Saturday, April 30, 2011

April 2011 Portfolio Summary and Review

April 2011 had nothing really eventful occurring, unless you count in the buzz due to the upcoming General Elections for Singapore. I spent most of my time reading, researching and paying attention to Election news and alternative views afforded by social media networks like Facebook and political blogs. My previous article on property highlights the issues I feel are important to Singaporeans and my stand on rising prices is clear – it is similar to a never-ending game of musical chairs. Since this is not a political blog, I shall not go too much into details regarding my political stance. In fact, I shall delve right into my portfolio and company summaries.

My portfolio and comments for April 2011 is as follows:-

1) Boustead Holdings Limited – For Boustead, early April 2011 saw the clinching of one contract for Geo-Spatial, and more oil and gas contracts. On April 4, 2011, Boustead’s 88.2% owned subsidiary ESRI South Asia Pte Ltd announced that it had been awarded a contract with SP Powergrid to design and implement a next generation geo-spatial platform. This is a five-year contract but the contract value was not specified. In an announcement on April 7, 2011, Boustead had secured S$25 million worth of contracts from the oil and gas industries. I look forward to the release of Boustead’s FY 2011 results some time in late May 2011. I shall be expecting a final dividend of at least 2 cents/share (FY 2010: 2.5 cents/share final dividend) due to the expected write-off of the Libyan township investment.

2) Suntec REIT – Suntec REIT released their 1Q 2011 results on April 21, 2011. A dividend of 2.388 cents/share was declared, and XD date was on April 28, 2011. The dividend will be paid out on May 30, 2011.

3) MTQ Corporation Limited – There was only a minor announcement by MTQ on April 19, 2011 to say that MTQ Investments Pte Ltd was placed under Member’s Voluntary Liquidation as the Company has already divested all of its investments. Surprisingly, MTQ released its FY 2011 results on the last day of April 2011, and revenue was up 12% year on year to S$91.7 million, gross margin dipped slightly to 40.9% from 41.1%; and net profit dropped 12% to S$10.6 million. Excluding one-off gains in FY 2010 and fair value changes, net profit would have increased by 18.6% as profit from operations for both divisions had improved. A final dividend of 2 cents/share was declared, and the option was given to accept in cash or scrip. I shall be doing a detailed analysis and review for MTQ in the coming weeks, as there are rather significant changes to the Balance Sheet and Cash Flow Statement.

4) GRP Limited – Predictably, there was no news for GRP for April 2011.

5) Kingsmen Creatives Holdings Limited – There was no news from Kingsmen for the month of April 2011. I attended Kingsmen’s AGM held on April 27, 2011 and will be doing a post on what transpired soon. Watch out for that.

6) SIA Engineering Company Limited – There was no news from the Company for April 2011, other than a minor announcement on April 6, 2011 that SIAEC had launched a state-of-the-art avionics facility in collaboration with Sagem of Safran Group. This JV is 49% owned by SIAEC and 51% owned by Sagem. SIAEC will release their FY 2011 results on May 10, 2011 after market close. I am expecting a decent final dividend from the Company in view of their strong and consistent free cash flows.

Portfolio Review – April 2011

Realized gains remained at S$55.4K as the amount of the Suntec REIT dividend was not significant enough to greatly increase realized gains for April 2011.

For the month of April 2011, the portfolio has dropped by -2.6% (using XIRR in MS Excel to compute) against a -0.3% fall in the STI; thus underperforming by 2.3 percentage points. This was slightly better than March 2011’s under-performance of -2.5 percentage points. Cost of investment remained at S$210K and unrealized gains stand at +13.4% (portfolio market value of S$238.1K).

May 2011 will be an intensive month as two more of my companies will be releasing results. They are SIA Engineering on May 10, 2011 and Boustead in late-May 2011.

I will be blogging more about my Kingsmen AGM experience, and will also find time to complete Part 5 of my Kingsmen Comprehensive Analysis. At the same time, I also have to allocate time to analyzing SIA Engineering, MTQ and Boustead’s FY 2011 results. It will be a very busy next two months!

My next portfolio review will be on May 31, 2011 (Tuesday).

Note: Edited Portfolio Review to include Cash Holdings. Emergency Funds are considered cash required for 12 months (at $2,500 per month) and are not to be touched unless there is a legitimate reason. Opportunity Funds are funds which are accumulated solely for the purpose of re-deploying to investments, and this acts as a cash stash to wait for suitable opportunities. Total Funds would include Market Value of Shares + Emergency Funds + Opportunity Funds. Both funds are earning interest at a rate of 0.8% per annum but these funds are very liquid and are readily drawn upon if necessary.


Dividends Warrior said...

Hi MW,

Wow! A 200K portfolio. I m only halfway there. :(

Just curious. Why so little blue chips in your portfolio?

Musicwhiz said...

Hi Dividends Warrior,

Blue chips are more for stability of income and I intend to increase my stake in them as I get older, as well as bonds. It's part of portfolio rebalancing as you get older and need to rely more on passive income as the threat of retrenchment gets higher and higher!

Also, another reason is because since most blue chips ae covered extensively in analyst reports and media, this makes most of them, if not all, fairly or over-valued. It would be prudent to wait for another severe downturn in order to purchase, and this is why I am building up cash at the moment as well.


CreateWealth8888 said...

I assume you don't look at Total Fund Returns?

OT83 said...

Hi MW,

How do you get 0.8%pa on your emergency, opportunity fund given bank interest so low?

You put in MMF or?

Musicwhiz said...

Hi Createwealth8888,

I know what you mean, but regrettably I do not account for my portfolio using a Funds approach (i.e. assigning a Unit Trust $ value to it), though I know I should be.

Be it as it is, this is my way of measuring returns. Thus far I am satisfied with my yield and overall realized gains.


Musicwhiz said...

Hi OT83,

0.8% is offered by CIMB Bank Starsaver savings account. It comes with bank statements, a cheque book, no minimum balance and 0.8% per annum if you top up at least $500 a month. So the money is safe and not subject to any risks like MMF are.


Market Strategist said...

Boustead is my favourite stock in your portfolio, I own this stock as well.

What do you think of Adampak?

ramshorn said...

Hi Musicwhiz,

U inspired me to own 0.188% of GRP at one time but i've been divesting down to 0.1% lately.

Reason is:
they will no longer receive rental income from a SLB building anymore, evident in the drop in revenue from the last half year results. Going forward, not even sure the old mgmt will keep up with the 2cts pa.

Would appreciate if u could re-inspire me to keep the 0.1% remaining.

A million thanks in advanced!

Musicwhiz said...

Hi Market Strategist,

Nice to know you are also a shareholder of Boustead.

As for Adampak, I think it is a well-run company with good dividends but I cannot really say more until I do more research on the Company.


Musicwhiz said...

Hi Ramshorn,

I concur with you on GRP's ability to generate good revenue - it definitely will be impacted by the loss of rental income.

That said, their other business units Hoses and Marine and Measuring Instruments should be fairly stable and continue to generate decent profits and cash flows, which is the main reason I am still vested.

As for their uPVC segment, it was mentioned by Director Han Hai Kwang that he may divest it if it continues to make losses and perform poorly.

In an interview with The Edge, he also mentioned that he is hoarding cash and is on the lookout for M&A to strengthen the Hose and Measuring Instruments Divisions. Could I recommend that you refer to the attached article here:-

Though the prognosis is not very positive at the moment, I will wait till August 2011 when the FY 2011 results are released to review and decide if I should continue to hold.