The Hour Glass -- Rampant Buybacks

Solid N-shaped chart. Solid management. Steady business even during the Covid-19 pandemic. Company seldom initiates buybacks for many years and now they started it, and they did it rampantly. As I wrote, the last buyback was done on 25 Jun 2021, with a total outlay of $735,771.87 and an average price of $1.49164 apiece from the open market. 

The last that they gave a 3-for-1 bonus issue was many many years back. 

Hour Glass has actually a strong economy moat in that the supply of Swiss luxury watches is tightly controlled. Its long-standing relationships with brands such as Rolex and Patek Phillipe are giving it the edge in the markets they participate in.

Those who want to buy these branded first-hand watches in the markets they operate in have little choice but to come to its physical shops.

Its share price peaked at $0.88 in 2015 and there has not been much movement since. It has been a very disappointing investing journey for those shareholders like me who have held onto it for years even though its fundamentals have improved a lot since 2015. For their business to remain solid during the pandemic, one simple logic that I can think of is that with less travelling, consumers will use their extra savings to buy luxury watches for themselves or their loved ones. 

However, I think the Hour Glass’ management must have also felt that they have to do something to make Mr Market reflect the price fairly and they started their rampant company buybacks this year.  This is definitely a positive development for all its shareholders as share buybacks will reduce the outstanding share count and shareholders will get to enjoy a larger percentage of shareholding in the company with the reduced total outstanding shares when the treasury shares are scrapped. The effect is even larger especially if the buybacks are made at grossly depressed levels.

Even if there is no bonus issue this time, Hour Glass will be able to pay higher dividend per share going forward since the number of total outstanding shares has been reduced.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” --- Benjamin Graham.

It is worth the wait as my weighing machine now says it should be worth $1.70 apiece within 3 months based on my N-shaped chart estimation. It will be more than a 2-bagger for those shares that I bought after the previous 3-for-1 bonus issue and more than a 6-bagger for those shares that I bought before the bonus issue.

Superphang
http://superphang.blogspot.sg

$TRULY INT'L(732.HK)

$TRULY INT'L(732.HK)

I bought this stock on 10 Mar 2021 at $1.37 apiece for its solid earnings in the first three quarters of FY2020 and before the earnings announcement for the whole FY2020 at end March. 

The revenue increased 0.7% in the first 3 quarters in 2020, and the profit was up 140% yoy. Trailing p/e was at a low 6.1x and p/b was at 0.537x then. Positive operating cash flow in 1H2020 and there was an insider purchase in early January too. I was anticipating good dividend yield and good earnings coming from the final earnings announcement. 

The company is principally engaged in the business of manufacture and sale of LCD products including touch panel products and electronic consumer products including compact camera modules, fingerprint identification modules, personal health care products and electrical devices.

It did not happen. Company did not give any dividend even though the earnings to me was solid. FY2020 earnings was down 11% year on year due to some provision and tax issues. When the company announced that its 1Q2021 earnings increased by 176% yoy, the bullishness of the share price movement and attention on this stock was back again. My target price of $2.10 given in InvestingNote was based on a forward p/e of 10x with an estimation of a growth of 20% EPS for the next 3 quarters. This 53.28% expected ROI within 3 months seems daunting but even that, the p/b will still be very low at 0.52x and hence my confidence.

As I wrote this, the price was at $1.97, up 9.44% over the previous closing price. It should meet my target faster than I first estimated.  

Superphang
http://superphang.blogspot.sg

APAC Realty --- Still lagging behind PropNex

 I bought APAC Realty on 26 Oct 2020 at 37 cts. It closed on last Friday, 28 May 2021, at 64.5 cts. My ROI on paper is about 73.6%. 

Sell or don't sell? I will keep it! Why?

My simple calculation is that it should be worth 83.7 cents based on equivalent forward p/e of PropNex derived from the latter's closing price of $1.59. The forward p/e of PropNex is about 9.913x now. 

This will mean APAC Realty will still have an upside of 29.76% to catch up with PropNex even if the price of PropNex remains stagnant at $1.59. I believe PropNex still has room to move up given the increase in property sales and rental transactions. 

Anyway, 73.6% is definitely not a bad on-paper ROI within 7 months or so. 

Superphang
http://superphang.blogspot.sg

Excelpoint: A potential multibagger

 $Excelpoint(BDF.SI)

Voila! This will be another multibagger after Sinostar Pec.

Q1 EPS = 3.66 US cents, compared with 0.19 cents the year before. This is a solid growth of 1826% yoy!

3.66 US cts = 3.66*1.3250 or 4.8495 S’pore cts.

If the price can be 12x the annualised EPS, price of Excelpoint should be 4.8495*4*12 = 232.776 S’pore cents or S$2.32776. 

Another plus point is that the company has been willing to give solid dividend to share the fruits with its shareholders. Also, the company is confident of growing the business sustainably.

Target price is $2.33 within one year.

Superphang
http://superphang.blogspot.sg

Sinostar Pec - A potential multibagger

Sinostar Pec: Solid Q1 earnings. Solid EPS growth. It will be a multibagger if the growth can be sustained. With the new plant for producing PP in operation at the right time and with PP in great demand, it seems that this solid growth is sustainable.

Only concern is that the boss Li Xiangping has to give solid dividend in second quarter to make value investors more willing to invest their money in the company for the long haul and he has to resume his buying spree like what he did in 2019.

My average price is $0.218. Target price is $1.25 within a year.

Superphang

http://superphang.blogspot.sg

Hongkong Land

 I sold all my Hongkong Land at an average price of USD5.1783, making an ROI of 32%. I bought it in early September last year at USD3.90.

I remember I had the following reasons when I bought it then:
The property in Hong Kong had suffered from triple whammies the year before:
1. Rioting in Hong Kong almost throughout the most part of the year;
2. The Coivid-19 pandemic;
3. Close to zero tourist arrival rates and thus higher jobless rates. 

And I knew that Mr Market is forward-looking. Shrewd investors would think that all the woes will be over soon. Technically, the BIG CUP & HANDLE formed should enable the price to propel past US$5.10. 

It took about 6 months for this mission. My patience paid off handsomely. 

Got to move on to other gems. Likely to be a HK stock. 

Superphang
http://superphang.blogspot.sg

CGS (6881.HK)

I have sold $SINOTRANS(598.HK) and made a ROI of about 66.8% within about 6 months. Solid! 

I have also sold $CMS(867.HK) and made a solid ROI of about 58.4% within about 3 months. Not bad!

I worked hard to find CGS, the new gem, to invest some of the above sales proceeds.

CGS (6881) is the smallest of the eight China brokerages that has A+H market cap which exceeds S$20 billion but it has the best financials.

CGS is expected to make EPS of RMB0.71 for FY2020, an increase of 37% yoy. This will give it a very attractive p/e of 5.7x at the current price of HK$4.83.

The China stock market will be getting hotter with its GDP forecast to hit 7% this year and CGS is expected to make more commissions through the hot market in FY2021.

Target price is HK$8.20 which will enable it to reach its average historical p/e.

Superphang
https://superphang.blogspot.sg