End-July 2007 Portfolio Review

The final two weeks of July consisted of news flow as well as meetings with Management. Boustead held their AGM on July 30, Pacific Andes on July 31 while Swiber held their EGM on July 31. I attended all 3 events in order to speak to Management about the company’s direction and strategies and my comments were posted in separate blog posts for readers’ pleasure. Of course, at this time of writing, an interesting fact is that the market had just crashed 115.95 points on August 1 as a result of USA sub-prime mortgage worries. It is when companies are being priced cheaper by Mr. Market that they become more attractive to purchase. Of course, the reflex reaction from most people is to avoid, as some may end up being served with margin calls or left high and dry on contra. Investors usually see such sell-downs as ripe opportunities for picking up good stocks at cheap prices.

Below is my usual summary and rundown of my investments and related news as at July 31, 2007 (STI at 3,547.66 points):-

1) Ezra - Buy Price $1.30 (bonus adjusted), Market Price $6.25, gain 380.8%. On July 18, 2007, Ezra announced the appointment of Dr. Ngo Get Ping as the Group’s latest independent director. With 20 years of experience in the finance and stock-broking industry, Dr Ngo is qualified to add value to Ezra’s corporate governance and disclosure practices, even as the Group becomes more diversified as it grows.

2) Boustead - Buy Price $1.295 (average), Market Price $2.22, gain 71.4%. Mr. Wong (chairman of Boustead) bought more shares in Boustead, boosting his stake to 31.96% in this lightly-traded company. Their most significant announcement to date was on July 30, 2007 when they announced that their 91.7% owned Boustead Projects Pte Ltd had been awarded their largest contract to date: a S$74 million contract to build a high-tech building in Ubi, Singapore. This should contribute strongly to earnings for FY 2008, as well as FY 2009.

3) Swiber - Buy Price $1.01, Market Price $3.20, gain 216.8%. On July 25, 2007 Swiber announced the clinching of a US$12 million LOI in Malaysia. This will push their order book beyond US$200 million and cements their expansion in Asia-Pacific waters. An informal chat with the CEO Mr. Raymond Goh during the EGM told me that he is confident of breaking new markets as there is a “lot of potential” there, but Swiber has to rapidly build up its fleet first so that it can have vessels to deploy for its EPCIC activities.

4) Global Voice - Buy Price $0.1775 (average), Market Price $0.20, gain 12.7%. To make it short and sweet, GV announced two contracts between mid-July and end-July, one with ICE, and the other with Caveo. Investors can read the separate announcements on the technical details from the company’s website. Suffice to say that the only thing to do now is to wait for the company’s results in late August 2007. I am beginning to have a nagging feeling that this may yet turn out to be another one of my investment mistakes. If proven, it will be a good one to tell and learn from.

5) Suntec REIT - Buy Price $1.11, Market Price $1.90, gain 71.2%. Suntec REIT announced a good set of results on July 30, with DPU increasing 11.9% to 2.1 cents/unit from 3Q FY 2006. The dividend will be paid on August 29. In addition, Suntec also announced that they will be purchasing 1/3 of One Raffles Quay for S$941 million from Cheung Kong Holdings, which is held by Hong Kong tycoon Mr. Li Ka Shing. They have also purchased a piece of state land along Penang Road for S$15.9 million. This piece of land is 1,261 square metres and will be used for amalgamation with the existing Park Mall (which is under Suntec REIT’s portfolio of properties) to create an additional floor area of 5,825 square metres. These moves should greatly increase yield in the future and an EGM will have to be convened to seek shareholders’ approval on the acquisitions of One Raffles Quay.

6) Pacific Andes - Buy Price $0.665 (rights-adjusted), Market Price $0.80, gain 20.3%. Nothing much to report for PAH except my attendance at the AGM. This was my first time seeing the faces of the chairman and Board of Directors as their faces are usually conspicuously missing from the Annual Report. The business model seems sound and fishmeal prices have been steady, thus presenting the Group with a new viable revenue stream. One major worry and concern is the high gearing for PAH at about 117%, which Management did little to reassure shareholders about. I will be monitoring the 1Q 2008 results closely.

Overall Portfolio

My overall portfolio has increased by about 118.5% from a new cost of about S$44K as at July 15, 2007. The market value of my portfolio is around S$96.8K. Just for the record, this market value has yet to be supported by concrete earnings; we shall be seeing more earnings reports from Swiber, Global Voice and Pacific Andes in the month of August 2007.

My next portfolio review will be on Wednesday, August 15, 2007 after market close.

P.S. – Sorry for not using an Excel chart as I am in China now and can’t even view my own blog ! (China blocks access to all blogs) Thus, I am posting this directly from blogger.com. Please do leave your comments and I will answer them when I get back to Singapore by Saturday.