Singapore Airlines CEO won the battle but lost the war

It is akin to winning the battle but losing the war. Current chief executive of Singapore Airlines, Goh Choon Phong, got the top job after upstaging his former boss, Bey Soo Khiang in a four-horse race back in 2011. Bey was the former Chief of Defence Force of Singapore and having lost to his subordinate, resigned promptly from the national carrier.

Goh Choon Phong is the The Chosen One, thats for sure. But whether he is The Special One to take Singapore Airlines to another level is another question altogether. Make no mistake, this is Singapore Airlines we are talking about, the pride of our nation. For someone to lead the company, he must be distinctly special to take on the monstrous task of handling the world top airline. Ideally, he must be someone who possesses that magic to lead and return Singapore Airlines to former glory.

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That “uh-oh” feeling of Midas Holdings

Since losing $8,000 on China Enersave in 2008, I swore never to touch any S-Chips again in my life. Like many investors, I had bought into S-Chips because of China growth story. But a spate of corporate scandals had given S-Chips a bad reputation that subsequently led to a serious crisis of confidence among investors. Today, I do not believe in the investment merits of S-Chips anymore. Nevertheless, at the request of a member, this article will discuss the case of Midas Holdings.

Corporate Profile

Every stock has its own story. Midas Holdings began life when it was founded in 2000 and listed in Singapore stock exchange in 2004. It also has a secondary listing on the Main Board of The Stock Exchange of Hong Kong.

As a manufacturer of aluminium alloy extruded products for the passenger rail transportation sector in the PRC, Midas has an established track record of supplying aluminium alloy extruded products to train manufacturers in the rapidly growing passenger rail transportation sector in the PRC since 2003. The Group also exports aluminium alloy extruded products internationally and has been involved in a considerable number of train projects in Europe, Americas and Asia.

Chan Soo Sen

Ten years ago, Midas Holdings created waves in Singapore stock market with a slew of contract wins worth billions of RMB. Midas had ridden on the wave of China infrastructure boom that saw the Chinese government investing trillions of RMB on metro lines in its cities. At that point of time, it certainly seemed that the Midas Holdings had the magical touch and nothing could stand in its way. Share price was flying high, reaching an incredible $2.00 in 2007.

Midas Holdings

But what attracted me to this stock back then was the appointment of Chan Soo Sen as one of its independent …

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DBS Bank share price ran riot and stormed to record level!

It is a case of “return of the king” as DBS Bank staged a comprehensive comeback by announcing an impressive 4th quarter 2017 results. Marred by net allowances of $815 million in the previous quarter, DBS lost to OCBC in terms of net profit for that quarter. However, DBS managed to redeem itself by announcing a much better 4th quarter results, with higher net profit of $1.19 billion.

The full year results had been boosted by acquisition of the wealth management and the retail banking business of ANZ in Asia-Pacific region. But unknown to many, the biggest profit contributor from overseas is actually its Hong Kong unit.

Magnificent run

Following the announcement of full year 2017 results, share price of DBS ran riot and stormed to record level. From $26 on 7 Feb, the shares stormed to $28 after the market re-opened following the Chinese New Year break. CEO Piyush Gupta certainly gave shareholders a big red packet by engineering such a fine performance. Many shareholders made much paper gains within one week!

The magnificent run of DBS shares was based on solid business fundamentals. DBS Group’s full-year 2017 net profit rose 4% to a record $4.39 billion. Total income also reached a new high, rising 4% to $11.9 billion from broad-based growth in loans and fee income, which more than offset the impact of a lower net interest margin and weaker trading performance.

DBS Bank

For the fourth quarter, net profit reached a new quarterly record of $1.22 billion, up 33% from a year ago. Total income rose 10% to $3.06 billion, staying above the $3 billion mark for the second consecutive quarter, as net interest income rose 15% to cross the $2 billion mark for the first time.

Buoyed by such fine performance, it is no wonder …

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Corporate battles of Q&M Dental Group

Lately, I went for wisdom tooth extractions and is in the midst of recovering from the operation. Like many people, I have deep fear of visiting the dentist. So you can imagine how traumatizing the whole experience it was for me. Incidentally, a member of SG Wealth Builder requested me to do a coverage of Q&M Dental Group. Although I do not feel like reliving the horror, I found out this counter could be an interesting stock.

Business profile

More than 20 years ago, founder of Q&M Dental Group, Dr Ng Chin Siau, was rejected a place in National University of Singapore’s Faculty of Medicine. Eventually, he was enrolled into NUS’ Faculty of Dentistry instead. But the rejection turned out to be a blessing in disguise as Dr Ng went on to found one of the largest private dental clinic networks in Singapore.

As a private dental clinic operator that caters to the mass market, Q&M Dental faces stiff competition from big boys like Raffles Medical, polyclinics and various smaller players. In addition, Singapore is a small market that is not big enough for many listed companies to develop any sort of sustainable growth. Under such circumstances, Q&M has no choice but to embark on both organic and inorganic expansions to enhance its investment moat.

From a single dental clinic in Bukit Batok in 1996, Dr Ng had certainly grown Q&M Dental to be a force to be reckoned among the dental fraternity. As at 30 September 2017, the Group has a total of 72 dental outlets, 4 medical outlets and 1 aesthetic centre in operations. He had also ventured overseas, with a total of 13 dental outlets in Malaysia and 1 dental outlet in People’s Republic of China.

Q&M Dental

The aggressive expansion came at a price though. The Group …

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Building wealth together

It was in 2012. Back then, this wealth blog had achieved some level of success which attracted a number of companies looking for partnerships. On one occasion, I was invited by an event company to promote an investment seminar. In return, I would be given a free ticket.

Usually, I would have declined such a request but one of the speakers turned out to be Jim Rogers, my favourite investment idol. Thus, I had accepted the invitation without hesitation and attended the event with much excitement.

Jim Rogers

Jim Rogers, as we all know, is an American famous for building massive wealth from his investments. He shifted his place of residence to Singapore since 2007 because of his belief that Asia would be the best place to invest globally due to its immense potential for growth.

Ideally, he preferred China and Hong Kong to grow his wealth but because of pollution issues, he eventually settled down in Singapore.

During the seminar, Jim Rogers did not share any specific investment strategies nor disclose any stocks that he favoured or avoided. Instead, he provided very generic views and how “white-collar workers would work for farmers in the future” because no one wants to be farmers anymore. He also expressed his firm belief on the great investment potential of commodity.

wealth

To be fair to him, after his speech, gold and oil did experience a mighty bull run that subsequently peaked in 2013. But from my perspective, I learned nothing useful from that seminar, which was held in a weekend. You can actually learn most of his insights from the internet without attending the seminar. I don’t see much value in attending the seminar. Of course, as it was a free ticket, there was no collateral damage to my pocket. But that weekend could …

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The holy water of Hyflux Perpetual Securities

As a home-grown water treatment plant developer, Hyflux needs no introduction. The company enjoys strong brand name in Singapore but in recent years, the business fundamentals had declined. To raise capital, Hyflux had jumped onto the bandwagon of issuing perpetual securities.

In 2016, Hyflux’s $300 million perpetual securities were selling like hotcakes as wealth builders rushed to purchase them like holy water. In fact, the perpetual securities were so oversubscribed that Hyflux expanded the offering to $500 million. In this article, I will share my views on Hyflux perpetual securities.

Perpetual Securities

The past 9 years had been a period of low-interest environment, driving investors to hunt for high yields investment instruments. The expansionary monetary policies in many developed countries had depressed bank saving rates and led to huge thirst among wealth builders hunting for yields.

Perpetual security had emerged as a form of attractive investment that yields lucrative returns. For those without active income, the prospect of having a fixed passive income that offers returns that are much higher than bank interest rates is simply a no-brainer, especially for retirees. But you must be fully aware of the risks before investing in such securities.

Typically, perpetual security is a form of hybrid bond that has features of both equity and debt features. Wealth builders must be aware that perpetual securities are not plain vanilla bonds.

Hyflux

First and foremost, as the name suggested, perpetual securities have no maturity dates. Because of this feature, investors are faced with long-term risk of interest-rate fluctuation. Currently, the interest rates are at all-time low because of the US Federal Reserve expansionary monetary policy. But when interest rates hike, holders of perpetual securities would be impacted.

Secondly, issuer of perpetual securities has the right, but not the obligation, to redeem the security. If the issuer …

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A rare second chance for Marco Polo Marine

Will Marco Polo Marine sink or swim? The shares of the beleaguered marine logistic group were actively traded recently due to the massive stake disposal (10.29%) by UOB and the emergence of white knight, the Teo family, founders of the Super Group. For the stakeholders, the most pertinent question now is whether this counter has finally seen light at end of the tunnel?

The past two years had been a nightmare for Marco Polo Marine as it also engaged in an epic legal dispute with big boy, Sembcorp Marine over the former’s unilateral termination of a US$214.3 million contract for building a jack-up rig that was under construction at Sembcorp Marine’s PPL Shipyard. It was only in November 2017 that both parties reached an agreement in favour of PPL Shipyard. Marco Polo was also forced to withdraw its claims against PPL.

Crisis company

The significant upheaval in the shareholdings came about after the successful completion of the debt restructuring exercise in which new shares were issued to creditors and new investors. On looking back, the marine logistic company probably would not have gotten itself into this mess had it not ventured into the offshore sector in 2010. But then again, nobody could have foreseen the slump in oil price leading to the protracted ailing oil and gas sector.

Marco Polo Marine

As a marine logistic company, the ship chartering operations of Marco Polo Marine comprises of two divisions – Tug and Barge Division and Offshore Division. The offshore division was established in end 2010 with the objective of venturing into the Offshore oil and gas sector. The offshore division has expanded steadily to its current sizeable fleet of 13 off-shore vessels. Marco Polo also carries out ship building, ship repairs and conversions, as well as oil and gas fabrications through its shipyard which …

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Stock market crash

On 5 February 2018, US Dow Jones plunged nearly 1,200 points, the biggest single-day decline on record. The sell-off in the US market came after a smaller decline of 666 points on the previous Friday. As expected, Asia stock markets suffered similar carnage. Straits Times Index was down 121 points on mid-day 6 February 2018.

Is this the start of a bear cycle or just a healthy correction? Many analysts had been forecasting the trend of the stock market for the longest time. A number of them predicted that a stock market crash is imminent. But the matter of fact is that nobody can predict the future. If someone tell you that he believes that the stock market will rise or fall, don’t believe him.

What is your strategy?

Whether it is a healthy pull-back or a devastating stock market crash, it is important to have an investing strategy. Far too many people lose their wealth to Mr Market not because of the failing of the stock market, but because of their flawed investment strategies, or the lack of it. If you followed my blog closely, you would have realized my strategy is to buy assets at discounted value or during distress times.stock market crash

You stand a higher chance of winning the stock market when you made money at the point of buying, and not at the point of selling. What does this mean? It is important that you grasp this concept, otherwise you would be constantly distracted by “market noises”.

During a bull run, many stocks would be traded at inflated prices. Just picture this, US Dow Jones had a magnificent run since the Great Financial Recession in 2008, reaching a record high of 26,000 in January 2018. Back in Singapore, the stock market also took the cue from the …

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Civil war at cash-rich Genting Group

Civil war broke out at Genting Group as members of the founding family engage in explosive lawsuits which threaten to undermine the control of Executive Chairman, Lim Kok Thay. The legal battle involves the will left behind by the late founder, Lim Goh Tong. Apart from this, Kok Thay is also engaged in a separate lawsuit with one of his sisters over beneficial interest in a block of Genting shares.

Many people fear that the family feuds would lead to devastating turmoil for the revered casino operator. But as far as I am concerned, I am convinced that the Lim family would ride out the storm and move on from this dark chapter. After all, this is Genting Group, one of the most successful Malaysian business empire for the last 30 years. To claim that these legal battles would bring down Genting Group is ludicrous.

The success story of Genting Highlands gaming resort is indeed intriguing. In fact, it was so successful that Singapore changed the law to legalize casinos in 2006 (Casino Control Act), paving the way for Genting Group to build a gaming resort in Sentosa. Since then, Singapore has become the second largest gambling market in Asia, behind only Macau.

The beginning

Nonetheless, the lawsuits threaten to mar the legacy of Lim Goh Tong, who have built a massive global empire sprawling Malaysia, Singapore, China, USA and UK. His rag-to-riches story is truly inspiring. Born in China, Goh Tong was forced to leave school at 16 when his father died. He left China for Malaysia due to political unrests in China, making his living from machinery trading. Subsequently, he ventured into iron mining and construction-related industries.

Despite having little education, Goh Tong had the foresight to build a casino at a forest hill-top in Genting, making it …

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Why ComfortDelgro investors should run for their lives!

Once upon a time in Singapore, taxi drivers held commuters to ransom with their ridiculous surcharges, bad practices of taking longer routes to earn higher fares and going ‘MIA’ during peak hours. Suffice to say, in every industry, there will always be black sheep. But the emergence of Grab and Uber have changed the game and levelled the playing field. Among the biggest casualty from this fall-out had to be ComfortDelgro, the largest taxi operator in Singapore.

The irony about ComfortDelgro is that as a taxi operator, it derives the bulk of its revenue from bus and MRT businesses, instead of its taxi business. With the disruption in the taxi landscape, perhaps in no time, ComfortDelgro may consider switching its taxi drivers to bus or train drivers. This scenario may become a reality due to a frightening competitive advantage of Uber and Grab – they are both relatively asset-lite companies. Read on to find out why this spell big trouble for this Singapore blue chip.

Horror ride for Comfort

The evolving on-demand transport landscape is indeed sweet revenge for commuters as taxi operators had monopolised the market for the longest time due to lack of credible taxi alternatives. A lot of credit must be given to the Minister for Transport, Khaw Boon Wan for democratizing the private-hiring industry.  Under his helm, the Land Transport Authority kept its promise of adopting “light touch” approach in regulating private-hire car services.

The biggest misconception of Grab and Uber is their business model. At the core, Grab and Uber are not taxi operators, but technology companies. Their product offering is basically the provision of digital booking system. Due to this, both Grab and Uber are not burdened by asset depreciation, legacy issues and regulatory baggage. The same cannot be said for ComfortDelgro.…

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