Get Nice Holdings (HK:0064) Issued Positive Profit Alert

Based on the preliminary review of the unaudited consolidated management accounts of the Company for the year ended 31 March 2016, it is expected that the profit attributable to owners of the Company for the year ended 31 March 2016 will substantially increase as compared to the same period of 2015 (profit attributable to owners of the Company for the year ended 31 March 2015 was approximately HK$260.6 million). The increase is primarily due to the increase in revenue from margin financing interest income, the increase in income generated through our brokerage services, and the increase in income generated from investment, for the year ended 31 March 2016, when compared to the same period in 2015.

Click here for link to the official announcement.

Best World: Buy Low Sell High

To me, the secret of successful investing is simply to buy low and sell high. But how to achieve it is another matter altogether.

Today, I want to share with you my personal experience on how I achieve it in one of my Singapore stocks.

The Central Provident Fund (CPF) Investment Schemes in Singapore allow us an option to invest a certain amount of our Ordinary Account to enhance our retirement nest egg. The CPF board pays its members 2.5% interest per annum for the money in their Ordinary Account. So, if the members have confidence that they can find stocks that can earn them better than 2.5% annually before they intend to use the money for other purposes like property investment, they should invest in those stocks.  

 

My OCBC bank CPFIS quarterly statement showing the stock (BWL) in my account

I bought 97,000 shares of Best World International Limited (BWL) through CPFIS on 16 Dec 2008 at 20.5 cents apiece. I sold all of them at 64.5 cents apiece on Friday, 22 April 2016. This 3-bagger achieved for me a compound annual growth rate (CAGR) of about 20%, taking into account the dividends paid to my CPF account over the years. This, to me, is no mean feat as Warren Buffett has achieved a CAGR of 19.6% in his 40 years of investing journey.

I bought it then because of:

1. Company had been giving consistent dividend of more than 3%, which was better than CPF’s 2.5%;
2. Company had been almost debt-free and the bosses bought their own company's shares occasionally;
3.  Company had the vision and plans to expand the market to cover Thailand, Indonesia, Taiwan, Myanmar and China; and 
4. The price dropped drastically partly due to the 2008 Global Financial Crisis.

I sold it because of:

1.    The trailing price-earnings ratio is slightly more than14x which, to me, is not attractive anymore and I should be able to find another stock that can give me higher returns than that;

2.    In order to give me a CAGR of 20% investment returns for the next 10 years, BWL has to maintain an earnings per share CAGR of 38% which is a tough call even though I know it may be possible; and

3.    The price came down more than 10% from its peak of 72.5 cents on the same day I sold the stock.

The price of BWL may still go up further after I sold it. What we need to know is that we can never be accurate enough to catch the peak but we have to try to eat the best part of the meat. I may buy BWL back if its price declines to a level that I find it attractive again. Come what may, I will just maintain my discipline to stick to my proven strategies.

 

 So, the two takeaways for today are:

1.    The greatest difference between a stock market and a casino is: You will lose money in the casino if you gamble for a long time as time is always your enemy. You will win money in the stock market if you buy a good stock or an index Exchange Traded Fund (ETF) and keep it for a long time as time is always your friend in the stock markets.

2.    The reason to sell a good quality stock must only be that you can find a better stock elsewhere or that the stock has not been attractively priced by the market.

Superphang

http://superphang.blogspot.sg

Emperor Capital (HK:0717) Issued Positive Profit Alert

Emperor Capital Group Ltd (HK:717) issued a positive profit alert, expects to record a significant increase in the consolidated profit for the six months ended 31 March 2016 as compared with the corresponding period in 2015. Such expected increase is mainly attributable to the increase in interest income from the money lending business benefiting from a stronger capital base of the Group resulting from the Company’s fund raising exercises completed in June and July 2015 and the Group’s strategic focus on the expansion of its money lending business.

The stock was recommended in this blog on 18 April 2016.

Click here for the link to the official announcement from www.hkexnews.hk.

It All Starts With An Appropriate Mindset

Investing has to be a serious business, not entertainment, not gambling.

If you are putting your hard-earned savings in the financial markets, it is important that you participate as a serious investor, not as a speculator. You must make sure that you know the difference between the two.

Many speculators have learnt that luck can only help them a few times but they will soon discover that they are losers in the long run. Without the correct mindset, the cost of not being able to distinguish between a good and a bad investment is just too high to bear.

So, resist the temptations to listen to the tips from your colleagues and friends. Spend enough time to understand deeply the risk vs reward of the proposed investment or give it a miss totally.

All markets work in cycles. Emotional investors inevitably lose money. By contrast, investors who take advantage of the market periodic irrationality have a good chance of enjoying sustained success.

Superphang

http://superphang.blogspot.sg

Never waste a laggard that has consolidated so well

The world may have slowed down and stock markets stagnated. But if you are hardworking, you should be able to spot some gems that are going to rise in the near term.   

I intend to talk about Emperor Capital Group Ltd (HK:717), an investment holding company. The company is principally engaged in providing a range of financial services in Hong Kong. It provides brokerage services for securities, futures and options traded on the exchanges in Hong Kong, the United States, Japan and the United Kingdom, and provides margin and initial public offering financing, as well as loans and advances to its clients in Hong Kong.

The Shenzhen-Hong Kong Stock Connect will surely be launched by the end of 2016 and this cross-border scheme will surely benefit stock brokerages, especially big laggards like Emperor Capital Group Ltd.

It has consolidated very well with shrinking volume for the first two months of this year after reaching its nadir and market players have started to see some price actions at the end of last week. When the stock markets of China and Hong Kong were badly ravaged in July 2015, the management of the Company did a share placement at HK$0.88 apiece which was 50% above the market price then. This has shown that its management has every confidence in the company.

If the price is at HK$0.70, the trailing p/e of Emperor Capital is at 6.43x, p/b at 1.1x, yield at 3.29%. Market cap is at HK$4.03b, a good size for seeing the fast rise in price if there are interests generated in it.  The highest price done in the past year was achieved in last May at HK$2.32 and it has dropped about 70% since then.

All indicators from the chart of Emperor Capital have pointed towards an impending surge once volume is increased by the syndicates after they have accumulated enough ammunition.  It is time to increase your stake for this gem if you have not already done so.

Superphang

http://superphang.blogspot.sg

The Good H-shares In Hong Kong Market Are the Gems In 2016

The 2015 GDP growth for the U.S. is 2%, for China 6.9%, for Singapore 2.1%, for Hong Kong 2.4%. So, it is obvious that China is the happening place. But what about the valuation of the stocks traded in respective bourses based on their average or collective price-earnings ratios (p/e)?

The trailing p/e of Dow Jones Industrial Average (DJIA) and S&P 500 is between 16x to 18x. The trailing p/e of Shanghai Composite Index (SHCOMP) is 16.3x, for Straits Times Index (STI) 12.1x, and for Hang Seng Index (HSI) about 10.4x.

SHCOMP is formed by all the stocks listed in the Shanghai Stock Exchange. These include about 1000 stocks and many bonds and other instruments. For HSI and STI, only 30 blue chips are included.

If we take only the blue chips listed in Shanghai Stock Exchange, the trailing p/e will only be around 10.5x. So, I have identified that high GDP growth happens in China and low p/e stocks are in Shanghai Stock Exchange. What else do you want?

However, some of these blue chips are also dual-listed in the Hong Kong Stock Exchange. Today, they are collectively around 31.9% cheaper than their counterparts listed in the Shanghai Stock Exchange, i.e., the collective trailing p/e of China blue chips listed in HK Exchange is only around 8x --- this is valuation at crisis level by whatever yardstick you may adopt. That is why value investors should place more emphasis on stocks listed in Hong Kong Stock Exchange.

Those dual-listed stocks in the Shanghai Exchange or Shenzhen and denominated in RMB are known as A-shares and those in the HK Exchange H-shares.

Yes, H-shares are what we should focus on. But what about the entry point? It is about now.

There are other reasons why we have to seriously take a look at H-shares at this crucial period.

1.       The probability of getting A-shares blue chips to be included in MSCI Index in this coming June is very high and this will boost the confidence of all market players in the China bourse. The p/e of A-shares blue chips should rebound from 10.5x to 13x and that will mean SHCOMP should reach 3600.

2.       MSCI index did not adopt A-shares blue-chips index in last June because of instability of the RMB and market accessibility issues. Most of the problems have since been largely resolved by the China Securities Regulatory Commission. Once the A-shares are added, prices of both A-shares and H-shares are expected to rise because many fund managers will have to buy them to add to their own funds and all exchange-traded funds that track the MSCI index will be forced to add those shares.

3.       The Shenzhen and HK Connect will surely be rolled out before the end of this year. This will increase market liquidity and brokerages and finance companies will benefit the most.

What you have to do is understand the H-shares and buy some of these gems before the sharks smell the blood.

Superphang

http://superphang.blogspot.sg

Which is better? Technical Analysis or Fundamental Analysis

The answer depends on whom you ask the question.

For me, what I want to pursue can be aptly explained by the famous quotation from the then Chinese paramount leader, Deng Xiaoping (1904–1997): It doesn't matter if a cat is black or white, so long as it catches mice. However, the more fitting statement is: It doesn't matter if a cat is black or white, so long as it catches BIG mice.

So, my strategies will encompass a host of effective methods with a view to making BIG money.

But we need a target. My method has yielded about a compound annual growth rate (CAGR) of 30% so far for the last 10 years. I may have been lucky, but I have achieved it. So, moving forward, a CAGR of 30% is the realistic target I set for myself with the proven strategies I have been adopting.

I invest in properties and stocks. I take investment as a serious business. I want to act like a shark: Only when I smell blood will I go in for the kill.

I invest in Singapore listed stocks, stocks listed in HKEx and the U.S. My strategies on stock investment revolve around three main concepts:

1.    Good stocks at correct timing

2.    Contrarian thinking
3.    Independent thinking

Patience, hard work and discipline are the three important qualities that are very crucial in successful investing but these were not taught in schools. A lot of novice investors lack these and learn about it too late.

I find it is about time that some of my effective strategies can be shared with like-minded investors. And I believe if I can do it, so can you.

Superphang

http://superphang.blogspot.sg

You either get it now or miss it big time: Get Nice Holdings (HK: 0064)

With recent surge of Hang Seng Index in the past 7 trading days, many stocks are now more than 20% from their January bottoms, including blue chips such as Henderson Land (HK:0012), Tencent (HK:0700), and Haitong Securities HK:6837). HSI will consolidate in the coming trading days before it can continue its current uptrend, prompted by a more optimistic outlook on the Chinese economy, which recently reported a manufacturing PMI of 50.2, above a forecast of 49.3 from a Reuters poll, returning to growth for the first time since July 2015. That compares with 49.0 in February, which was the lowest reading since 2011.

As HSI is due for consolidation, there are many laggards in the market to be picked from. One of them would be Get Nice Holdings (HK:0064), a company that recently spun off its securities business to form Get Nice Finance (HK:1469), which surged more than 25% in the last five trading days alone. For the past five trading days, Get Nice Securities has outperformed many brokerages such as Emperor Capital (HK:0717) , which rose 10%; Bright Smart Securities (HK:1428), which rose 10%; and Citic Securities (HK:6030). However, this has not reflected in the price of Get Nice Holdings, which holds more than 72% of stakes in Get Nice Finance, whose price hovered around HK$0.27 to 0.285 in the past five days as of 15 April.

Looking at the history and balance sheets of Get Nice holdings, the company has been giving dividend consistently of at least HK$0.02 a year for the past five years. Yield is at a solid 7% based on current price. The company issued Rights 1 for 2 at HK$0.28 in March 2015. Of the company's current share price, HK$0.18 in each share is cash, i.e. 65% of shares are cash, a sign of healthy financial performance.

It is only a matter of time that this company will be targeted for speculation or acquisition, due to the relatively small market cap, which is only slightly more than HK$1.9b.

Technically or fundamentally, there is no better time to get Get Nice Holdings. Even when it reaches the target price of HK$0.40, the yield will still be a solid 5%.

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