Stock Investing: Is Tat Hong a fallen angel?

It has been sometimes since I reviewed the performance of Tat Hong and I was shocked to find out that the stock had plummeted to almost a five year low. The stock is currently trading at $0.52, barely above the $0.49 recorded in September 2015.

For a company that prides itself as the largest crane company in Asia Pacific and seventh worldwide, its recent stock price indicates that all is not well for Tat Hong.

In the 2015 annual report, the revenue declined 11%  to S$608.6 million whilst operating profit (excluding impairment charges) remained flat at S$35.7 million comparable to the net profit achieved in FY2014. Profit after tax and minority interests (PATMI) dipped 85% to S$4.9 million due to non-cash goodwill and asset impairment charges of S$30.8 million taken by the Group’s Australian subsidiaries. One reason for Tat Hong’s terrible performance could be that its business is too concentrated in Australia and Singapore markets, which together accounted for 60% of the Group’s business. Thus, any headwind in these markets can spell big trouble for the company.

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Perhaps another tell-tale signs that a company is not doing well is that it is selling its assets. In 2015, Tat Hong disposed its properties in Australia, equipment as well as selling off several “non-core subsidiaries”, Hup Hin Transport and Tat Hong Flo-Line, and an associate, Kian Ho Bearings. In total, the Group realised proceeds of S$89.1 million from its divestment programme. Whilst this streamlining initiative can help to unlock value for Tat Hong, it also underlies the notion that the company is downsizing its moat. After all, these assets were acquired in the good old days when Tat Hong was growing. Now that the company is experiencing rough patch, it would seem strange that these acquisitions became …

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The mystery of life

It’s that time of the year for self reflections again. Since 2013, year end reflections took on a whole new dimension for me with the passing on of Dad. It is strange that when he was alive, I never realized my love for him and that he was so important to me.

Dad had been an influential figure in my life and his abrupt death in early 2013 had a profound impact on me. Perhaps the mystery of life is that you would only cherish something after you lost it. Human beings tend to take things for granted, especially when it comes to interpersonal relationships.

On looking back, one of Dad’s important words of advice to me was to manage and improve my temper. When I was young, I didn’t enjoy a good relationship with my mother and often argued with her over trivial matters. Because of this, Dad always chastened me over my foul temper. Indeed, since young, emotion management had always been a challenge for me. Sometimes when I see red, I would lose my head, much to my regrets later. Apparently, this Achilles Heel has spilled over to my job and thus affected my progression.

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This year, I achieved quite a lot in my job and had collected a few awards along the way. But I felt that all the good works would go down the drain and nullified by my head-on clashes with several colleagues from other departments. I was involved in several unpleasant arguments due to pressing deadlines and these incidents caught the attention of my big bosses. On several times, my big boss had to do damage control for me and behind closed door, he expressed concern on my emotion management. He urged me to improve my emotions before it spirals out of control. …

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BullionStar: Improvements to the Vault Grams® Program

Below is an announcement from BullionStar concerning its Vault Grams ® Program. Over the years, BullionStar has introduced a slew of innovative products. The re-branding of Vault Grams ® Program to Bullion Savings Program (BSP) will offer wealth builders the flexibility to convert BSP Grams to physical bullion bars. The introduction of the 2-factor authentication will also help to strengthen the security of BullionStar customer’s online account.

Effective 1 December 2015, we will be making several improvements to the Vault Grams® Program which will be re-branded to the “Bullion Savings Program (BSP)” to better capture its new characteristics. Buying and selling BSP Grams will work in the same way as for Vault Grams.

With the Bullion Savings Program, BullionStar will introduce the possibility to convert/withdraw BSP Grams (formerly Vault Grams) to physical bullion bars. You will be able to convert BSP Grams in Gold in increments of 100 gram to 100 gram PAMP Cast Gold Bars. BSP Grams in Silver will be convertible in increments of 15,000 gram to 15 kg Heraeus Silver Bars. BSP Grams in Platinum will be convertible in increments of 1,000 gram to 1 kg Heraeus Platinum Bars.

With the conversion/withdrawal possibility, it will thus be possible to use the Bullion Savings Program, not only for trading purposes, but also for saving towards physical bullion bars.

BullionStar holds and will continue to hold more than enough physical precious metals in stock to ensure that all BSP Grams are fully allocated at all times. Starting 1 December, we will also publish a daily report on the amount of stock inventory we hold to back the Bullion Savings Program. The report will be published under My Vault Storage on BullionStar’s website.

Customer holdings of Vault Grams will automatically be transferred to

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Shortchanging your health insurance may cost your life in Singapore

Two weeks ago, I upgraded my whole family’s health insurances to Integrated Shield Plan (Private Hospital)  to provide maximum coverage for medical expenses. As I also opted for the rider to cover the deductible and co-insurance portions, the amount of cash forked out was about $1,100 per annum after Medisave deduction.

The decision to upgrade our health insurances came about after a health scare that occurred to my colleague and my brother’s daughter who suffered a broken leg a couple of months ago. These incidents certainly really drove home the importance of buying health insurances when in the pink of health. With the kick-in of Medishield Life with effect 1 November 2015, you are still eligible for Medishield Life even if you have pre-existing illnesses or health problems at the point of applying for Medishield Life. However, do note that if your pre-existing conditions are very serious, you may need to pay additional premiums.

Personally, I am glad that the government has finally decided to provide coverage to Singaporeans born with pre-existing illnesses. This is the right thing to do, especially for new-born babies born with defects or chronic health problems. The Medishield Life will also offer protection for life to Singaporeans and Permanent Residents, so we need not worry about not having medical expenses coverage when we are old. The only shortcoming of this policy is that it also extends coverage to those who previously refused to join the Medishield scheme and then suffer from serious illnesses. The rest of Singaporeans have to pay higher premiums because of this group of “Medishield defaulters”.

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When we are young and healthy, we tend to take things for granted and assume that we would live forever. But do you know that Singapore hospitals have been facing severe bed crunch for a …

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The strong demand for gold

As the year end festive season approaches, gold demand from China and India consumers pick up as expected. This is because the Chinese and Indian consumers are traditionally known to buying gold jewelleries and bullion during festive seasons. In the latest report from World Gold  Council, the Indian demand was up by 15% to 211 tonnes, while China’s demand increased by 4% to 188 tonnes in Q3 2015. The bullish outlook for gold underlies the strength of the demand of gold bars and coins.

To be a successful wealth builder, one must always adopt a contrarian approach and buy on price dips. This is applicable regardless of any form of financial instruments. For gold and silver bullion, this is no different. In Q3 2015, the outflow of ETF led to a price dip for gold, thus resulting in increased consumer demand. This is because global investors saw the gap and capitalized on buying opportunity. The investment demand saw a spike in this quarter, up 27% to 230 tonnes. In particular, the Western market saw a surge of estimated 33%. The increased in demand was probably triggered by the Greek debt crisis and uncertainties in Europe arising from the standoff between Ukraine and Russia.

Another interesting trend of bullion is that central banks are a major source of demand. They were net buyers for 19th consecutive quarter and institutional buying reached record levels in Q3 2015. This is because the world has recognized the need to diversify national reserves and gold is always seen as the best asset to hold. According to data from World Gold Council, demand from central banks surged from 79 tonnes in 2010 to 590 tonnes in 2015, underpinning the huge demand support for gold.

For the man in the street, it is better to buy physical …

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Japan

During my recent business trip in Japan, my colleague and I visited a district in central Japan called Akihabara, which is famous for its wide variety of electronic shops. However, what got me so intrigued was that there is a complex called Mandarake that sells anime and manga collectibles. And lo behold, one of the store at level 7 sells retro card games like Dragon Ball prism cards!

I have been a collector of Dragon Ball prism cards for more than 20 years and I could not believe that I could get my hand on the prism shining cards again. There used to be a Dragon Ball craze back in the eighties and nineties when the comic series were launched. In Singapore, those in the 30s may remember that dragonball cards used to be sold in packets and those “rare” cards are those shining cards. Later on, the cards were sold in vending machine that require you to put on 20cents and turn a knob to displace out a card. The cards were sold by Japanese Bandai for only a short while and now there is no more vendor selling the old series of dragonball cards.

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As you can see from the picture, the cards are pretty expensive in Japan. I only bought three cards and they costed me S$75! However, the conditions of the cards are extremely good, so I feel that they are worth the money. I intend to buy more when I visit Japan for business purposes again next month.

For me, collecting Dragon Ball prism cards is not merely just a form of personal hobby, it is also about revisiting my childhood memories. Dragon Ball has been part of my formative childhood and the story and character had inspired me to persevere in the face of …

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Japan business trip

I just came back from a Japan business trip and thought that it is timely to blog down some of my thoughts arising from the experience. This is the 6th time that I visited Japan and previously they were all business trips that lasted only a week. What made this trip quite memorable was that I had the chance to visit several interesting places at Tokyo with my colleague.

The first place that we visited in Japan was Daibai to see the giant Gundam robot at Gundam Front Tokyo. I am not a big fan of Gundam but nevertheless was infected by my colleague’s enthusiasm. The place is really unique as there is a Gundam museum with hundreds of Gundam robot figurines and a movie theatre playing Gundam shows.

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Beyond the fanfare of Japanese anime and manga culture, I think it is important to recognize the Japanese’s culture of innovation. After all, the Japanese have created so many timeless icons such as Godzilla, Doraemon, Gundam and Dragonball. To develop such a culture is not easy and requires a nation to constantly dream big and think out of the box. In this respect, Japan is way ahead of Singapore.

Just think about it, what icons have Singapore generated over the decades that managed to capture the imagination of the world? None I would say.

We often pride ourselves as being an efficient society but actually that is a nice way of saying that we are merely good at conforming to an established system. Most Singaporeans, including me, are unable to innovate new ideas and come out with creative products because most of us are brought up in a rigid ranking education system whereby creative alternative solutions are not accepted.

I still remember that I have to memorize Chinese stories and history …

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Sleep-walking to investment losses

Recently, one of my friends had a massive paper loss made on one of the local stocks. Apparently, the stock had risen substantially within the past one year but he got greedy and decided to hold on to it. Eventually, the stock had its run and plummeted to a new low. Unable to cash out, my friend has become a “long term investor”. I have seen far too many investors making the classic mistake of not setting a stop-loss or gain level. As a result, they always sell off a winning stock too early or hold on to a losing stock for far too long. To mitigate this, investors should always monitor their stock investment. Below is a press-release from Call Levels, a free alert system meant for financial tracking.

Call Levels, a real-time financial monitoring and alert service designed to help traders monitor financial assets price movements easily on mobile, today announced that it has closed its pre-series A led by 500 Startups. The fintech startup also raised capital from a consortium of angel investors who are veterans in financial markets and tech industry, such as Timothy Teo (ex-GIC and JP Morgan), Gracelyn Ho (ex-Morgan Stanley) and Koh Boon Hwee. The combined investment from all the investors amount is about USD500K.

Call Levels recorded strong traction and usage especially in light of current volatile markets. Almost 10,000 Call Levels were created over the past 30 days with day-on-day growth of 21% and week-on-week growth of 35%. By focusing on its core feature – reliable, real-time price alerts, Call Levels have garnered the support of professional traders, as they rely on the app to constantly monitor the prices and gain an edge in the financial markets.

“I tested Call Levels against my Bloomberg Professional and found that it was much …

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Stock Investing: Ascott REIT’s 3Q 2015 Report

Below is a press release from The Ascott Limited, a wholly owned serviced residence unit of CapitaLand, one of the companies which I deeply admire. Ascott has been expanding aggressively lately in the South-east Asia region on the back of the soon-to-be-established ASEAN Economic Community.

Ascott Residence Trust’s (Ascott Reit) revenue for 3Q 2015 rose 21% over 3Q 2014 to reach S$113.2 million. This came on the back of its acquisitions in 2014 and 2015, as well as stronger operating performance from existing properties. Revenue per available unit (RevPAU) for 3Q 2015 grew 10% to S$141 compared to the same period in 2014. Gross profit increased 13% to S$55.2 million.

Ascott Reit’s 3Q 2015 Unitholders’ distribution of S$32.0 million included a one-off item of approximately S$1.2 million relating to the interest cost incurred on the S$250 million perpetual securities issued in June 2015 for the period prior to utilisation of the proceeds in 3Q 2015 to partially fund Ascott Reit’s acquisitions in Australia and the United States of America. Distribution per unit (DPU) for 3Q 2015 is 2.07 cents. Excluding the one-off item, the adjusted DPU would be 2.15 cents, which is 2% higher than 3Q 2014 DPU of 2.11 cents.

Mr Lim Jit Poh, Ascott Residence Trust Management Limited’s (ARTML) Chairman, said: “We continue to enhance Ascott Reit’s portfolio and optimise Unitholders’ returns through accretive acquisitions as well as active asset and capital management. In 3Q 2015, we completed half a billion dollars worth of acquisitions. We acquired six properties in Australia, Japan and the United States of America, and the remaining stakes in two properties in Japan. With Ascott Reit’s entry into the United States of America, we are seeing maiden contribution from our property in Times Square of New York in this quarter. Recently, we also divested …

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