SG Wealth Builder

Can anything stop Capitamall Trust (CMT)? CMT share price is simply irresistible as it went on a rampage multi-years bull run. From IPO price of $0.96 to the current $2.60, CMT share price had defied gravity as it consistently rose through the years. Nevertheless, the supreme form of the unit price has somewhat dimmed the yield, which has fallen to 3.7%. Is it the right time to enter CMT?

CapitaLand Mall Trust in explosive form!

While the surging CMT share price is a happy news for existing unitholders, new investors who are keen to invest in Capitamall Trust must be put off at the increasing unit price. In my view, at Price/Book Value of 1.26, I do not think that this counter is overvalued at the moment. In fact, based on my research, Capitamall Trust is considered a low risk counter based on several factors. In this article, I will share my insights on why Capitamall Trust should be a good investment despite the low yield.

CMT share price

The top three major shareholders are Temasek Holdings (29%), BlackRock (8%) and NTUC Enterprise Co-operative (2.5%). With such a stellar group of institutional investors, investing in CapitaLand Mall Trust seems like absolute no-brainer.

From $0.42 to $0.94, Q&M Dental share price enjoyed a breath-taking form back in early 2015. That magical run earned Q&M Dental the second best performing stock by SGX in 2015. Those good old days must be surreal to investors as Q&M Dental share price subsequently went on an awful run that saw the counter falling by 46% in value. Sentimental investors who did not exit in time would have lost their pants if they held on to Q&M Dental shares till now.

In investing, there are many variables or factors that can influence the share price of a company. Even though Q&M Dental operates in an evergreen field of healthcare, it does not mean that Q&M Dental share price will be stable or keep rising. Investors must be aware of the state of play and enter at appropriate levels or they may risk getting caught with their pants down.

Is Q&M Dental share price in the mode of falling knife? To be fair to management, Q&M Dental had been consistently profitable since its listing in 2009. In fact, net profits surged from $3.8 million in FY2009 to a record $33 million in FY2016. However, net profit dropped to $23 million in FY2017 and then tanked to $13 million in FY2018.

In the month of May, all three local bank stocks suffered carnage. UOB share price suffered the worst, with correction of 16% while OCBC share price retreated 13% and DBS share price fell 15%. For OCBC and DBS, the correction was understandable because data revealed that both banks were starting to feel the chilling effect of 2018’s housing cooling measures. However, the correction for UOB share price was considered strange because financial data revealed that the bank had not been affected so far.

Demolition of UOB share price left investors scratching heads

In fact, building and construction loans increased from $54.9 billion in March 2018 to $67.1 billion in March 2019. Housing loans increased from $66.5 billion to $68.7 billion in the same corresponding period. Singapore market still formed the lion share of its loan portfolio (51%) while China constituted only 15.9% of its loans. Based on these data, it is not right to attribute the sharp fall in UOB share price to either the property cooling measure or the on-going US-China trade dispute.

Needless to say, the big boys were the culprits behind the meltdown of UOB share price. This counter topped the most net sell list among fund institutions in May 2019, with $110 million worth of UOB shares being net sold.

What a brutal decline! DBS share price suffered a devastating 15% decline in the month of May. For sure, investors would love to see the back of May as DBS share price had one of the most terrible forms. Nonetheless, it should be highlighted that DBS share price is not alone in the carnage. Fellow competitors, OCBC and UOB suffered the same fate as well.

Apparently, the big boys decided to show hand after the release of a stellar Q1FY2019. On the surface, this is considered puzzling because DBS had actually produced a good financial performance. In view of this, it is only logically that DBS share price continued to climb. It is not unreasonable to assume that the solid results would fuel the bullish form of the DBS share price, which surged from $24 in January 2019 to $28.40 in end of April 2019. However, as the saying goes, Man proposes, God disposes.

DBS Group Holdings share price ready to hit $50?

Needless to say, the big boys were the ones extinguishing the fiery form of DBS share price. What is the intriguing reason(s) behind the sell-offs? Should investors hang on for their dear lives or throw in the towel?

What a fightback! It has been a long while since I last covered luxury watch retailer, The Hour Glass. And boy, this counter recently rose from the tomb to stage a magnificent recovery after posting a stunning full-year financial result. Is this really the light at end of tunnel for The Hour Glass?

Can The Hour Glass roll back the time?

The Hour Glass Limited

Back in 2017, co-founder cum Chairman Henry Tay had warned of a severe winter ahead for The Hour Glass because of oversupply issue and a slow-down in the Hong Kong market. On the basis of the latest financial results, it appears to me that the management may have successfully turned. Revenue increased 5% to $727 million but net profits exploded by 41% to reach a whopping $71 million. To achieve this feat, the management had exercised cost discipline and pushed up top-line. No wonder The Hour Glass share price surged from $0.65 in March to the recent $0.80 mark.

Indeed, investors of The Hour Glass must have that bitter-sweet feeling. Chairman Henry Tay’s warning proved to be proverbial as revenue had previously slowed from $707 million in FY2016 to reach $691 million in FY2018. Profit after tax dropped from $53 million to $50 million in the corresponding period.

On 15 May 2019, Singtel announced a set of disappointing full year FY2019 results that saw  the telco recording sixth consecutive quarter of declining profits. However, the market did not react adversely. Instead, Singtel share price had been creeping upward in recent weeks. No prize for guessing but investors must be biting the bait of Singtel dividends and buy into this counter.

Can Singtel dividends really be your ticket to financial freedom? With an operating history of 140 years, Singtel dividends track record is certainly impressive. But in this blog, I have always advocated readers not to judge a stock solely by its dividend yield. Thus, in this article, I will examine not just the quality of Singtel dividends, but its overall business fundamentals and growth outlook.

Singtel share in turmoil

Singtel share in for terrifying ride

Obviously, investors must have heaved a sigh of relief as Singtel share price recovered 14% from a low of $2.88 in the start of the year. However, it had not been a smooth ride as the recovery was tempered with several pull-backs. The recent announcement of Singtel dividends of 10.7 cents per share must have led to the bullish form as investors are finding Singtel shares attractive again.

Good grief! SingPost share price is expected to encounter plenty of headwinds following the release of a set of disastrous full-year financial results on 7 May 2019. Net profit collapsed by a whopping 86% to reach $18.9 million. In the previous quarter, the management had dropped hints of massive impairment for the latest quarter but nobody would have predicted that the impairment amounted to $98.7 million.  No wonder all hell broke loose for SingPost share price.

SingPost share price set to roil big time again?

Horror show of SingPost shares

In the aftermath of the revelation, SingPost share price slumped from $1.05 to the current $0.93. What riled investors is the impairment charges of the U.S businesses – TradeGlobal and Jagged Peak. The last time that SingPost recorded significant impairments was in FY2017 which saw SingPost suffered impairment charges of a massive $208.6 million for TradeGlobal. The huge impairment charges walloped SingPost share price upside down back then. The U.S businesses turned out to be black holes for SingPost, wrecking havocs to its business fundamentals and subsequently led to overhaul of the management and dividend policy.

If investors are intending to buy on the dip, they must be mindful that SingPost share price could be in for a harsh winter for the rest of the year.

In the end, PUB did take over the Tuaspring desalination plant. In theory, that would be the final nail in the coffin for the ongoing Hyflux saga. But like a broken record that refused to go away, the unfolding Hyflux saga took on a life of its own with United Arab Emirates utility company Utico emerging as potential white knight. And yet again, Hyflux debt moratorium got extended for a few months.

Hyflux in dark final chapter

Hyflux saga is so bad its good

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

To be frank, I am not sure whether the prolonged Hyflux saga is a good thing for investors. It is not the first time that white knight had emerged and vowed to bring investors to the promised land. Indonesia’s SM Investments appeared out of nowhere to dangle a $530 million rescue mission in late last year. But more than a year later, the whole Hyflux saga remains in a shambolic mess and getting nowhere near the end of the tunnel. There were plenty of interest parties and talks of cash injections. But none of them were legal binding yet.

Apparently, the management of OCBC Bank decided to press the panic button. On 10 May 2019, OCBC announced a set of pretty decent Q1FY2019 results that saw net profits rising 11% to $1.23 billion. Despite the rosy report card, dark clouds loom head for OCBC share price as chilling effect of the property cooling measures is starting to take effect. To rub salt to injury, the issue of the ailing oil and gas sector has returned to haunt OCBC share price yet again. Against this backdrop, management had decided to launch a rescue mission for OCBC share price.

To be fair to the management, OCBC had achieved a breakthrough in the latest quarter as net interest margin has increased to 1.76%, up from 1.67% in Q1FY18. Return on equity (ROE) for 1Q19 has also improved to 12.0%, as compared to 11.8% in 1Q18. In view of such impressive performance, OCBC share price should be bullish. Yet since the release of the latest financial results, OCBC share price had slumped from $11.40 to the current $10.95.

OCBC share price torpedoed by Great Eastern

OCBC share price at the threshold of an era

In my view, the recent correction of OCBC share price is not unique to the bank alone.

Investors should brace for a wild ride as Genting Singapore share price looks set to come under severe pressure due to a series of unforeseen events. In early April 2019, the government of Singapore announced higher casino tax by 2022 and 50% increase in casino entry levies for Singaporeans and PRs effective 4 April 2019. Prior to this, Genting Singapore share price also come under heavy shelling due to sell-offs by major fund houses.

The impact of the tax hike cannot be underestimated. In late 2018, the Malaysia government implemented similar tax hike, causing Genting Berhad share price to tumble to a ten-year low. Although the Singapore casino tax hike will be implemented in three year time, the move will cast a dark shadow on Genting Singapore’s growth outlook and affect confidence in Genting Singapore share price. And confidence means everything in the stock market.

As the saying goes, it never rains but pours. This is certainly the case for Genting Singapore as it shot itself in the foot by announcing a disappointing Q1FY2019 that saw revenue dropping 5% to $640 million and net profit declining 5% to $205 million. Against this backdrop, Genting Singapore share price went on bombshell meltdown, correcting from $1.07 in April to the current $0.88 level.

It seems like SIA share price is destined for an apocalyptic correction. On 16 May 2019, Singapore Airlines reported a record annual revenue of $16.3 billion for FY2018/19. However, net profit collapsed 47.5% to $683 million. Since the announcement of the results, SIA share price went into an epic free-fall to reach the current low of $9.25.

On the basis of the current bearish run, it appears to me that SIA share price is likely to be bearish in the coming weeks. In my opinion, the correction of SIA share price could be an opportunity for long-term investors to accumulate this counter. The 5-year beta for SIA share price is only 0.43. This means that while in the short-term, SIA share price can be pretty volatile, in the long run, this counter is actually quite stable. The average 3-month volume is 23 million and Temasek Holdings shareholdings in SIA amounted to 54.9%. Based on this data, SIA should be a good stock to hold for the long-term.

The correction in SIA share price is attributed to the plunge in net profit. However, it is important to put things into context. SIA had an exceptionally good FY2017/18 because oil prices were trading at the range USD45 – 60 per barrel and total fuel costs amounted to $3.9 billion.

What a revelation! On 13 May 2019, after a probe by SGX RegCo, Best World finally revealed that Koh Kim Chuan, the legal representative and shareholder of Changsha Best, is the brother-in-law of the Group’s CEO and Managing Director.  Currently, Best World shares are suspended from trading and hapless investors are once again left high and dry.

In recent years, corporate governance issues had dogged numerous SGX-listed companies like Yuzoo, Noble Group, Midas and the likes. Even blue chips like Keppel Corporation are also not spared (Keppel was fined a whopping $560 million by US authorities in 2018 over corruption scandal). Against this backdrop, I am not surprised if Best World turns out to be yet another falling knife. It seems to be disaster after disaster for SGX-listed companies, to the extent that it is turning out to be a national disgrace. How can Singapore Exchange claim to be “Asian Gateway” when its listed companies keep making headline news for all the wrong reasons?

The meltdown of Best World followed swiftly after the resignation of its non-executive independent director, Chan Soo Sen, on 15 February 2019. To be factual, Best World share price started to spiral out of control on the day of Chan Soo Sen’s resignation announcement.

Sometimes life is stranger than fiction. On paper, Raffles Medical share price should have risen steadily for the past 5 years because of increasing revenue and net profits. For most investors, that would be a reasonable assumption. In reality, Raffles Medical share price plummeted from $1.58 to the current $1.00 level. The massive correction of Raffles Medical share price represented a horrifying 37% decline within the span of three years. The unfolding meltdown of Raffles Medical share price must have scared the living daylight out of investors.

Can Raffles Medical share price ever rock again?

Perennial Real Estate Holdings versus Raffles Medical

My stock analysis of Raffles Medical Group

Sure, many analysts claim that the healthcare is an evergreen sector because of Singapore ageing population and that investors should stay calm. On this note, I do not disagree. In fact, revenue for Raffles Medical increased from $374million in FY2014 to $489million in FY2018. Net profits increased from $67million to $71million during this period. But against the backdrop of such consistently good financial performances, what were the intriguing dark forces behind the rupture of Raffles Medical share price?

Make no mistake, the devastating plunge of Raffles Medical share price would have wiped out whatever meagre dividends that investors collected for the past few years (assuming they had entered at the high of $1.58).

Like many of its peers, CapitaLand share price is volatile because of the cyclical nature of the real estate business. Arising from this, the 5-year beta for this counter is 1.11. In spite of this, I like this counter very much because of its unique business strategies and diversified asset portfolio. Under the founding CEO, Liew Mun Leong, CapitaLand had embarked on a “asset recycling” approach, resulting in the real estate giant deriving majority of its revenue from recurring sources like commercial, retail and serviced residence.

Indeed, CapitaLand investors may think that volatility is undesirable but I view it otherwise. You can make money out of the volatility  of CapitaLand share price, provided if you used the right strategies. Looking at the past four year data, there is a clear pattern concerning the movement of CapitaLand share price.

Hit and run with CapitaLand share price

In October 2014, CapitaLand share price surged from $3.00 to reach a high of $3.75 in April 2015.Subsequently, the counter plunged to a low of $2.80 in September 2015. Following that, CapitaLand share price surge again to reach a high of $3.40 in December 2015. For most of 2016, the stock languished to a low of $3.00 in December 2016.

The data certainly looks grim for SPH share price. 1HFY2019 results revealed that despite aggressive efforts to revive its fortune, SPH revenue and net profits continued to free fall like no tomorrow. This is indeed puzzling because the dismal financial performance came on the back of various recent acquisitions aimed at stimulating growth.

Figtree Grove (85% stake) Shopping Centre in Australia was acquired in December 2018 for A$175million. Then M1 was delisted following the successful acquisition of all the remaining shares from the open market through SPH joint venture with Keppel, Konnectivity. UK Student accommodation portfolio added 380 beds with 2 new acquisitions for $369million. Yet despite all these moves, revenue continued to slide, rupturing the form of SPH share price in the process.

It is really mind-blowing to note that total revenue for 1HFY2019 decreased 5.2% while net profit collapsed 32% to reach $33million. With such result, it takes an ardent fan to be convinced of SPH long-term growth prospect. The disruption of the traditional newsprint business is well-known and everybody knows that SPH had embarked on a transformational journey to digitize its businesses and diversify revenue sources through property investments. But it has been more than 5 years in the work, yet total revenue plunged from $1.2billion in FY2014 to $982million in FY2018.

It’s that “uh-oh” feeling for investors as StarHub share price faces another torrid run following the release of a terrible 1QFY2019 results that saw net profit plummeted by 23% on a year-by-year basis. Investors must be having that sinking feeling again and wondering when will StarHub share price ever see daylight again.

The problem for StarHub share price is that it tends to shoot itself in the foot. In February 2019, StarHub share price corrected from $1.94 to $1.610 following the release of a dismal FY2018 results and the cut in dividends for FY2019. Since then, StarHub share price had struggled to maintain its form. With the latest results, surely the counter will go into yet another tailspin.

Given the latest financial performance, it takes an ardent fan of StarHub to have conviction in StarHub share price. Revenue for mobile, Pay TV and Broadband segments all declined. Cyber security services recorded an impressive 41.4% in revenue but suffered a whopping $11.4million losses in 1QFY2019. Sales from equipment was the only bright spot as revenue surged by 33.3% but the profit margin from this segment is razor thin, thus it cannot be the game-changer for StarHub.

Apart from the disappointing results, investors must be wondering if StarHub would fall into the abyss like Hyflux.

Investors must be wondering if NetLink NBN Trust would do an Asian Pay TV Trust (APTT) or Hutchison Port Holdings (HPH) Trust. Both the unit prices of APTT and HPH suffered catastrophic meltdowns in recent years due to declining business fundamentals. Incidentally, Temasek Holdings is a major shareholder in all the three trusts.

Even though both APTT and HPH Trust are favoured by investors for their high yields, the plunge in their unit prices would have offset the returns. Thus, the important lesson for NetLink NBN Trust investors is never judge a trust by its yield. Always make the effort to understand the business fundamentals when investing in equities. While big boys like Temasek Holdings can afford to lose monies in their investments, retail investors surely don’t have such deep pockets.

There are analysts who claimed that NetLink NBN Trust is a low risk counter. But the funny thing is, NetLink NBN Trust never made it to the top ten institutional net buy list for the past one year. This means that for some unknown reasons, fund houses had been giving this trust the cold shoulder. Obviously it is still early days to judge NetLink NBN Trust but let’s take a look at its investment moat and examine the underlying risks.

What a fine performance! DBS Group Holdings share price looks set for another rally following the announcement of a solid Q1FY2019 financial performance. On 22 February 2019, I predicted that DBS Group Holdings share price would be on form because of the strong Net Interest Margin (NIM) performance. Since then, the counter surged from $25 to the current $28.

On the basis of the healthy business momentum, DBS Group Holdings share price is likely to continue its dazzling run, perhaps even reaching the $50 mark. Last year’s remarkable run of DBS Group Holdings share price was punctuated by the shock announcement of the tightening of Additional Buyer Stamp Duty (ABSD) and Loan-to-Value (LTV) ratio on residential property purchases. Nonetheless, it appears to me that DBS had managed to shake off the blues and resume its story.

Another reason for the bullish form of DBS Group Holdings share price is the reduction of allowances and non-performing assets (NPA). This is one major downside risk for DBS Group in recent years because of the ailing oil and gas sector. For Q1FY2019, the allowances was halved, dropping from $164million in Q1FY2018 to $76million FY2019. NPA also decreased from $5.8billion to $5.6billion.

Looking at the latest financial results, I could not find any fault with DBS Group Holdings’ performance.

Will Best World do a Hyflux? Investors of Best World must be horrified as the counter collapsed from a high of $3.30 in February 2019 to the current $1.62. Within the span of two months, Best World share price plunged by more than 50%. Both Best World and Hyflux were founded by female business leaders, namely Doreen Tan and Olivia Lum respectively. Incidentally both are home-grown companies facing some sort of troubles lately. Nonetheless, the similarities ended there. Let’s take a look whether Best World is a falling knife in the making.

For the records, Best World is a Singaporean company that specializes in direct selling and franchising of premium skincare, personal care, nutritional and wellness products. It is definitely not an S-chip company awaiting to implode. Many investors may have this wrong perception probably because of its recent China misadventure. More on that later. What I am emphasizing here is that it is important for investors to have a basic understanding of Best World’s business profile, the unique business model and its competitive edge before making judgements.

What is direct selling and is it considered multi-level marketing (MLM) or pyramid marketing, both of which are illegal in Singapore and China?

White knight? What white knight? Dark days loom ahead for Singapore investment community as Hyflux enters its final chapter of its protracted restructuring process. On 17 April, I wrote that Hyflux is on course for a horror finale. That fateful day, PUB issued a 30-day notice to Tuaspring Pte Ltd (TPL) to terminate the Water Purchase Agreement (WPA) and take over the Tuaspring Desalination Plant (TSDP).

Hyflux saga is so bad its good

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

When Hyflux sought bankruptcy protection from the High Court back in February 2018, nobody could have imagined the outcome of today. There were plenty of high hopes as former white knight, SM Investments, had emerged out of nowhere to dangle a $530million rescue mission in late last year. But more than a year later, Hyflux appears to be on course for liquidation following the collapse of the rescue package. It must have been a devastating roller-coaster ride for Hyflux investors.

Hyflux going down in flames?

Evidently, PUB only intended to take over only the desalination plant of Tuaspring. On the other hand, the latest development triggered its largest creditor, Maybank, to terminate the Collaboration Agreement and take over the power plant.

What a finale. What a finale. On 3 April, I wrote that Hyflux saga is so bad that its good. The following day, Olivia Lum confounded investors by announcing the termination of a key restructuring plan with white knight, Salim-Medco consortium SM Investments. Prior to this latest turn of event, Hyflux investors had staged a public protest and planned to vote against the proposed rescue plan. But as the saying goes, Man proposes, God disposes. Apparently, Olivia had the last laugh.

Hyflux in doomsday path?

The latest twist is indeed stunning because Hyflux claimed that it has no confidence in SM Investments in completing the rescue deal and is currently seeking other potential investors. But what is even more bizarre is that Hyflux claimed that PUB’s intention of taking over Tuaspring Desalination Plant without seeking compensation would enable the firm to reach out to a “wider pool of investors”.

Does Hyflux deserve a comeback like OSIM?

SembCorp Industries should invest in Hyflux

The holy water of Hyflux Perpetual Securities

Make no mistake, Tuasping is an integrated plant consisting of both water desalination and gas turbine power plants. Obviously, it makes sense for PUB to take back the Tuaspring Desalination Plant from Hyflux because of water security purposes.

What is a growth stock, a dividend stock and a defensive stock? These terms had often been used in various online articles and can be quite intimidating to investors. Understanding these terms is essential because you may want to buy stocks that fit into your investment strategies and temperament. In this article, I will attempt to explain these terms and use some SGX stocks as examples.

Best SGX stock research campaign

Many Singaporean investors will agree with me that investing in SGX stocks is not a walk in the park. Quite a number of local investors had lost their pants investing in Hyflux, Noble and Midas stocks. Then there were those investors who had lost their monies investing in oil and gas companies facing liquidation issues due to the meltdown of oil prices. And don’t even get me started on the thrashy S-chips that had caused plenty of heart pains for investors. On looking back, the past decade was certainly disaster after disaster for SGX stocks.

Given the spate of investment misadventures, investors can be forgiven for thinking that SGX stocks tend to generate poor returns. To this end, I beg to differ. Stock picking is both an art and science.

In September 2018, I wrote that ThaiBev share price was trading at attractive levels and that represented a good opportunity for accumulation. Since then, ThaiBev share price went on a rampant bull run, surging from $0.60 to the current $0.85. The powerful run represented a whopping 42% increase for ThaiBev share price.

Devastating crash of ThaiBev share price

Given the giddy form of ThaiBev share price, should investors take profit and cash in or hold on with the expectation of further hike in ThaiBev share price? To answer this question, it really depends on your entry and exit levels. If I had entered this counter at $0.60, I would cash in now.

Some readers may say that I have short-term mentality but I don’t really care. A dollar gained is a dollar earned. There are not many SGX-listed stocks that appreciated in value in such short-time, so investors should strive not to be greedy in this sort of market condition. Fundamentally, this counter is a growth stock and therefore, ThaiBev share price is sensitive to its revenue performance.

Certainly, it had been a bitter-sweet journey for ThaiBev investors as ThaiBev share price plummeted following the implementation of a new Excise Tax Act in January 2018.