Reflect on 2017 & Be Ready for 2018

My investing journey for 2017 has come to a close and I have hit my target of making at least 30% CAGR. I have had more winning bets than losing ones.

My solid bets in 2017 were / have been:

• AEM (made 174.8%, profit mostly realised)
• 800 Super (up 131.9%, profit mostly realised)
• Avi-Tech (up 72.3%, about half realised)
• Ezion W200424 (made 68.7% in 5 months)
• China Vast (6166.HK) (a paper gain of 49.8% in 5 and a half months)
• Get Nice Holdings (64.HK) (made 22% in one and a half years)
• HS H ETF (2828.HK) (a paper gain of 21.9% within 14 months)
• China Starch (3838.HK) (a paper gain of 18.7% within 4 months)
• Japfa (made 17.5% within a month)
• Hanwell (made 16.9% within 2 weeks)
• Noble (made 10.6% within 3 days)

Stocks like Emperor Capital (717.HK), CE Huada Tech (85.HK), China Saite (153.HK), Excelpoint and Federal are either down or not making much for me. I will patiently wait for Mr Market to uncover their intrinsic values.  

There are valuable lessons to be learnt for me to keep improving. The two important ones are:

Lesson 1: Have more patience to keep my multi-baggers

It can be easy to spot a multi-bagger but it is difficult to hold it all the way till it reaches almost its peak so as to clinch the greatest profit possible. It definitely calls for skills, knowledge, gumption and patience. AEM is one such stock as it has surged about 5.4 times (or an ROI of 440%), including the one-for-two bonus issue but excluding dividend, after I started my first purchase in January 2017. I divest the bulk of my position and at the close of 2017, made an ROI of only 174.8%, which, on hindsight, could have been much better if I have had just more patience to keep it before its earnings performance starts to deteriorate.  

Lesson 2: Improve on speed in spotting growth stocks

This is the area that I have been trying to improve so that I could have better diversification and that I will not miss the chance to buy growth stocks at more attractive prices. I believe I have some good results and improvement with my hard work, skills and knowledge gleaned over the years.

Most of the time, the investing journey is rather monotonous. But there is no short-cut other than working hard and adopting all the effective knowledge and skills so as to beat the rest of the market participants in this cruel arena.

Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.”
It thus makes more sense for me to make my money work hard for me and only when I meet my ROI target will I enjoy this journey.

I have also formulated my new strategies for 2018.

Strategy 1: Apply my new win-big-lose-small method

The December’s vacation has given me a clear mind to come up with a new method to increase the probability of buying win-big-lose-small stocks. From my back testing of this method, it should bring my ROI to be around 50 percent. Let’s see.  

Strategy 2: Increase my war chest

To me, the war chest has to be more than just money reserved for emergency. It has to include lots of spare cash to take advantage of extreme pessimism in the market when others are fearful. The second half of 2018 is probably the time for my war chest to be lucratively deployed.

Strategy 3: Get ready to short-sell some euphoric stocks

The gradient of a bearish decline can be 4 times that of a bullish market climb and there is a higher chance for the global markets to enter a bear market in 2018. During a crisis, shrewd investors cannot be doing nothing and just wait for the storm to be over.

I hope I have the wisdom then and have been ready to clinch the golden opportunity to short-sell some irrationally exuberant stocks and to pick up great stocks at bargain basement prices after the dust has settled and with the cues from some important leading indicators.

Conclusion

Hard work + research + knowledge + skills + patience --- these old-fashioned tenets will still be the key pillars of my investing weaponry. Successes beget more successes and I can only be more motivated. 

2018 = 饿灵要发, and I look forward to a very exciting and prosperous 2018.

Superphang
https://superphang.blogspot.sg

When will AEM hit my current target price of $4.09?

With the company keeping having share buybacks and its solid orders on hand, the only thing that is holding its share price from not meeting its intrinsic value is time.

But I would like to estimate the time AEM will reach my target price of $4.09 (corresponding to p/e of 8x) from the attached self-explanatory chart. AEM investors including myself should have a big angpao about two weeks before the coming Chinese New Year.

AEM daily chart at the close of market on 28 Dec 2017

Superphang

https://superphang.blogspot.sg

Interpretation of Convertible Notes for China Vast (6166.HK)

The 6% Coupon Rate Convertible Notes

On 27 December 2017 (after trading hours), China Vast (6166.HK) announced the issue of the Convertible Notes and Notes in the principal amount of up to US$50 m and up to US$110 m. Upon full conversion of the Convertible Notes at the Conversion Price of HK$4.75 per Conversion Share, a total of 82,105,263 Conversion Shares will be issued, representing approximately 5.01% of the existing issued share capital of the Company and approximately 4.77% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares. No listing of the Convertible Notes and the Notes will be sought on the HKEx or any other exchanges.

My interpretation

It is obvious that this convertible notes issue has negative connotations of the share prices in the short term. I think the money is required for the Xiongan New Area (河北雄安新区) project, which will be coming soon in 2018. The boss bought so many shares from the market and now he launched his plan to get more money. He must have something up his sleeve.

It is only natural that the boss planned this more for himself if he has put in so much money and effort into a company that he knows best and have great confidence in.

Two things that I can deduce:
(1) $4.75 is what the boss takes as the baseline of the value of his company at this stage, and below which he is not willing to let the bondholders have it. The price is about 21.8% premium to his highest price paid to the market so far. I am glad that my target price of $4.77 estimated more than 5 months ago is very close to the price fixed by the boss now.  See my earlier post: http://superphang.blogspot.sg/2017/07/solid-peg-ratio-and-rampant-insider.html

(2) His willingness to give a generous 6% coupon interest rate to the bondholders when the company is not in any dire straits speaks volumes about his great confidence of the business going forward.

Conclusion
With the aforesaid deduction, I have great confidence that China Vast will have a solid report in its next earnings announcement, expected to be on 3^rd April 2018.   

Superphang

https://superphang.blogspot.sg

Stellar FY2017 Earnings Performance of Emperor Capital (717.HK)

Refer to my earlier post on Emperor Capital (717.HK) dated 18 Oct 2017:
https://superphang.blogspot.sg/2017/10/get-good-dividend-while-waiting-for.html

Earnings announcement on 7 Dec 2017 for FY2017 ended 30 Sep 17: 

EPS = 9.96 HK cents

P/E with current price of 58 cents is 5.82x. This is equivalent to an earnings yield of 17.2%.

With earnings growth at 25.4%, PEG = 0.229. This stock can easily be a 3-bagger should Mr Market price the share more rationally.

Dividend yield is at 5% (1H dividend at 1.38 cents, and now final dividend at 1.52 cents, total 2.9 cents for FY2017 which is an increase of 16.935% compared to previous FY.

Emperor Capital (717.HK) daily chart

The stellar earnings performance and solid dividend yield of Emperor Capital seem to be moving in the opposite direction of its price movements. However, I have confidence that Mr Market will uncover this gem sooner rather than later. Meanwhile, I will just get the solid dividend while waiting for its intrinsic value to be realised.  

Superphang

https://superphang.blogspot.sg

CE Huada Tech (85.HK) – A Growth and Turnaround Stock

I bought China Electronics Huada Technology (0085.HK) within the price range of $1.50 to $1.75 from 2 Nov to 7 Nov 2017 as I believed it would be a multi-bagger going forward. I thought I would have the time to recommend it to my followers at about the average price that I bought it but it was not to be. It closed at $1.70 today, 7 Nov 2017, up 16.44 percent within three trading days. However, at current price, it is still grossly undervalued and I will not be surprised if it becomes a 5-bagger within a year or so. I will load more of this gem if there is a substantial pullback.

(1)            About China Electronics Huada Technology Limited

China Electronics Huada Technology Company Limited (abbreviated to CE Huada Tech), formerly China Electronics Corporation Holdings Company Limited (before 21 Sep 2017), is a Hong Kong-based investment holding company principally engaged in the design of chips. The main businesses of the Company include the design, manufacturing, and sales of integrated circuits chips. Its main products include second generation identification (ID) cards, social security cards, fuel cards, telecommunication cards, electric cards, transportation cards, RFID and wireless networks equipment, among others.

(2)            Seemingly Poor 1H2017 result belying the actually very stellar performance

CE Huada Tech reported very poor 1H2017 performance with its net profit declined by 86.1% to $143 million compared to 1H2016’s figures.  However, its revenue had increased by 2.5% to $688 million and EPS was 7.04 cents.
I knew this could present an opportunity for me if I could go deeper to find out more about the details. This “poor result” has caused its share price to keep falling after the announcement of its 1H2017 result. However, the decline of the net profit was due to the one-off profit of $621 million derived in June 2016 through disposal of 100% equity interest in China Electronics Technology Development Co. Ltd (中電科技) to China Electronics Optics Valley Union Holding Company Limited “CEOVU” (中電光谷, 798.HK), for a consideration of 1,058,530,083 new ordinary shares of CEOVU and subscription in cash of HK$1,193,175,934 for 1,491,469,917 new ordinary shares of CEOVU which CE Huada Tech has now a 31.88% interest in. CEOVU has its shares listed on HKEx and is principally engaged in the business of development and operation of large-scale business parks in the PRC.

The value of 31.88% of CEOVU (798.HK) that CE Huada Tech owns is close to HK$1.87 billion, and market cap of CE Huada Tech is only HK$3.45 billion, which means the IC business of CE Huada Tech is worth only HK$1.58 billion, which is already worth twice the price of a shell company. “Cheap” is the only word that I can use to describe this stock.

(3)            Over-punished Depressed Prices Making the Stock Grossly Undervalued

Weekly Chart of CE Huada Tech

(a) Price and volume were both up recently, signifying the uptrend has started.

(b) The price hit the peak of $4.83 on 19 May 2015 when the net profit was only $177 million. The estimated net profit for FY2017 is about $360m and the forward net profit in 2018 will be $650m, and there is no logic for the price to remain at this current depressed level.

(c) With the 7 Nov 2017 closing price of $1.70, the forward p/e for 2018 is a very attractive 5.31x and this depressed valuation among its peers makes it a good candidate for it to be a multi-bagger hands down. 

(d) Its dividend yield at current price is 1.765%, which is very attractive for a growth and turnaround stock. 

(4)            The support from the government

The single commodity that China imports the most currently is neither food nor oil, but IC chips and the value involved is about US$230 billion in 2016.

China Electronics Corporation (中国电子信息产业集团有限公司, short name CEC which is the grandparent company of CE Huada Tech), Integrated Circuit Fund (国家集成电路产业投资基金股份有限公司 which is funded by China Ministry of Finance), and Sino-IC Ltd  (华芯投资管理有限责任公司 ) signed an MOU in Beijing on 18 July 2017 with the understanding that Integrated Circuit Fund will pump 20 billion RMB into CEC to support its development of IC-related business. It is highly speculated that most of this fund will go into CE Huada Tech.

CEC owns 100% of Huada Semiconductor which in turn owns 59.42% of CE Huada Tech. CE Huada Tech changed its name from China Electronics Corporation Holdings Company Limited in Sep 2017 to avoid being confused with its grandparent’s.

The China government gives CE Huada Tech the exclusive rights to produce IC chips for passports and identification cards, which involve the highest security level. What is noteworthy is the next three years will be the peak period for producing the IC chips for passports and identification cards and the profit margins for them and the stability of this exclusive business are both high.

Compared to other high tech stocks the China government supports that have an average p/e of above 30x, the price of CE Huada Tech can easily go up by 5 fold if 30x p/e is anything to go by.

(5)            The positive strategies of the grandparent company

The grandparent company, CEC, set a target in 2015 that they would securitise more of their IC design and manufacturing business in the following three years. These two years will be the critical period for CEC to consolidate and issue new shares for their IC business. It is very clear that CEC will pump more capital into CE Huada Tech soon and the price should rocket up following the move.
　　

(6)      Possibility to be included into the Shenzhen-HK Stock Connect

One of the rules for A+H stocks or stocks listed in HK stock exchange to be included in the Shenzhen-HK Stock Connect for both Shenzhen and HK investors to trade is that the market value has to be at least HK$5 billion. It is easy for CE Huada Tech to reach the threshold to be included in the Stock Connect as it has only about HK1 billion free float in the market. To achieve that, either the price has to be pushed up by market players to about $2.50 or the grandparent company has to inject new fund into it.

(7)            Conclusion

With the explosive growth rate in the coming three years, strong governmental support, the likelihood that its grandparent company CEC will pump in new capital, its current low p/e and its historically powerful surge at opportune moments in 2007 and 2015, I do not think my target price for CE Huada Tech at $3.00 within half a year is too ambitious. My target price a year from now is $5.00.

Superphang
https://superphang.blogspot.sg

Get good dividend while waiting for Emperor Capital (717.HK) to rocket up

I started to invest in Emperor Capital (717.HK) since early 2015 and I have made solid returns from it so far. It ever surged 43% in a day (on 13 April 2015) during its heyday in 2015 and I was vested then. However, after the big plunge in June 2015, the performance of this stock has lagged far behind Hang Seng Index and it is time we took a closer look at it, load up on it and bide our time to wait for its next big move while collecting its attractive dividends.

(1) Shrewd management with smart moves

I can see that the management of Emperor Capital has been shrewd and prudent from their moves so far.

They invited China Huarong Asset Management Co Ltd (2799.HK) in May 2016 to purchase 380 million new Emperor Capital shares at 66 cents apiece. China Huarong has now a market cap of HK$ 148.076 billion, and its share price has gone up 35.84% since the start of this year.

In late 2016, Emperor Capital invited another giant, China Taiping Insurance Holdings (966.HK), to purchase 613 million new Emperor Capital shares, also at $0.66 apiece. China Taiping Insurance has now a market cap of HK$89.132 billion and its share price has gone up 56.25% since the start of this year.

Both China Huarong and China Taiping Insurance have their businesses in China and they collectively own about 9% of Emperor Capital and they should be able to provide synergy to Emperor Capital now or in time to come.

If you buy Emperor Capital today, your price is only one cent more than the two giants’.

(2) Hot property market helping its mortgage loans to grow

The hot HK property market has helped Emperor Capital in boosting their mortgage financing business even long before the stock market started the run. Its EPS is expected to be 10 cents in FY2017 and 13 cents in FY2018.

(3) Many attractive factors for my purchase of 717 shares

I can think of the following attractiveness of Emperor Capital:

Taking 18 Oct 2017’s closing price of 67 cents, its rolling p/e is 7.67x and should be lowered to 5.15x next year. Its already attractive current p/b of 0.936x will be lowered further to below 0.73x next year. Its forward dividend yield for whole of 2017 should be more than 4%.

It has plunged about 71% from its height achieved on 27 April 2015. It ever surged 98.18% in a day, on 8 Dec 14, from $0.55 to $1.09, just that it had not been on my radar then. But at least I caught the second highest surge of 43% on 13 April 2015. I like its volatility at the picky time and I am prepared to catch the next crazy surge which I think is around the corner.

In HK market, stocks below HK$1 is considered penny and the probability of penny stocks to shoot up fast will increase as time goes by.

Next earnings announcement for Emperor Federal should be on 8 Dec 2017. It should be a solid result and higher dividends should be declared. The last time the major shareholder Albert Yeung Holdings Limited bought Emperor Capital heavily within a period was about half a year ago, with the highest price done then at $0.69, higher than the closing price of $0.67 concluded on 18 Oct 2017 when this post is written.

(4) Conclusion

Emperor Capital is in the midst of an exciting confluence of seemingly positive factors  --- Expected good growth, attractive dividend, shrewd management, a penny stock in second-half of a bull run, a laggard with explosive surge potential --- all driving towards one conclusion – My target price of $1 by 28 February 2018, an upside of 49% gain from here.

Superphang

https://superphang.blogspot.sg

Uptrend of China Vast (6166.HK) is intact

Click on the link below to read my earlier post on China Vast (6166.HK) dated 25 July 2017:

https://superphang.blogspot.sg/2017/07/solid-peg-ratio-and-rampant-insider.html

Wang Jianjun, Chairman of China Vast, kept buying his company shares before and after my post. Just 9 Oct, 10 Oct, and 11 Oct, in 3 consecutive days, he spent a total of HK$77.2163 million or S$13.35 million to purchase a total of 20.517 million shares at an average price of $3.763528 apiece, increasing his holding in his company shares to 68.94 per cent. 

There is no doubt that he has been highly confident of the performance of China Vast going forward. With the closing price of $4.31 on 13 Oct 2017, its rolling p/e is still a superb 6.008x even after the share prices has surged more than 62% since about two months ago.

I believe the next thing he could do is to privatise the company. He could also declare a bonus issue, or he could give fat dividends to himself and the shareholders like me. My imagination could be wrong but nobody can stop me from having a dream that is plausibly, if not highly, realistic.

I sold about 9% of my initial position and with these rampant purchase actions by the Chairman, I am more determined to hold my remaining shares for a higher target price now.

My hard work has brought me a total realised and paper gains of S$62,530 or 62.75% of my initial outlay, and this is achieved in two months and a day. Wow, spring has come early this year and definitely not bad an early angpao for me!   

Superphang

https://superphang.blogspot.sg/

Emperor Entertainment Hotel (296.HK) vs Emperor Capital (717.HK)

The insiders from the Yeung's family has been rampantly buying 296.HK quite recently and the highest price they bought was $1.90, very close to today's (13 Oct 17) closing price of $1.92.

The last time Yeung's family bought 717.HK heavily within a period was about half a year ago, with the highest price done then at $0.69, higher than today's closing price of $0.66.

Both stocks can be considered for long-term investment for their attractive dividend yields and p/e. But I will prefer 717.HK for its more explosive power of surge when the securities brokerage sector starts to move up after a period of sizeable increases in transaction volume on HKEx or Shanghai Stock Exchange.

The stage of the bull run has come to the second half which means second liners and penny stocks will be the BB's targets and 717.HK, from past experience, should be market’s darling soon.

I estimate earnings per share for 717.HK will be 13 cents for this financial year and this will translate its p/e to a superb 5.08x. I strongly believe that insiders of 717.HK will start buying the shares way before 8 Nov 2017 in anticipation of the good year-end earnings announcement.

I have started loading up on 717.HK and I am looking forward to a fat year-end angpao from this investment.

Superphang
https://superphang.blogspot.sg/

Is BYD (1211.HK) too high now?

BYD (1211.HK) closed on 22 Sep at $70.60, up 50% within 10 trading days. Is it too lofty to go in? What were the push factors in the past 10 days?

BYD boss believed that China will have all electric cars or hybrid electric cars on the road by 2030, a target which is much more ambitious than even the Europe zone's.

But 50% surge within so short a time can lead to a crisis to BYD share prices due to the following reasons:

1. The surge was driven by policy changes, not by compelling consumer demand or growth of the industry or new technology.

2. The crude oil prices are still very low for existing car owners to have the urge to change theirs to electric cars.

3. Too much exuberance in BYD share price which has not been backed by its financial performance. BYD’s half-year earnings actually retreated 24% and it has been estimated that the earnings will drop by 20% for the first 9 months compared to the same period in last FY. Its current p/e (ttm) is 33.79x (based on $70.6 closing price on 22 Sep) and it is almost certain that BYD will have negative growth in this FY. These figures are not compelling for shrewd investors to invest in it at this stage.

If anyone who have bought some BYD earlier, my suggestion is that they can sell it should the price retreat to $68 or/and when the stock opens-high-closes-low.

I tried to compare four China automotive stocks listed on the HK Exchange:

1.      Geely (175.HK): p/e (ttm) at 36.25, dividend yield at 0.51%

2.      BYD (1211): p/e (ttm) at 33.79x, dividend yield at 0.58%

3.      Brilliance (1114.HK): p/e (ttm) at 27.82x, dividend yield at 0.97%

4.      Dongfeng (489.HK): p/e (ttm) at 6.07x, dividend yield at 2.24%

The answer is clear that Dongfeng is my choice at this stage!

Superphang

https://superphang.blogspot.sg/

Get Nice (64.HK) Is Getting Nicer

My wife and I first bought this stock, Get Nice Holdings (64.HK), ion 5^th April 2016 and later added more on 1^st Aug 2017. Our average price was at $0.2748. This stock generally gave 2 cents dividend in a year, and the last declared dividend of 1 cent was xd just last week on 30 Aug 2017, and payable on 13 Sep 2017. We have treated our investment of this stock as our fixed deposit as we have been enjoying a solid dividend yield of 7.28% based on our purchase price. The price movements have been in the doldrums since we purchased it but we do not mind at all as long as the company maintains its low price-earnings ratio and delivers to us about 7% dividend yield a year.

It closed at 31.5 cents today, 4 Sep 2017, up 5%, with volume spike too. This was probably due to the recent rampant purchases by the Chairman and CEO of Get Nice, Mr Hung Hon Man, with the last being the purchase of 4,000,000 shares at 30.5 cents done on 28 Aug which increased his shareholding from 29.28% to 29.33%, which is very close to the 30% threshold for a general offer to be made under the Codes on Takeovers and Mergers.

The codes mandate that the interested party has to make a general offer to the rest of the shareholders with generally a higher bid vis-à-vis his last purchase price from the open market if the party's aggregate shareholdings amount to 30% or more of the voting rights of the company unless otherwise decided by the Securities & Futures Commission of Hong Kong.

Get Nice (64.HK) had some positive price movements lately. Its 72% owned subsidiary, Get Nice Finance (1469.HK) has surged in the past month much more in terms of percentage and its p/e is now 16.3x with the closing price at $1.79. The p/e of Get Nice (64.HK) is only 7.1x, still considered vastly undervalued.

Even if this does not end up a general takeover offer, I will enjoy the ride and the solid dividend yield of 6.35% at the current price, knowing that the CEO is confident of the development of the company.

Superphang
http://superphang.blogspot.sg

China Saite (HK:153) Breaking Out of Consolidation

China Saite (HK:153) closed at 59 cents today, 10 Aug 2017, breaking out of its "comfort zone" after 1.5 months of consolidation. I have invested some money in this company and I predict it will soon hit 67 cents which should be its next resistance.

(1)    About China Saite Group Company Ltd  (153:HK)

China Saite Group Company Limited ("China Saite") is an integrated steel and prefabricated construction solution provider headquartered in Yixing, Jiangsu Province, the PRC with an operation history of approximately 15 years. Their integrated construction solution services are customised to meet the technical specifications and requirements of different projects, and span from fabrication and assembly of steel structure parts and prefabricated construction materials at our workshops to the installation of these materials onsite, based on the secondary design (as to our steel structure projects) provided by them or their customers. 
China Saite is one of the 70 Grade One Steel Structure Engineering Professional Contractors in the Jiangsu Province. Grade One Steel Structure Engineering Professional Contractors is the highest national qualification in this aspect, awarded by Ministry of Housing in November 2005, which enables the Group to undertake all kinds of steel structure projects without limitation in span, contract sum, construction area or total weight of construction in the PRC. 

(2)    Solid Financials

Rolling p/e is very low at 3.944x even though the profit declined 19.4% in FY2016.

The One-Belt-One-Road initiative by the China government should benefit the company for the next few years.

(3)    Technical Analysis

The prices have consolidated well in the tight range between 56 to 58 cents in the past 1.5 months and it just broke out of that range to 59 cents and this was achieved remarkably amidst the weak sentiment of the HK broad market.   

China Saite (HK:153) daily chart

Superphang
http://superphang.blogspot.sg

AEM Stellar 2Q2017 Performance Should Continue

(1)     Estimation of the fair market value of AEM:

AEM just announced a solid 2Q2017 result and its earnings per share for 2Q2017 is 12.5 cents, 196.5 percent better than that for 1Q2017. The net profit for 1H2017 is 682.1 percent better than that for the same period in 2016. To reward its shareholders, the management is also declaring an interim dividend of 2.5 cents, payable on 20 Oct 2017.

The management has also estimated the EPS for FY2017. And if we put EPS of 1Q, 2Q and the estimated values for 3Q and 4Q together, we have

EPS 1Q2017 = 6.36 cts

EPS 2Q2017 = 12.5 cts

Estimated EPS 3Q2017 = 6.07137348 cts

Estimated EPS 4Q2017 = 6.07137348 cts

                       

Forward EPS 2017 = 31.00274696 cts

                       

Given the closing price of 286 cts on 7 Aug 17,

p/e = 9.2249890x

If p/e = 10x then p = 310.0274696 cts

p/e = 11x then p = 341.0302166 cts

p/e = 12x then p = 372.0329635 cts

So, when I said “No $3.50, no sell” before the release of the 2Q2017 result, I think I was spot-on if Mr Market is to take the p/e of the company as between 11x to 12x. However, from past experience we know that the management has been very cautious in giving forecast and I strongly believe that EPS for 2H2017 should be better than the figure forecasted by them.

(2)     Confidence displayed by both Chairman and CEO

Mr. Charles Cher, AEM’s Group CEO, commented, “With our improving financial performance, we are declaring an interim dividend of S$0.025 per share to reward our shareholders. With our half-year performance and the sales orders recorded, we expect to achieve revenue and operating profit before tax of at least S$200 million and S$24.0 million respectively for FY2017.”

Mr. Loke Wai San, the Group’s Chairman, added, “The global semiconductor outlook for 2017 and 2018 looks positive. We continue to invest in improving our technical capabilities, delivery and field service support to better serve our main customer’s longer term roadmap and global footprint requirements. At the same time, we continue to be on the lookout for possible acquisition targets that are synergistic to our business.”

I think Mr Market has been slow to recognize the intrinsic value of AEM but I have the patience to wait for him to do so.  

Superphang
http://superphang.blogspot.sg 

Time to Invest $ into HK ETFs

I bought H-Share Index ETF (HK:2828) at $94.5 on 9 Nov 2016, immediately after Donald Trump won the US Presidential Election, and my target price is when its p/e reaches about 11x which happens to be an auspicious number of $138! I will buy more of it if there is a significant pullback of its share price.

I noticed most Singapore investors do not buy stocks from the HK Stock Exchange (HKEx). But I seriously think that the time has come for us to park some money or increase our investment in some gems listed on HKEx. If you are not familiar with HK stocks or have no time to do your due diligence to sieve out the gems there, buying index ETFs can be a good option and it is good to know that you need not pay stamp fees when you purchase HK ETFs.

Why buy stocks or ETFs from HK market now? 

(1)    The inclusion of 222 large cap A-shares into MSCI Emerging Market index in next June and this will make both A-shares listed on Shanghai and Shenzhen bourses hot 6 to 9 months before that. 

(2)    As of today, A-shares listed on Shanghai and Shenzhen bourses are still on average 27 percent more expensive than H-shares listed on HK Stock Exchange. 

(3)    The recent depreciation of the US$ against RMB has made Shanghai and Shenzhen fund managers very busy in moving their funds to HK market to grab the relatively cheaper and cheaper blue chips like big banks, insurance companies and tech stocks, as HK$ has been pegged to the US$ and has been weakening in tandem with the US$. This is really no brainer to the China fund managers and the Shanghai-HK Stock Connect and Shenzhen-HK Stock Connect have provided the convenience for them in doing so.

(4)    The p/e of Hang Seng Index is at 13.1x, Singapore STI is at about 15.1x, and H-share ETF 2828 is only at about 9.1x. Value investors simply cannot ignore this undervalued ETF!

Below is my compilation of all major ETFs listed on HK Stock Exchanges:            

                                                                Price            Mkt Cap        Expense

Name of ETF                    Listed on      on 4 Aug     (b HK$)          ratio (%)

HS H ETF (2828)              12/10/2003    112.8             40.1              0.64

Tracker Fund (2800)         11/12/1999     28.25            96.3                0.1

CSOP A50 (2822)             11/8/2012      13.7               24.1              1.08

ISHARES A50 (2823)        11/18/2004    13.2               28.7              0.99

CAM CSI300 (3188)          10/26/2012    44.1              12.6               0.83

199 component stocks, out of a total of 300, of CAM CSI300 (3188) belong to the 222 selected large cap A-share which will be included into MSCI EM index. These 199 stocks jointly constitute about 80.1% of the total value of the CAM CSI300 (3188) portfolio.

I like 2828 the best for its acceptable yield (1.77%), low p/e, low expense ratio, big market cap and negative premium to A-shares. I also like 3188 for its closeness to the basket of 222 large cap A-shares which are soon to be included into MSCI EM index. 2800 is also on my radar for its large market cap and its lowest expense ratio.

I am aboard the fast-moving train and have been enjoying the ride. I believe it will accelerate before next June when the 222 large cap A-shares are included into MSCI EM index.

Superphang
http://superphang.blogspot.sg

Federal's 2Q2017 earnings are10.1 percent up

Federal just released its 2Q2017 quarterly result: As of 24 July 2017, the Group’s committed order book was S$42.0 million, including the procurement contract for the Zawtika Development Project Phase 1C.  Basic 2Q2017 EPS is 0.87 cents, an increase of 10.1% over the same quarter in 2016.

I think the recent sell-off of Federal shares was overdone and the good result should bring back the confidence of its shareholders to buy more or hold their shares while waiting for more good news to come with the many initiatives launched by its management.

           

I agree with what Executive Chairman and CEO, Mr Koh Kian Kiong, of Federal has shared on the company’s positive set of financial results and its business outlook: Even though the offshore marine and oil and gas sectors continue to face difficulties, our Group is heartened to maintain our profitability in face of such a tough operating environment. Our management will continue to employ a prudent approach in growing our order books by setting up strategic partnerships with strong partners to co-bid for more valuable projects in the region especially in Indonesia. We are very delighted to sign-up partners that have excellent track record in the business like CMIH, COOEC and PT Timas etc. Our Group is hopeful that these strategic partnerships will soon bear fruits for all parties involved and enhance shareholder value moving forward.

I know Federal will have a solid quarterly result in its 4th quarter if history is anything to go by and I believe Mr Koh will start its accumulation of Federal's shares again as the barring period for him to buy has been lifted with the release of the quarterly results. 

Superphang

http://superphang.blogspot.sg

HK:6166: Solid PEG Ratio and Rampant Insider Purchase

Chia Vast (HK:6166) is a gem listed on the HK stock exchange that I wanted to slowly accumulate and I thought I have had the time to also slowly do a good research and introduce it to my InvestingNote's followers but it has run up too fast since my first purchase at HK2.56 apiece on 12 July 2017. It has surged about 18.3% since my purchase and the closing price on 25 Jul 2017 was HK$3.03. But I will buy more if there is a pullback.

(1) About China VAST Industrial Urban Development Company Limited
It is an investment holding company principally engaged in the provision of services in the planning, development and operation of large-scale industrial towns in China. The Company operates its business through three segments. The Land Development segment is engaged in land infrastructure development. The Property Development segment is engaged in the development and sale of properties. The Property Leasing segment is engaged in the leasing of properties. Through its subsidiaries, the Company is also engaged in the provision of consulting and maintenance service.

(2) Rampant insider purchase
I just checked the HKEx and noticed that the boss has kept buying his own company shares with no sign of slowing down: 

Take a look at his rampant buying spree:
Insider              Shares      bought price/share Date
WANG Jianjun 4,000,000 HKD 2.9500            24/7/2017
WANG Jianjun 5,142,000 HKD 2.8800            21/7/2017
WANG Jianjun 5,260,000 HKD 2.8800            20/7/2017
WANG Jianjun 2,500,000 HKD 2.8800            19/7/2017
WANG Jianjun 2,127,000 HKD 2.8760            18/7/2017
WANG Jianjun 1,000,000 HKD 2.8800            17/7/2017
WANG Jianjun 425,000    HKD 2.6745            14/7/2017
WANG Jianjun 375,000    HKD 2.6437            13/7/2017
WANG Jianjun 303,000    HKD 2.5242            12/7/2017
WANG Jianjun 265,000    HKD 2.4600            11/7/2017
WANG Jianjun 48,000      HKD 2.4700           10/7/2017
WANG Jianjun 145,000    HKD 2.4830            7/7/2017
WANG Jianjun 194,000    HKD 2.4790            6/7/2017
WANG Jianjun 2,190,000 HKD 2.4540            5/7/2017

(3) Solid financials
Its financials has been solid:
Based on the closing price at HK$3.03,
Rolling p/e = 6.35x,
Dividend yield = 3.96%
PEG ratio = 0.2288 based on FY2016 growth rate. Simply solid!

China Vast's (HK:6166) market cap is now about HK$4962 m or S$864 m, big enough for easy accumulation and small enough for the price to shoot up fast once the smart money comes in. My target price for HK:6166 is HK$4.77, an upside of 57%!

Superphang
https://superphang.blogspot.sg/