01 January 2014

My Portfolio at the end of 2013.



Activities during the year:
  • new fund: RM 72k.
  • stocks sold: all the "value-stocks",  XDL, Notion, TSH.
  • decrease holdings: PwRoot (sold half of it).
  • increase holdings: PPB, AirAsia.
  • new investment: LPI, Supermx, CBIP, DLady, Takaful, UoaDev, AeonCr.
The share price of glove companies had experienced a sharp hike during this year. I'm in opinion that these companies were undergoing a revaluation by the market -- thus we saw PE ratio of Hartalega and Kossan had been rising to above 20 during the year, and I think Supermx will be catching up soon.

While the falling share prices of AirAsia and UoaDev were a bit disappointed, the good performances of PwRoot, PPB, TSH, Takaful and LPI were well above my expectation.

The investment return of my portfolio during 2013 was about 33% p.a., much higher than KLCI's performance.

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27 November 2013

Increase holdings in AirAsia.

AirAsia has always been one of my favourite company.

Besides all those negative factors that affect its short-term prospect,
I had never doubted about its long-term profitability and growth potential.

Hence, I see the recent price correction of its share as an opportunity to increase my holdings, and just bought 2000 shares of AirAsia at RM2.40.

Now the company forms ~10% weight in my portfolio.

Aeon Credit Service Bhd.

This is the first time a finance company is taken into my portfolio.

Few months ago, I had decided to diversify my investment-portfolio into different industry sectors. Hence, in august I bought UoaDev (properties sector), and now AeonCr (finance sector), and the next could be an O&G company.

Bought 1000 shares of AeonCr at RM15.12 (about PE~13) this week, using the proceeds from the sale of TSH recently.

 x x x

Historical Data:

  • During past five years: revenue CAGR ~25%, profit CAGR ~32%.
  • ROE was maintained >20%, improving in recent years. (now >30%)
  • Dividend was increasing at about same pace as profit.
The high growth rate, which I think is sustainable, is the main reason of my investment in AeonCr.

Besides this, there are two reasons I like this company very much.

Niche Market.
AeonCredit had been focusing on its very own special market, namely Easy Payment Plan and personal financing. So far, I had never heard of any other banks that provides installment-purchase facilities similar to AeonCr (other than those through credit card).

So, AeonCr is playing in a niche market that's apparently no competitor at all. When we walk into Carrefour, Jusco, Courts, SenHeng, etc... if we want make an installment-purchase without using credit card, we will find that AeonCr is the only choice.

As a results, AeonCr grew very fast through these years, and able to create brand-awareness successfully. Recently when the company decided to venture into traditional segments (motorcyle and used-car loan), its strong customer-base had make it easier to grab market share very quickly.

Very Low NPL
AeonCr is known to have a higher 'risk profile' of customers -- Many people go to AeonCr only after their loan or credit-card application being rejected by normal banks.

I was actually quite amazed when I find that the company's NPL (non-perfoming-loan) ratio is only 1.64% (as at Aug-2013)...

How good is this figure? As a comparison, NPL ratio of MBSB (whose customers are mostly government-servants and required to sign a salary-deduction-scheme while applying its loan) stood at 2.0% as at Sep-2013. 


 x x x

Long-term Potential
The mother-company of AeonCr had incorporated a subsidiary in India, of which AeonCr (M) holds 20% interest of share. However, I don't think we could see any significant contribution from this associates in near future.


 x x x

Summary: 
AeonCr currently make up ~6% weight in my portfolio.

Target return rate: 15% ~ 25% p.a. in next five years.
Target holding period: keep on holding until its growth rate fall below 15%p.a.

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21 November 2013

TSH sold.

Decided to sell all my holdings on TSH.

Reasons:

1. high debt ratio.
As a result of quick expansion during past few years, the debt of TSH had reach ceiling high. This was not a big problem for me, until I saw the company going through several rounds of private-placement to raise new fund. As a shareholder, I saw my interest in the company being diluted... and what worrying me is, seeing the continuous expansion ahead, this dilution could go on and on in next few years.

2. Profitability affected severely by falling CPO price. 
CPO price had been in down-trend since 2011, and "stabalized" at RM2100~2500 in the past few months. I was expecting that the high growth in FFB production of TSH could support its profit from this impact, but it seems that I was wrong. Now I'm in doubt whether the company could still be profitable should the CPO price fall below RM2000.

EPS of the company is around 9sen/share now, which means that its shares is currently traded at a level of PE>30. Looking at its ever weakening fundamentals, I think this is over-valued, and it's time to exit.

 x x x

Summary of my investment in TSH:
  • Aug-2010, bought 3000 shares at RM1.80, cost about RM5,428.
  • Jun-2011, dividend 6.0sen per share.
  • Dec-2011, Bonus Issue 1:1.
  • Jun-2012, dividend, 3.5sen per share.
  • Jun-2013, dividend, 2.5sen per share.
  • Nov-2013, sold 6000 shares at RM2.82, proceeds RM16,833.
Investment period about 3.3 year.
Average return rate ~42% p.a.

 x x x

After selling TSH, there would be no plantation stocks in my portfolio.
(I wont see PPB & CBIP as plantation-stock although they have some business in oil-palm).

03 September 2013

Increase holding in UOADEV.


Got some new fund this week, and bought 5000 shares of UoaDev at RM2.27.

Now the investments in UoaDev had made up ~10% weight of my portfolio. This had reached the limit I set for properties sector. Hence, UOA will be the only properties company in my portfolio, in forseeable future.

The company is currently in a high growth stage. I'm in an opinion that UOA will rank among the most profitable properties players in this country.

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