Tuesday, November 22, 2016

SATs vs SIA Engineering Revisited

I wrote a short comparison between SATs and SIA Engineering quite a while ago. Recently, I revisited the article and was pleasantly surprised that my observations than was spot on. i am still vested in SATs but not in SIA Engineering.I am currently mulling over the price/valuations/eps between the two.

http://diyvalueinvesting.blogspot.sg/2014/11/sia-engineering-vs-sats-comparison.html

Sunday, November 20, 2016

My Comments on 4th Telco

It is becoming clearer who will be on the bid to be the NESA. It is going to be Myrepublic and TPG. It is not surprising that airYotta got kick out as it is a last minute formed company with only two executives from OMGTel.

now, assuming that both potential qualifiers bid, then the auction price is definitely not going to be lower than the minimum reserved price of $35m. TPG definitely have much deeper pockets than MyRepublic to go in a price war as they are a big provider of broad band in Australia.It is listed in Australia and the company make good profits.

If MyRepublic loses the bid, it may as well kiss goodbye to their business in singapore. M1's current broadbind pricing is even better than theirs and Starhub is closing it.It do not see how with a small base of 35K broadband users, they can survive with TPG being the fourth NMO.If MyRepublic won the bid, due to their lack of scale and financing, I seriously doubt they can launch a challenge to the incumbents. The mobile price war has already started as evidence from the drop in revenues from m1 and Starhub recent quarter.They have to satisfy the stringent QoS requirements of mobile coverage
which is going to soak up a lot of resources and funds in the next few years.There is also the impending capex expenditure that will eventually come up with 4.5G/5G in a few years time.

If TPG will to win the bid (which I think they stand a better chance), they will have to start from a fresh slate in a foreign country without any prior presence.TPG has done well it Australia previously as a high growth company via some smart acquisitions and M&A. but in the recent quarter, the revenues slowed down drastically and share price drop by 25%.Going into a 4th telco is going to be s slow and tedious grind. It will not help them repeat the high growth that they have achieved before.
The intention of TPG to come in is not clear to me as they are competing with Optus in Australia in broadband and in mobile as a MVNO.They may have other agenda in mind.

In any case, without local roaming agreement, it is not easy for a new telco unless they are going to soak in for the long term and burn hard cash.At the end of the day, the outcome is still uncertain as the incumbents have show a willingness to slash price to compete.


The current downward draft in share prices of Starhub and M1 provide some opportunities if you are willing to take some calculated risks.The effect of a 4th telco competiion will only come in a few years later if they manage to put up the requisite infrastructure to meet the QoS standards set in the bid process.

As a final comment, it is a human tendency to both overshoot on the extremes of optimism and pessimism.

Thursday, November 10, 2016

LMIRT 3QFY16

Revenue                                 = $47,030,000
NPI                                         = $43,338,000
Distributable Income             = $24,153,000
DPU                                       = 0.86 cents
NAV                                       = 39 cents
Gearing                                   = 32.7%
Occupancy                              = 94.8%
Total Debt                               = $695m

Wednesday, November 9, 2016

City Development Q3 2016


Revenue                       $923m
PATMI                         $170m
EPS                              18.7 cents
NAV                             $9.91
ROE                             4.54%

Recurring Income Segment comprises of 62% EBITDA and 51% Total  Assets
International Income Segment comprises of 43% EBITDA and 46% Total Assets

Net Borrowings            $3038m
Gearing                         27% (20% after taking into account fair value revaluation)
Interest Cover Ratio     10.9X

President Trump - Some Remarks


I bet a lot of people outside the US are shock or surprise at Trump's victory yesterday. Bear in mind that his is a decisive victory that do not leave doubt on anyone mind as to the will of the electorate whichever ways you try to slice the results. It also reveal how disconnected the US media and pollsters are with the ground as many of us far away from the battlefield source our info from these sources. What a shame as the proclaim value of freedom of speech is to allow people to look at things from different angles so that the truth can emerge. In this case, truth is buried under the titanic load of views of the intelligentsia and elites.

There is actually some silver lining in Trump's victory.Just image if Hillary was yesterday victor with a razor thin margin, it is entirely conceivable that Trump or at least a sizable portion of his ardent supporters will not take it lying down so easily.There will be contentions, protests and even violence that will eventually drag into a long and worn out process. There is no way Hillary could have govern under such circumstances in addition to a Republican congress both in senate and the house.

Now with Trump's victory, there is an outlet to channel those pent up frustrations with minimal disruption to the US at large.And Trump who is given a free hand will be able to enact some of the policies that he want without the damage of gridlock that plagued the entire second term of Obama administration. At least you can get some things done, only issue is whether these are the right things or not. In any cases, it is better than gridlock, in my personal opinion.

my two cents worth!

Monday, November 7, 2016

Starhub - Big Share Buy Back

Starhub bought a whopping 974K  of its own shares on 7/11/16 costing more than $3m in a single day!!! if you are thinking of shorting starhub share price in view of the impending news of the 4th telco spectrum auction, I think you should think again.

Friday, November 4, 2016

SingPost - Jialat


Singapore Post just released their Q2 results. revenues increased by 22.3% whereas net profits dropped by 27.9% due to higher expenses incurred due to Logistics Hub, redevelopment of SPC Mall and decline in domestic mail. dividend is also cut from 1.5 cents to 1 cents forthe quarter.

The combine US subsidiaries Jagged Peak & TradeGlobal incurred an operating loss  of $6.8m for the quarter.

A lot of people associated their optimism for Alibaba with SingPost.I think this might be misplaced.Alibaba business model need also a few addtional servers to ram up their business.SingPost is just the workhorse to ensure that the nitty & gritty role of ensuring  parcels get delivered to the end customer.It is a necessary part of the Alibaba puzzle but not the profitable part of it. Alibaba invested in SingPost to have control over SingPost solely to be their workhouse in SE asia.

I divested at close to $2 and never regretted it.