Mid-February 2008 Portfolio Summary and Review

This half-month consisted mainly of full and half-year results releases, and all eyes are now trained on companies as they report their earnings report card. As far as I can tell, the Business Times is sometimes not accurately reflecting the underlying core net profit because some companies’ net profit was boosted by a one-off gain or a revaluation of property values. The discerning and intelligent investor should take note of each company’s numbers and business and therefore not rely too much on the summaries provided in the papers. After all, the hard work involved in analyzing a company should never be neglected !

China Fishery and Pacific Andes both reported their FY 2007 and 3Q FY 2008 results on February 14, 2008 respectively. I shall be undertaking an analysis of their results in due time and will share my analysis and insights for each company. More of my focus shall be on analyzing China Fishery as it is their fishing business which represents the growth driver which is powering earnings for Pacific Andes as well. Swiber should be releasing their FY 2007 results close to the end of February 2008, and I shall follow-up with an analysis and commentary as well.

Below is the summary of my investments and related news as at February 15, 2008 (STI at 3,088.68 points).:-

1) Ezra (Vested since October 6, 2005) - Buy Price $0.645 (bonus adjusted), Market Price $2.35, Gain 264%, YTD Loss 29.2%. There was no news from the company for the half-month ended February 15, 2008.

2) Boustead (Vested since September 13, 2006; averaged down November 13, 2006) - Buy Price $1.295 (average), Market Price $2.30, Gain 77.6%, YTD Loss 4.6%. There was no news from the company during the half-month ended February 15, 2008.

3) Swiber (Vested since February 14, 2007) - Buy Price $1.01, Market Price $2.32, Gain 129.7%, YTD Loss 32.4%. Swiber announced a joint venture collaboration with Principia on February 12, 2008 which I had written a blog post about recently. On February 14, 2008, they announced that they had clinched a contract extension worth US$35 million from an oil major. This LOI is an extension of their win in Nov 2007 from the same oil major and the total contract value is about US$66 million. The work is expected to commence in 2Q FY 2008 and will be completed by the end of FY 2008 and involves the transportation and installation of three pipelines in the waters off Indonesia. It is hoped that with Swiber’s expanded fleet, they will be operational ready to capture more contracts or larger value to boost earnings.

4) Suntec REIT (Vested since December 9, 2004) - Buy Price $1.11, Market Price $1.55, Gain 39.6%, YTD Loss 9.4%. There was no significant news from this REIT for the period ending February 15, 2008.

5) Pacific Andes (Vested since March 29, 2006; Rights Issue July 11, 2007 at S$0.52 per share; averaged down August 17, 2007) - Buy Price $0.655 (rights-adjusted), Market Price $0.50, Loss 23.7%, YTD Loss 20.6%. As mentioned, PAH’s 3Q 2008 results were released and I shall be doing a review on them soon.

6) China Fishery Group (Vested since November 20, 2007) - Buy Price $1.50 (average), Market Price $1.84, Gain 22.7%, YTD Loss 0.5%. CFG also released their results for FY 2007 and declared a final dividend of 2.19 cents per share. I shall be reviewing their financials and strategic plans shortly and am expecting the Annual Report to arrive by April 2008.

7) First Ship Lease Trust (Vested since January 14, 2008) - Buy Price (Averaged Down) $1.105, Market Price $1.10, Loss 0.5%. There was no significant news from this shipping trust during the period.

Overall Portfolio

My overall portfolio has increased by 61.7% without taking into FSL Trust’s cost. If included, the gain is 44.5% from a cost of S$80.4K as at February 15, 2008. The market value of my portfolio without FSL Trust is S$94.2K, and if FSL Trust is included then the portfolio value is S$116.1K. Realized gains remain at about S$4.9K as CFG has not gone ex-dividend yet with their 2.19 cent/share final dividend.

Comparison against STI

The FTSE STI had declined by 11.3% since the start of 2008. Without FSL Trust, my portfolio has declined 19.3% thus under-performing the FTSE STI yet again. This is not too much of a concern as the portfolio is meant to be long-term and what I am doing is simply using short-term (half-month) yardsticks to measure performance against the FTSE STI. The “true test” will probably be about 3 to 5 years later to see how my overall portfolio has performed, and hopefully I will still be blogging by then !As a result, to date in 2008, my portfolio has under-performed the new benchmark FTSE STI by 8 percentage points.

My next portfolio review will be on Friday, February 29, 2008 after market close.