are out. They are due for release close to the end of August 2007, so there is still time for the company to continue to capture contracts to build up its recurring revenue base. At the current price of $0.205, it is difficult to conclude if this is a fair value for GV as PER cannot be used to value the company (it was loss-making in FY 2006). Still, GV may turn out to be as successful as Mediaring (the first profitable VoIP company) and Aztech (which does VoIP products) if it manages to build a strong customer base and leverage on its brand equity.

No comments: