My Portfolio at the end of 2010.

Activities during this year:

• Stocks sold: Titan, MAS-Pa.
• Stocks bought: Notion, TSH, XDL, Kossan, Rex, IQgroup, UMSNGB.
• Money added: RM 6,000 in July, and RM 3,000 in Oct.

The buys and sells are mainly a result of a trimming process of my portfolio during the middle of this year. Kossan was bought when a new RM3000 fund was injected in October. Rex, IQgroup and UMSNGB are bought based on net-working-capital approach.

For the year 2010, my portfolio's average return rate is about 34% p.a., quite satisfied for me as it's much better than KLCI's performance.

Increase holdings in glove sector -- buying Kossan.

Recently, share prices of glove-companies had experienced some great fall.

I had decided to take the opportunity, and already bought in 1000 unit of Kossan on Friday.

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Why choose Kossan instead of Harta?

Diversification.

Hartalega is still my favorite glove-stock now. However, it had already made up 25% of my total portfolio value. Further increase in the weight will make me feel uncomfortable. Thus, I decided to buy in other glove-maker, in order to have some diversification.

Now that Harta and Kossan together form about 30% of my portfolio value. This already near my upper-limit. I will stop buying any glove-company in future, until their weight in my portfolio drop into a more comfortable level, e.g. 20~25%.

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Why choose Kossan instead of Topglov or Supermax？

I'm in opinion that all these three companies are great for investment. In fact, I often recommend people buying (diversify) into all these 3 companies.

There are two reason why I choose Kossan among the top-three's.

First and the main reason, I'm more favor into nitrile glove makers (that's why I invested in Hartalega). Among these 3 companies, Kossan has highest exposure into the nitrile glove market -- 40% of its revenue are from nitrile-glove. And I believe that the ratio will increase further in the coming years.

2nd reason, Kossan has a lowest PE among three companies. Now, the prospect of these companies are all great. However, people may loose interest on them if their growing pace slow down in the future. And this may lead to a lower appraisal of their values and share prices. For me, Kossan's lower PE means a higher safety-margin.

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UMS-Neiken Group Bhd.

[阅读中文版本]

The new member of my value-stocks-portfolio. Bought at 25 sen per share, a discount of almost 40% from its net-working-capital (based on Jun-2010 report).

Listed on KLSE since 2006, UMS-Neiken is principally involve in the manufacturing of electrical wiring accessories.

a quick glance:

• PE ratio ~ 8. (calculated from three years average earnings).
• net dividend yield ~ 4%. (three years average).
• Cash per share ~ 9 sen. (at Jun-2010)
• Debt/Equity ~ 10%. (at Jun-2010)

Revenue fell significantly in 2009. However, EPS and dividend were relatively stable compared to 2008.

Its inventories, receivable, and borrowings show a slight increase recently.

The trading volume of its shares is quite low.

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Xidelang Holdings Limited

In early July, this company came into my sight when I was browsing through the postings in Investalks Forum.

Once I saw it, my eyes just can't move away from its unbelievable low price -- a PE as low as 2!

After several days of study and collecting information, I found that its financial situation and growth potential is great. Then, I decided to buy it at 36.5sen.

Here's some attractive numbers of XDL:

• ROE ~ 40%。
• Debt/Equity = 0.24.
• During years 2006 ~ 2009: Revenue CAGR = 59%, profit CAGR = 79%.

The numbers are great, yet it was trading at a price of PE=2, sounds not logical...

I had gone through its IPO prospectus, annual reports, also browse through some blogs and forums, and search for any information available on the internet. Finally came to my own conclusion about its extremely low price -- these newly listed China company just can't get confidence from the public! No matter how good is the data, people just don't believe in it. Manny worrying that it's another conman company.

I don't have a strong confidence in XDL either. But my thought was simple -- Since I didn't see any suspicious point in the data, I choose to believe it. But, isn't it too risky? ... Yes, it's risky -- if you put 50% of your fund in it. For me, I just invested RM5k+ , i.e. just about 10% of my entire portfolio value. I feel quite comfortable with this.

I think I will hold on to this stock for several years, as long as its fundamental remain strong.

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x x x

The following spreadsheet shows some data that I sort out from XDL's IPO prospectus and annual report.

(NOTE: Currently there are 3 subsidiaries under XDL. They were separated entities before the listing. Its IPO prospectus only provides separated balance sheets data for these three entities. The consolidated data below is from my own calculation -- I sum up their numbers, then eliminate the related-parties & inter-companies' borrowings/receivables. There will be some errors in the calculation, which is unavoidable, due to the limited information disclosed.)

I had put the data on Google-Docs (click here to see the complete spreadsheet) for easier sharing. I will continuously updating the data in the future.

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TSH Resources BHD - strong growth ahead.

(I bought 3000 units of TSH at RM1.80, in early July.)

There are three business segment in TSH -- palm oil, cocoa, and wood products. While the palm-oil segment are growing exponentially, the other two segments were facing difficulties in recent years.

In 2009, palm-oil business had contributed about 80% of TSH's revenue, and 100% of its profit. Hence, we can say that the future of TSH is relying on palm-oil. So, I simply ignore the wood & cocoa segments, concentrate my analysis on its palm-oil business alone.

Let's take a look at the historical figures of THS' palm-oil segment: (RM million)

	Revenue	Profit
2001	83.0	14.5
2002	143.8	19.6
2003	233.5	35.8
2004	272.7	41.9
2005	318.0	35.7
2006	358.3	48.9
2007	575.7	85.3
2008	814.5	88.5
2009	784.2	118.6

During these years, the palm-oil business was growing at a CAGR of 30%.

In recent years, TSH had been aggressively purchasing plantation-land in Indonesia. Today, its accumulated land-bank area already closed to 100k hectares. Among these, only 25k ha had been planted with oil-palm trees. And in these 25k ha planted area, 13k ha are newly planted trees, age only 1~3 years old (i.e. non-matured). The remaining 12k ha trees are in prime matured stages, age 4~20 years.

Hence, we can predict that the oil-palm production of TSH is going to doubled within 3 years, which translated into a CAGR of > 25%.

Then, according to its management, current TSH's expansion plan is to plant up to 5000 ha of new estate per annum. If this target is achieved, then the matured-estates of TSH will be growing at 20% p.a. pace for another 3 years.

Seeing the huge land bank behind it, I believe that TSH will keep its double-digit-growth for many years, deep into the future.

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