January 2011 Portfolio Summary and Review

In case readers have been wondering about the lack of posts for the last 10 days or so, the reasons are purely personal. Upon reflection, I realize my life has been getting busier and more hectic on almost all aspects – tougher work requirements (job), more demanding family commitments (with a 1.5 year-old child) as well as the need to spend more quality time with my loved ones (who, by the way, are not getting any younger). My previous post was on “pace of research”, and it is apt that it comes at a time when I feel I should slow down on active investing and adopt a more passive, but still watchful, role. I guess such a frenetic pace of blogging (one article every 4 to 5 days) cannot be kept up indefinitely, and one does run a little dry of topics and ideas as most have already been mentioned and discussed in the last three years. So to cut a long story short, my frequency of posts will be drastically reduced in light of a more healthy balance of work, time with family and exercise. My portfolio is already generating healthy passive income and though I would, of course, like it to be much more, some things cannot be rushed and it is a good time for me to re-evaluate my priorities in life. The mindless pursuit of money is unhealthy and I need to devote time to being a good son, father and husband too.

And so, I will be cutting down on a lot of content which I feel is quite unnecessary for my month-end portfolio review, and just focus on the companies I own and their businesses.

Below is a snapshot of my portfolio and associated comments for January 2011:-

1) Boustead Holdings Limited – It was a pretty busy and fruitful month for Boustead, as there were three corporate announcements for the month of January 2011. On January 5, 2011, Boustead announced that their energy-related engineering division had been awarded S$16 million in contracts from the oil and gas industries. Then on January 24, 2011, they announced a S$25 million demineralization plant contract secured by both Salcon and Boustead Project, the first time the two companies are working together on the same project. Finally, on January 27, 2011, Boustead Projects was awarded a S$7 million design and build contract for XP Power Manufacturing Facility in Vietnam. From these contracts, it can be seen that the contract size has grown smaller, though the frequency seems to have increased. I shall be anticipating Boustead’s 3Q 2011 results release in mid-February 2011.

2) Suntec REIT – I won’t dwell too much on Suntec REIT as my shareholding is very small as compared to the size of my portfolio. Results were released on January 21, 2011 and a dividend of 0.593 cents/share was declared, and this will be paid out on February 28, 2011. This has been highlighted in my portfolio summary as the XD date has already passed.

3) Tat Hong Holdings Limited – The most major news impacting Tat Hong was the Queensland floods which affected one of Tutt Bryant’s branches. Fortunately, most of the equipment was already shifted to high ground and so damage was minimal. The Company expects some short-term write-offs although they are covered by insurance. Long-term wise, however, the Company did mention that a lot of rebuilding needs to be done in Australia in aftermath of the worst floods in quite a while, and this will bode well for Tat Hong’s business as Tutt Bryant contributes >50% of revenues. I am hoping for a more definite update on the situation when Tat Hong releases its 3Q 2011 results in mid-February 2011.

4) MTQ Corporation Limited – There was no news again from the Company except that the scrip shares have been credited to my CDP account, and will boost the value of my portfolio. Of course, this also means I have odd lots, but since my intention is not to sell the shares but to enjoy the long-term business growth of the company, this does not pose a major problem. If there are more scrip dividends declared in future, I will make use of them as an opportunity to add more shares.

5) GRP Limited – As expected, there was no news from GRP for January 2011. I am expecting 1H FY 2011 results to be released in early February 2011.

6) Kingsmen Creatives Holdings Limited – There was no news of significance for Kingsmen Creatives for January 2011. Full-year results for FY 2010 should be released in late February 2011, and I am expecting a decent final dividend to be declared.

7) SIA Engineering Company Limited – SIAEC released 3Q 2011 results on January 25, 2011. For 3Q 2011, revenue was up 11.6% while net profit was up 7.7%, which was a decent performance considering some of their more recent associated companies and start-ups are still in the gestation phase (and thus will incur start-up losses). For 9M 2011, revenue was up 13.8% while profit was up a more commendable 21.8%. FCF continued to be very strong for 3Q 2011 and the Balance Sheet was also free of debt. In short, I have no complaints.

Portfolio Review – January 2011
Realized gains stayed stagnant at S$49.1K as the Suntec dividend was a little too small to make a meaningful impact on realized gains.

For the month of January 2011, the portfolio has fallen -1.0% against a -0.4% fall in the STI. Cost of investment continues to remain at S$202.4K, and unrealized gains stand at +18.9% (portfolio market value of S$240.7K).

February 2011 is the month to look out for, as four of my companies will be releasing results. They are Boustead, Tat Hong, GRP and Kingsmen Creatives. I expect dividends from GRP and Kingsmen, while the other two companies will provide updates on their businesses and a commentary on business prospects as well.

My next portfolio review will be on February 28, 2011 (Monday).