Wednesday, April 30, 2008

End-April 2008 Portfolio Summary and Review

The latter half of April 2008 was indeed a fruitful period as I managed to attend two AGMs of the companies I own. One was China Fishery on April 28 and the other, Swiber Holdings Limited, was just held today at 1 p.m. There were also a couple of announcements from Ezra, FSL Trust and Swiber while FSL Trust also released their 1Q 2008 results. I will be expecting Suntec REIT’s results this evening after market close.

May 2008 will be a more interesting month as I will be expecting results releases from Pacific Andes (FY 2008), Boustead (FY 2008), Swiber (1Q 2008) and China Fishery (1Q 2008). There will be a lot of reading and analyzing to do and I should be kept busy most of the month.

Below is the summary of my investments and related news as at April 30, 2008 (STI at 3,147.79 points).:-

1) Ezra (Vested since October 6, 2005) - Buy Price $0.645 (bonus adjusted), Market Price $2.40, Gain 272%, YTD Loss 27.2%. Ezra announced, on April 21, 2008, that they had acquired a company in UK called Telemark Limited over a period of 4 years. Telemark is meant to enhance Ezra’s Engineering and Fabrication division and they possess the skill set and expertise to add value to Ezra’s Vietnam Yard. The company is currently profitable even though it has NTL and Telemark’s expertise will be integrated with Ezra’s, thus creating more value for clients. The third part of my Ezra review is also pending as I have been busy attending AGM and analyzing the Annual Reports of China Fishery and Swiber, so please do bear with the delay.

2) Boustead (Vested since September 13, 2006; averaged down November 13, 2006) - Buy Price $1.295 (average), Market Price $2.05, Gain 58.3%, YTD Loss 14.9%. This evening, Boustead announced that they had increased their stake in GBI Realty Pte Ltd by 10% from 30% to 40%, through an aggregate cash consideration payment of S$9.25 million. The principle activities of GBI are those relating to commercial property development and I guess the company is using its cash hoard to increase stakes in companies which show potential, in order to recognize more profits from them for shareholders.

3) Swiber (Vested since February 14, 2007) - Buy Price $1.01, Market Price $2.45, Gain 142.6%, YTD Loss 28.6%. On April 29, 2008 (yesterday), Swiber announced a small contract with a repeat customer (NuCoastal) for the EPSC of an SPM Calm Buoy. This Buoy is to be used by NuCoastal at its Songkla Field and the contract value is worth S$7,752,576. It will be targeted for delivery in the 4Q 2008, so the revenues from this small contract will be recognized in FY 2008’s financials. I also attended Swiber’s AGM today at 1 p.m. and will be providing a write-up on the snippets of the meeting and my interactions and discussions with various Board Members (including the chairman Mr. Raymond Goh).

4) Suntec REIT (Vested since December 9, 2004) - Buy Price $1.11, Market Price $1.51, Gain 36.0%, YTD Loss 11.7%. Suntec REIT will be releasing their 1H FY 2008 financial statements this evening, after market close.

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 $0.49, Loss 25.2%, YTD Loss 22.2%. There was no news on Pacific Andes during the period ended April 30, 2008.

6) China Fishery Group (Vested since November 20, 2007) - Buy Price $1.50 (average), Market Price $1.51, Gain 0.7%, YTD Loss 18.4%. There were no announcements from CFG; but I did manage to attend the AGM and speak to the Finance Director, Mr. Dennis Chan; as well as the CEO Mr. Ng Joo Kwee. I will be posting up snippets of my discussions with them on the prospects and growth plans of the company soon.

7) First Ship Lease Trust (Vested since January 14, 2008) - Buy Price (Averaged Down) $1.105, Market Price $1.05, Loss 5.0%. FSL Trust released their 1Q FY 2008 results on April 23, 2008. A DPU of USD 2.59 cents per unit was declared and it will be payable on May 30, 2008. At the same time, on April 21, 2008, the Trust also announced the acquisition of two crude oil tankers from Turkey-based Geden Lines for US$140 million, drawn down from their US$ 290 million credit facility which was in place since Jan 2008. This acquisition is immediately accretive to DPU and will add 0.16 US cents DPU for the next quarter (2Q 2008) and 0.28 US cents DPU for every subsequent quarter thereafter. FSLT is still maintaining its policy of 100% payout and is not retaining any cash so far; thus it can be said to be pretty aggressive. The Trust is confident of meeting their target of US$300 million of acquisitions for FY 2008 (they only have another US$160 million left to achieve this goal). As the exchange rate for the DPU has not been finalized as at the time of writing this post, I will NOT be factoring in the dividend as realized gains within my portfolio review.

Overall Portfolio

My overall portfolio has increased by 57% without taking into FSL Trust’s cost. If included, the gain is 40% from a cost of S$80.4K as at April 30, 2008. The market value of my portfolio without FSL Trust is S$91.5K, and if FSL Trust is included then the portfolio value is S$112.4K. Realized gains remain at about S$4.9K until the ex-dividend date for China Fishery and Ezra come along, and I have also not included FSLT’s dividend because of the exchange rate.

Comparison against STI

The FTSE STI had declined by 9.61% since the start of 2008. Without FSL Trust, my portfolio has declined 21.6%.To date in 2008, my portfolio has under-performed the new benchmark FTSE STI by 12 percentage points.

My next portfolio review will be on Thursday, May 15, 2008 after market close.

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