Nov 2021 Updates

Nov 2021

 

Local Portfolio Value after market close (excluding USD and HKD)

S$143,317.76

Purchase

 

None

Sold

None

Dividends

 

Suntec Reit @ $89.28

CLCT @ $326.70

DBS @ $ 198

 

Total: $613.98 

Short-Term Transactions

 

Sold 2 x DIDI Call 211126 at $10 strike with $0.29 premium. Expired.

  

Sold 4 x GREE Put 211119 at $17.5 strike with $0.34 premium. Expired.

 

Sold 1 x GREE Put 211217 at $17.5 strike with $1 premium. 

 

Sold 2 x APPS Put 211210 at $55 strike with $0.90 premium.

 

Sold 1 x APPS Put 211203 at $55 strike with $0.71 premium.

 

Summary

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SGD portfolio:

  

Portfolio value dropped by around $7.5k due to the market downturn. DBS had a great fall over the past week.

 

Didn't make any transactions this month though I'm mulling over selling one counter in my portfolio as a rebalancing.

 

Currently making some comparisons between two potential candidates to see which one makes more sense to sell.

SingTel has reported a good set of results earlier this month. I have wrote my thoughts about it here.

Syfe Core Growth portfolio:

 

TWR continue to increase, reaching 7.93% this month. I'm pretty satisfied with the returns so far.

 

Have DCAed into this portfolio yesterday and plan to continue this every month.

USD / HKD portfolio: 

 

Didn't do any trades for this month though I'm monitoring several counters closely including PayPal and 9988. 

 

Also wasn't very active in the options market this month. 6 contracts expired which netted me US$185.05 (~S$253.54).

 

Left 4 other open contracts expiring next month.

  

Moving forward I will continue to use options to supplement my investable income.

My Biggest ROI to Date at 400% from an Unintended Investment

I was daydreaming just now and my thoughts drifted to the various investments and returns I had so far. Nothing spectacular.

 

However I got a sudden realisation that I actually had a 400% return from a trade I did several years back. It's like an epiphany!

It's not a stock or cryptocurrency (probably doesn't even exist back then) or anything remotely related to investment per se.

The item was a golf club which I bought from the 2nd hand market. Back then I was looking for an Iron 7 and I happened to see this piece.

I picked it up, took a few mini swings, felt good and paid for it.

Went to the driving range for a few rounds with it and subsequently left it in the boot of my car when I stopped going to the range.

After that I decided to list it online for 5 times the price and surprisingly someone actually contacted me to buy it.

And he paid straightaway without negotiation.

Hopefully the club found itself a better owner.

Thinking deeper, I found that the above is actually a reflection of my view towards investment.

Even though I did not buy the club for the purpose of investment, it actually turned out to be a good trade for me.

Same for other assets. As long as they can fetch a decent ROI, they are good investments. Doesn't matter whether they fall within the 'traditional' group of assets or newer class.

 

Same for cryptocurrencies. The reason I have not made any investment into cryptos is not because they are a sham or they are not back by fundamentals, blah, blah, blah.

 

Rather, it is because I have not read enough to understand them sufficiently.

 

In fact the way I see it, blockchain-based coins such as Bitcoin, Ether and Solana can have real everyday functions such as retail transactions.

The periodic burning of these coins can in theory, increase the valuations as well.

In short, it pays to keep an open mind towards all assets / investments even if they do not appear to have obvious potential initially.

Review of SingTel H1FY2022 Results

SingTel released their FY2022 1st half results today before market opens.

 

I have been looking forward to this due to the many positivities surrounding SingTel recently and indeed, the results are impressive though with certain weaknesses if we delve deeper.

 

Comparing to the corresponding period (H1FY21) last year,

 

Revenue

Increased by 3% driven mainly by the Australian business, NCS and Amobee.

 

EBITDA

Largely stable. Contribution from Australia consumer is offset by the decrease in Singapore consumer and NCS.

Associates Contributions

Regional associates which have frequently been a cash cow for SingTel, deliver 21% increase in pre-tax profits due to a strong turnaround by Airtel which saw operation improvement in their India and Africa markets.

 

Underlying Net Profit

 

Increased by 17%. For dividend lovers myself included, this is the figure to pay attention to since SingTel will be paying dividends based on 60% - 80% of its underlying net profit.

Net Profit

More than double the net profit (105% increase). What more can I say?

 

FCF

 

Free cash flow which I've always pay close attention to, improved 4% to S$1.771 B driven by Australia and the associates. Contribution from Singapore market actually fell around 10%.

Debt and Gearing

Net debt decreased by S$1.4 B and consequently, gearing has been reduced to 29% (compared to 32.1% last September).

This is good considering the anticipated CAPEX for the digital bank and continual business restructuring.

Since SingTel has not announced any special dividend for the net proceeds from divestment of Optus (~A$1.9 B) and Telkomsel (S$200 M) towers, I think they will be conserving this cash for the said capital expenses.

ICR

Interest coverage also increased to 14.8 times as compared to 13.3 times in last Sept.

CAPEX

SingTel has guided that the capital expenses for FY2022 will be around S$2.4 B. This should be well covered by the capital recycling which they have undertaken as mentioned above as well as the debt facilities on which they should have sufficient headroom with their A1 rating from Moody's.

(S&P gave an 'A' rating as well but with negative outlook although I believe this is last year's figure. Fitch gave an 'A' with stable outlook.)

 

Dividend

 

Interim dividend of 4.5 cents per share is a reduction of 11.8% from last year's 5.1 cents per share.

 

Looks like the new CEO, Mr Yeun Kuan Moon is a conservative man.

 

Assuming the full year dividend is reduced by the same margin, that will translate to 6.61 cents per share for total dividend. Is SingTel transiting from a dividend counter to a growth one?

 

Anyway this is only an assumption and the final dividend is very much dependent on the 2nd half results as well.

 

Personally I don't think it will go to that.

 

It has also been mentioned that barring any unforeseen circumstances, the Group expects to pay dividends at the upper half of its dividend policy range of between 60% - 80% of underlying net profit for FY22.

Let's see how it goes.

 

Since this round of dividend is a 76% payout, it translates into S$747.08 M which is about 42% of the free cash flow generated during this half.

This is well covered and sustainable.

 

Special Mention

 

Since I have always been an environmental person both professionally and personally (I run an environmental engineering company), I like to pay attention to companies' ESG efforts too.

I like that SingTel has pledged to cut their greenhouse gases emissions by 42% by 2030.

Challenges

The Singapore consumer market remains a challenging one for SingTel with their revenue contribution falling slightly and EBITDA falling by 5% in this half.

 

NCS saw its revenue increased by 5% but their EBITDA actually fell 21% although this is partly due to lower JSS distribution from the government.

 

Free cash flow contribution from Singapore market fell around 10%.

 

Possibility of deterioration of Covid-19 situation across the various markets.

 

Future Catalysts

 

Moving forward there are several catalysts that we can look forward to (pun intended : ))

 

Contributions from data centres. SingTel is projecting a ~170 MW data centre capacity in 3 to 5 years time, up from the current ~70 MW.

Earnings boost from Singapore digital banking operations from 2022 onwards.

 

Possible digital banking license win in Malaysia.

 

Continued rejuvenation of their business especially their pivoting into ICT and digital services.

 

Capital recycling (hopefully with special dividend) by offloading non-core assets. SingTel has guided a figure of S$2 B excluding the Optus divestment. So it is almost certain that we will see more divestments coming.

 

Continued improved performance from associates especially Airtel.

moomoo Welcome Bundle Update (November 2021)

Moomoo November Welcome Bundle

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Additional Reward: 1 limited edition "moomoo Oppa" figurine merchandise

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Reward: 1 Apple (AAPL) share
 

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Oct 2021 Updates

Oct 2021

 

Local Portfolio Value after market close (excluding USD and HKD)

S$150,806.60

Purchase

 

PayPal @ $244.60

Sold

None

Dividends

 

None 

Short-Term Transactions

 

Closed 1 x FUTU Put 211015 at $80 strike with $3.60 premium early at $14.40.

 

Sold 2 x DIDI Call 211029 at $9.5 strike with $0.30 premium. Expired.

  

Sold 1 x TSM Put 211015 at $107 strike with $1.37 premium. Expired.

 

Closed 2 x FUTU Put 211029 at $50 strike with $1.69 premium early at $0.50.

 

Sold 3 x LMND Put 211029 at $61 strike with $0.30 premium. Expired.

 

Summary

SGD portfolio:

  

Portfolio value increased by around $3.3k. Didn't add anything this month as funds are limited.

Several of my counters have reported excellent results with increased in DPU in their latest updates.

 

I have done a quick review over here.

Syfe Core Growth portfolio:

 

TWR hit a nice 6.38%. The absolute profit is not big since this is still a small experimental portfolio. But the feeling is still good nonetheless.

 

Have DCAed into this portfolio yesterday and plan to continue this every month.

USD / HKD portfolio: 

 

Added a small position of PayPal when the share price dropped below my entry target price. 

 

The Futu PUT that I sold for $3.60 took an unexpected hit when the People's Daily reported that Futu Holdings and UP Fintech face regulatory risks as China's new personal data privacy law takes effect on 1st Nov 2021.

 

The share price of both counters dropped swiftly within a short period. I decided to close the contract early for damage control but still took a hit of about US$1,085.

Such is the risk of China stocks nowadays.

This single contract turned my otherwise profitable month to a loss-making one of US$577.17 (~S$778).

Overall I'm still in the black for my options trading since I started in March this year.

Current P&L is around S$2,700 off a base of S$20,000. I think it's not too bad for a 7 months endeavour.

Hopefully this amount can continue to grow exponentially. 

  

Moving forward I will continue to use options to supplement my investable income.

Quick Review of My Portfolio (Oct 2021)

Found time to do some quick glancing and do a quick review for the counters in my portfolio since this is reporting season.

Mapletree Logistics Trust

 

 

MLT has always performed admirably since I first bought into them four years ago. The management is a forward-looking one with a record of shrewed yield-accretive acquisitions over the years.

 

This quarter is again an excellent one in my opinion.

 

Apart from the low 38.2% leverage which means much room for further acquisition and growth, I like that their average interest rate is low at 2.2% and their 5.2x ICR.

Mapletree NAC Trust

 

 

Results have improved over 1H last year.

 

I also like their low interest rate of 1.84% and their 4.1x ICR.

 

Yield is still above 6% against cost. 

Festival Walk's contribution to revenue and NPI remains below 50% which is good but can be better. A figure of ~25% would be more ideal.

This can be achieved with future acquisitions though investors ought to keep a close eye on the leverage which is pretty high at 41.4% currently.

 

One thing I noticed is that Festival Walk and Gateway Plaza continue to have negative rental reversions which no doubt will be a drag to coming results. 

Furthermore there is a possibility that a major tenant of Gateway Plaza might not extend the lease beyond December 2023.

 

With the visible hurdles ahead, i will probably maintain my existing holdings and not add further.

CapitaLand Integrated Commercial Trust

 

 

 

All metrics - revenue, NPI, portfolio occupancy & WALE, leverage, ICR, cost of debt, look healthy.

 

Clarke Quay's occupancy suffered due to government's regulations on nightlife. However I'm not too worried about this since this should be a passing phase.

 

Six Battery Road's relatively low occupancy rate is due to the ongoing AEI which I have covered in previous review. Again nothing to worry about as the AEI should be completed by end of this year.

 

CapitaSpring has achieved TOP for the office component. More importantly, they have achieved committed occupancy of 83.1% with another 7.2% under negotiation.

 

This is good to see as I was having some concerns on the occupancy rate of this property back in my May 2021 review.

 

CapitaLand China Trust

 

 

As mentioned previously, I like that Minzhongleyuan has finally been disposed. Though it's a small portion of the portfolio, it has been a drag for long.

 

I like that CLCT has gone into logistics and business parks right after getting the expanded mandate from unitholders.

 

The WALE by GRI and NLA for the business parks is relatively short at 1.9 to 2 years. This can be a double edge sword though if positive rental reversion can be achieved.

Yield is still above 6% against cost.

 

Upcoming quarters should see even better results with the addition of the 4 logistics assets.

ESR Reit

 

 

Performance this quarter is a good improvement over the last.

However if there is one metric that I don't like, it is their cost of debt which is high at 3.41%.

Another thing to take note of is the continual negative rental reversions (-2.2%).

 

It has been a busy quarter for ESR Reit with the divestment of non-core asset, a round of equity fundraising and inclusion into the FTSE EPRA NAREIT Global Real Estate Index.

 

The addition to the index last month is good news to existing unitholders as this will makes the Reit more relevant to funds and more visible to investors.

 

Of course the latest big news is the proposed merger with ARA LOGOS Logistics Trust. Honestly I have expected this ever since ESR Cayman acquired ARA Asset Management.

 

Overall I would say this merger makes sense considering the synergy and potential advantages from the enlarged Reit.

Suntec Reit

 

 

 

  

Good set of results driven mainly by their overseas portfolio with maiden contributions from Minster Building in UK.

 

Leverage is high at 44.3% which means less room for growth through acquisitions with borrowings.

Suntec City Mall continues to have negative rental reversions.

Suntec Convention continues to be a drag though quarterly loss has decreased.

Ascendas Reit

 

 

Continues to be one of the most well-run Reit in Singapore with constant portfolio rejuvenation through asset disposals and acquisitions.

 

Well diversified in terms of geography and asset type.

 

Good portfolio WALE of 3.8 years.

Netlink NBN Trust

Results will be announced on 3rd Nov 2021 after trading hours.

SingTel

 

Results will be announced on 11th Nov 2021 before trading hours.