Watch out top management qualifications before investing.

George Quek Meng Tong, Chairman, BreadTalk

George holds a Doctorate in Business Administration (Honorary) from Wisconsin International University, USA.

Lam Ah Seng @ Lam Pang Chuang, MD, Ban Joo & Company Limited

Mr. Lam holds a Diploma in Business Administration from the Singapore Institute of Management. He was also awarded with a Honorary Doctorate of Philosophy in Business Administration from Kennedy-Western University, USA.


Dr P J John Johney, President, Crossways Life Centre
Bethany International Univeristy, Kennedy Western University, Vision International University, MA, Ph D Edu, Ph D Intl Rela, D D , Education, International Relations, Behavioural Psychology, Intercultural Education


Kathy Chan Lay May, Viking Offshore and Marine (O&M), Director Corporate Planning
She obtained her Bachelor of Business from Curtin University of Western Australia and Master of Business Administration from American University of Hawaii.


Liew Ham Chow, Jackson, Jackspeed Singapore Pte Ltd, Executive Director
Mr Liew has an honorary Bachelor of Science (Business Administration) from Kennedy-Western University, Cheyenne, Wyoming, USA.


Wee Chuan Peng Dennis, Founder, Dennis Wee Group
In 1999 he was conferred Honorary Doctorate in Business Administration by Kennedy-Western University, USA. 


Dora Hoan, Group CEO and Managing Director, Best World International Ltd
Dr. Hoan holds a PhD in Business Administration from the Western Pacific University USA (2002). She was awarded a PhD Honoris Causa from Kennedy Western University USA (2000).


Doreen Tan, Chairman, Best World International Ltd
She holds a degree in Applied Nutrition from the American Academy of Nutrition and has an Honorary Ph.D from the Kennedy Western University, USA


Jayne Kwek, Chief Executive Officer, Moove Media Pte Ltd
She was conferred the Degree of Associate in Science (Fashion Merchandising) by Daytona Beach Community College, Florida, USA and Honorary Doctor of Philosophy (Business Administration) by Kennedy–Western University, Cheyenne, USA.

China Gaoxian's KDR PE rectified.

The Business Times reported today (29.01.2011) that China Gaoxian released inaccurate information to Korean retail investors.

They stated that their trailing twelve months PE was 86.

This was corrected to a PE of 4.3 on friday 28/1/11 causing a sudden rally in CGX's share price.

Article (29/1/11):

By Lynette Khoo
Singapore

China Gaoxian's KDR PE rectified - Its S'pore-listed shares rebound 4.7% after error on Korea Exchange website is corrected

China Gaoxian shares in Singapore rebounded yesterday as its Korean Depository Receipts (KDRs) sprang back with a vengeance after an erroneous price-earnings (PE) ratio on the Korea Exchange (KRX) website was corrected.

The KRX website had earlier stated that the KDRs were trading at a PE ratio of 86 times, a shocking number that China Gaoxian's group chief finance officer Raymond Wong said was a miscalculation by KRX. The website yesterday showed the KDRs trading at a more palatable PE of 4.33 times.

China Gaoxian shares in Singapore shot up 4.7 per cent to $0.335 yesterday, while the KDRs zoomed up 5.8 per cent to 5450 Korean won or $0.313 per underlying share since one KDR represents 20 shares.

China Gaoxian's historical PE in Singapoe is 5.86 times. Investors had earlier chased up the stock in anticipation of the KDR listing to an all-time high of 45 cents on Jan 10 but much of these gains has been erased after the counter's sharp fall on Tuesday following the dismal KDR debut.

"The Singapore shares were obviously affected by the Korean market because the shares are fully fungible," Mr Wong said.

He noted that investors in Korea also do not understand the business of the company well enough.

The group will undertake more investor relations (IR) activities in Korea and will soon appoint an IR firm there. Daewoo Securities Corp, the underwriter of China Gaoxian's KDR listing, will also be conducting more roadshows there, Mr Wong said.

"We will treat the Korean market the same as the Singapore market, giving the Korean market equal importance," he added. "Over time, we hope investors will better understand our company."

Reiterating why it chose the Korean market for the dual-listing, Mr Wong said the textile industry is a well-received segment in the Korean market, with textile companies enjoying a good average PE of 18.54 times, a number the group is confident of attaining.

Stock Portfolio as at 30.01.2011.

My stock portfolio holding as at 30.01.2011:

5 lots Best World @ 0.291 - speculative pick (for short period holding)
5 lots China Gaoxian @ 0.341 - speculative pick (for short period holding)
5 lots First Reit @ 0.766 - income generator (for long-term holding)
5 lots HockLianSeng @ 0.316 - value pick (for long-term holding)

Bought HockLianSeng @ 0.315

I bought 5,000 share of Hock Lian Seng @ 0.315 cents per share.

Hock Lian Seng Holdings Limited operates as a civil engineering construction company in Singapore. The company operates in two segments, Civil Engineering and Building Materials. The Civil Engineering segment engages in civil engineering works for bridges, expressways, tunnels, mass rapid transit, port facilities, water and sewage facilities, and other infrastructure works. Its customers include government and government-related bodies. The Building Materials segment procures and sells building materials comprising concreting sand and aggregates for building and construction purposes. The company also involves in the rental of property; and leasing of machinery for construction and engineering companies, which consist of excavators, cranes, vibratory rollers, concrete pumps, and bulldozers, as well as slip form pavers, wall saws, and wire saws. Hock Lian Seng Holdings Limited was founded in 1969 and is based in Singapore.

Main reason to bullish on this counter was due to:

1. Total Cash Per Share about 0.30, in other words I only paid 5% premium over it's net cash value.

2. 52 week lowest trading price was 0.26 on 15.07 only 17.5% lower than current share price.

3. Net profit margin 11.81% and ROE 25.06% (2010 3Q data).

4. Current stock price was above 20 & 50 days MA, and 20 days MA was above 50 days MA with increased trading volume.

Also quoted comments from Chinese website forum on 02.12.2010 for reference.
 

1，主营地铁等大型建筑项目，政府计划在若干年地铁扩展一倍，目前新加坡只有三家公司可以做这种大型项目 2. 目前手头项目还可以做1.82年（根据去年的Revenue计算） 3. 上市以来还没有算冲过，价值投资者的安全地带, Forward PE 5.3 4. 营收5年内稳定大幅度增长 5. 净利5年内稳定大幅度增长 6. 毛利率最近三年稳定增长：　11.6% -> 12.4% -> 13.3% (没有以前的数据，故取三年) 7. 营运利率最近三年稳定增长：　8.9% -> 9.7% -> 11.0% 8. 净利率最近三年稳定增长： 8.0% -> 9.5% -> 11.8% 9. 营运现金三年内稳定增长，手头现金及等价物5年稳定增长 10. 手头净现金每股0.30，股价才0.29 12. 收益率（分红）达5.2% 13. Current Ratio 3年逐年增加 14. Gear Ratio 3年逐年下降

In conclusion, I am willing to hold this counter for long period in view of it's strong fundamentals and my exit point for this counter will be 0.25 (abt 18.5% lost).

Bought China Gaoxian @ 0.34

I bought 5,000 share of China Gaoxian @ 0.34 cents per share.

China Gaoxian Fibre Fabric Holdings Ltd., an investment holding company, engages in the production and sale of yarn and fabric products in the People's Republic of China. The company's products include fully drawn yarn, drawn textured yarn, blended yarn, triangular-fibre Yarn, and warp knit fabric. Its products are sold to textile and garment manufacturers under the HuaGang and DaHuaWei brand names for the manufacture of apparels, upholstery for automobiles and aeroplanes, sports shoes and headgear, curtains, bedding, bags, and umbrellas. The company was incorporated in 2008 and is headquartered in Huzhou, the People's Republic of China.

Some key data related this counter:

1. Book Value per share 1.1325RMB (abt: 0.222SGD) & total cash per share 0.412RMB (abt 0.081SGD);


2. 52 week trading range was 0.15 - 0.47.
    Hit historical high on 4th Jan @ 0.47

3. Average Net Profit Margin from 2006 to 2009 about 27%.
    2010 3 Q: 21.79%

4. ROE from 2006 to 2009: 34.12%, 36.29%, 55.59%, 43.54.
    Most recent ROE 29.44% from Yahoo fiance

5. Current ratio increased from 2006 1.09 to 2009 3.77.
    Most recent data from Businessweek: 4.9

6. Debt to Equity ratio increased from 2006 1.22 to 2009 4.00.
    Most recent data from Businessweek: 4.6.

My main trigger point to take a bet on this counter was due to its shares price dropped from 0.44 to 0.34 on 1st day (25th Jan) of dual listing its Korean depository receipt. Overall this counter's fundamental (profitability, ROE, P/E ratio, and financial health) are still looks all right.

My exit point for this counter will be 0.25 (abt 26% lost) and I am willing to hold this counter until the company release its full 2010 financial result enable me to make further decision.

My 2010 unit trust investment total return!

Chinese New Year coming soon, I did a final calculation for my unit trust investment portfolio performance which was about 12.13% annualized return for 2010 compared with STI 10.10% & MSCI Asia ex-Japan 6.90%.

Actual I could boost my total return even better if I was patient enough and held two of my unit trusts untill the end of the year.

First State Glb Resources bought 939.82 units on 24.05 @ 1.2137, sold on 03.06 @ 1.3005.
Profit $78.20 within 10 days (about 6.8% return).
31.12 closing price: 1.70500, additional $380.16 or 33.06% profit.

Lion Global Thailand bought 471.92 units on 24.05 @ 2.10100, sold on 05.07 @ 2.244.
Profit $58.99 within 41 days (about 5.9% return).
30.12 closing price: 2.84600, additional $284.10 or 28.41% profit.

Market	Index	Total Return
Thailand	SET	43.10%
Indonesia	JCI	40.80%
Malaysia	KLCI	22.30%
Korea	KOSPI	15.30%
My Potofolio	David's Investment	12.13%
Russia	RTSI$	12.10%
India	BSE SENSEX	11.70%
Singapore	FTSE STI	10.10%
Taiwan	TWSE	9.80%
Tech	Nasdaq 100	8.90%
Asia ex-Japan	MSCI Asia ex-Japan	6.90%
Emerging Markets	MSCI Emerging Markets	6.30%
US	S&P 500	3.00%
Australia	S&P / ASX 200	1.40%
World	MSCI World	0.90%
Japan	Nikkei 225	0.60%
Brazil	Bovespa	-2.80%
Hong Kong	HSI	-4.00%
China	HSMCLI	-6.90%
Europe	Stoxx 600	-7.40%

First RIET FY2010 financial result released

On 21st Jan 2011 First RIET has released its full 2010 financial results.The key financial highlights are Gross Revenue Increased by 4.4% and Net Property Income increased 4.2%, and Asset Under Management increased 72.4%.

Now I would like to base on the latest financial data to work out my 6 selection criteria listed in my previous post:

Criteria #1: REIT Price Undervalued (current price < NAV)  
Purchase price 0.76 < NAV 0.765 - passed
Criteria #2: High Dividend Yield (> 6%)
Base on 19th Jan closing price of 0.765 the current yield is 8.37% - passed

Criteria #3:  Low Gearing Ratio (< 33%)
17.25% base on projection year 2011 - passed

Criteria #4: High Interest Coverage Ratio (> 5)
11.6 times - passed

Criteria #5: High NPI Yield (NPI / Gross Revenue >95%)
2009: 29,850 / 30,162 = 98.97%
2010: 31095 / 31,494 = 97.73 - passed

Criteria #6: History of Consistent Growth in Free Cash Flow & DPU
Since this REIT was listed on SGX on Dec 11, 2006  below are the key DPU & cash flow data (from 2007 to 2010).

            DPU($0.01)  CF from operations ($1,000)   Cash & Cash Equivalents ($1,000)
2007      6.73                           29,701                                     13,606         
2008      7.62                           20,644                                     12,417         
2009      7.62                           22,657                                      7,497
2010      6.63                           27,554                                     27,593

For this criteria I would like to give half pass since there are no consistent growth trend base on past 4 years data.

My selection of SGX listed REITs - part 2

Today I bought 5,000 share of First REITs @ $0.765  per share. (as per recent OCBC research report the target price is $0.84).

I set my  exit point @ $0.65 (about 15% lost) and I am intent to hold this counter for long term in view of it's attractive distribution yield (about 8.4% per annum) and the good quality of assets.

I will do a detail analysis on this REITs after Friday, 21 January 2011, which is the date announced by the group to release of full year 2010 financial results.

My selection of SGX listed REITs - part 1

REIT	Period	DPU cts	Mkt	Yield	NAV	Gearing	Assets Type
AIMSAMPIReit	Q1 – Proforma Rights	0.52	$0.220	9.455%	$0.26	34.80%	Industrial
First REIT	FY11 – Rights	6.4	$0.750	8.533%	$0.76	17.25%	Hospitals + Hotel (Indonesia)
Cambridge	Q3 – Sep10	1.187	$0.535	8.802%	$0.58	39.20%	Industrial
Sabana REIT	FY11 – IPO	8.63	$0.980	8.806%	$0.99	26.50%	Industrial
LippoMapleT	Q3 – Sep10	1.09	$0.575	7.583%	$0.79	10.80%	Malls (Indonesia)
CACHE	Q3 – Sep10	1.94	$0.960	8.021%	$0.88	23.40%	Industrial
FraserComm	2H – Sep10	0.5549	$0.165	6.726%	$0.26	39.60%	Malls + Office (S’pore and Aust)
CapitaRChina	Q3 – Sep10	2.08	$1.240	6.653%	$1.06	33.70%	Malls (China)
SuntecReit	Q3 – Sep10	2.502	$1.530	6.488%	$1.80	32.90%	Malls + Office
MapletreeInd	FY11 (Mar)	3.1	$1.070	6.568%	$0.86	38.50%	Industrial
MapletreeLog	Q3 – Sep10	1.54	$0.955	6.450%	$0.86	39.90%	Industrial
Ascendasreit	Q2 – Sep10	3.3	$2.160	6.111%	$1.57	34.30%	Industrial
Starhill Gbl	Q3 – Sep10	1	$0.630	6.302%	$0.89	31.00%	Malls + Office
SaizenREIT	Q4 – Jun10	0.26	$0.165	6.303%	$0.40	36.90%	Residential (Japan)
AscottREIT	Q3 – Sep10	1.85	$1.240	5.968%	$1.22	32.20%	Serviced Apts (Regional)
FrasersCT	Q4 – Sep10	2.16	$1.530	5.647%	$1.29	30.30%	Malls
Fortune Reit HK$	Q3 – Sep10	5.76	$3.970	5.804%	$5.67	0.00%	Malls (HK)
PLife REIT	Q3 – Sep10	2.25	$1.700	5.294%	$1.36	35.00%	Hospitals
CapitaComm	Q3 – Sep10	1.99	$1.520	5.197%	$1.40	31.50%	Office
CDL Htrust	Q3 – Sep10	2.54	$2.050	4.917%	$1.46	21.10%	Hotels
CapitaMall	Q3 – Sep10	2.36	$1.990	4.704%	$1.50	37.20%	Malls + Office
K-REIT	Q3 – Sep10	1.69	$1.430	4.685%	$1.45	15.10%	Office

The 6 criteria when picking the right REITs.

There are various types of REITs operating in various sectors. REITs are also priced differently by the market due to quality of management or the REITs perceived growth potential and perceived risks, among others. So, how do you select a good one. I would like to list down my 6 criterias here.

Criteria #1: REIT Price Undervalued (current price < NAV)  
Always buy a REIT only if its current price is below its Net Asset Value (NAV)Net Asset Value (NAV). NAV = Total Assets – Total Liabilities.

Criteria #2: High Dividend Yield (> 6%)
Dividend Yield = Annual DPU/ Current Price x 100%.
The main reason for buying REITs is for their high dividend payouts. So, the first screen is to select REITs with the highest dividend yields. Dividend Yield should be more than 6%.

Criteria #3:  Low Gearing Ratio (< 30%)
Gearing Ratio tells you how much money the REIT has borrowed, relative to the value of the property. The higher the debt (gearing ratio), the more risky the investment is. So, check the Gearing Ratio of the REIT. and ensure the Gearing ratio < 30% before investing.

Criteria #4: High Interest Coverage Ratio (> 5)
The NPI divided by interest expense is the interest coverage ratio. Banks and rating agencies consider anything above 5x to be safe.

Criteria #5: High NPI Yield (NPI / Revenue > 95%)
Net property income (NPI) is similar to gross profits of a company. This is the amount of profit it makes from its rental operations after deducting property expenses like maintenance expenses, property tax and insurance expenses. NPI divided by the revenue gives the NPI yield. This ratio can be compared across different REITs as a measure of operating efficiency.

Criteria #6: History of Consistent Growth in Free Cash Flow & DPU
Select REITs that have a track record of achieving consistent growth in Free Cash Flow and DPU for the last 5-10 years.

My 2011 Goal!

Success is no accident!

Today I watched Adam Khoo's 4 part of The "Ultimate Success Formula" videos from his blog.

I have learnt that the 3 steps to get success:

Step 1: Set goals
Step 2: Find strategy to achieve your goal
Step 3: Take action, if fails change the strategy until you success

At the beginning of year 2011, I would like to take this opportunity to write down my goals for this year and I will review all these goals at the end of the year:

1. To quit my current job and switch into financial industry or start-up my own business.
2. To build a multiple investment portfolios which inclusive of Unit Trust, Singapore Stocks, and US Stocks.
3. To pass CFP module 4 & 5 exam.
4. To Pass CMFAS M1A & M5 exam.
5. To take up an entrepreneurship / business start-up course.
6. To reduce my body weight to below 70kgs.
7. To increase my accumulated net personal wealth by 50%.
8. To read more than 100 books within a year.
9. To talk to more than 1,000 peoples within a year (not inclusive my direct family members, close friends, colleagues, and normal daily social activities related personnal).
10. To get married (after August).