Good Article on Fintech

http://www.economist.com/news/finance-and-economics/21717393-advanced-technology-backward-banks-and-soaring-wealth-make-china-leader

CityDev 4QFY2016

Revenue                       $1,167m
PATMI                         $244m
EPS                              26.1 cents
NAV                             $10.22
ROE                             7.03%

Recurring Income Segment comprises of 55% EBITDA and 52% Total  Assets
International Income Segment comprises of 58% EBITDA and 45% Total Assets

Net Borrowings            $1865m
Gearing                         16%
Interest Cover Ratio     12.5X

CityDev has a gearing of 16% without taking into consideration fair value gains on investment properties!!!! It is one of the least geared companies in STI, I think.

Wilmar - FY2016

                                                       Dec 2016    Dec 2015
Debt/Equity (x)                              0.81            0.82
- Net Debt                                      $11,692m   $11,817m
- Shareholders' funds                     $14,435m   $14,394m
Adjusted Debt/Equity (x)               0.35            0.41
- Liquid working capital                $6,706m     $5,933m
- Adjusted Net Debt                       $4,986m    $5,884m
Net debt/EBITDA (x)                    5.21           5.63
Adjusted Net Debt/EBITDA (x)    2.23           2.80
EPS                                                15.4           16.1
NTA                                               159.4         158.6
NAV                                                228.5         227.6

Ezion - Profit Warning Q4FY2016 & FY2016

Ezion issued the following statement on Fri 17/2/2017:-

"As the market conditions of the global oil and gas industry remains uncertain, the Group has carried out an assessment on the impairments of its assets. While the value of the impairments are yet to be determined, the Group is expected to record a net loss for 4Q2016 and 12M2016 from this exercise. "

The turbulence in the O&G industry remains unabated.

SAT

I recently divested my investment in SAT at a price of $5.25/shr. Not that I think SAT is a  company that do not deserved holding on but it is more a case of valuation. The recent quarter and YTD 9 month earning are 5.8 cents/shr and 17.2 cents/shr corresponding. At a price of $5.25, this give a PE of about 22 if you take the anualized earnings. Although SAT has low or virtually no debt (debt/equity = 0.07) ,  is in a business area where entry of new competitors is not so easy and there may be potential growth oppotunities, I think the valuation has outrun the fundamentals of the company.

This in part I think is due to the inclusion of SAT into the STI last year.ETF funds who track the STI will automatically trigger buy into SAT leading to its higher valuation vis-a-vis earnings.

As such,  I decided to let go of my holdings at $5.25 but if a buying opportunity come up later, I will definitely consider again.

LMIRT 4QFY2016

Revenue                                 = $48,706,000
NPI                                         = $44,566,000
Distributable Income             = $24,335,000
DPU                                       = 0.87 cents
NAV                                       = 39 cents
Gearing                                   = 31.5%
Occupancy                              = 94.3%
Total Debt                               = $650.7m

SingPost - Impending Writeoff

The recent quarter of SingPost results is dismal. Net profits dropped by 27% yoy. Besides the traditional culprits of declining mail businesses, the main drag on profits came from the $10.2m loss suffered by its newly acquired US- based e-commerce company TradeGlobal.TradeGlobal is undergoing structural changes in its business as it lost two key customers ie one filed for bankruptcy and the other switched to in-source sourcing of its freight operations.

SingPost acquired Tradeglobal to the tune of $236m not too long ago under the previous CEO Wolfgang Baier.I do not know the rationale for the acquisition as I am not vested in Singpost after divesting them at around $2 sometime back when I am not convinced with its bloated valuation vis-a-viz revenue/profits.My interest only rekindled recently when Alibaba executed it second block purchase of  SingPost shares to become its largest shareholder.

I am expecting a large writeoff of TradeGobal on SingPost books to the tune of close to $200m in the coming quarters. the worst for SingPost is yet to come.

CroesusRetail 2QFY17

Revenue                                                                  JPY 3,180,943K
Income Available For Distribution                        JPY 1,685,014K
NPI                                                                         JPY 1,439,526K
DPU                                                                        1.81 cents
Gearing                                                                   46.1%
Interest Coverage Ratio                                          4.2X
Avg All-in Cost Of Debt                                        2.01%
Debt Maturity                                                         2.1 Years
NAV                                                                        JPY 77.89

Marco Polo - revisited

It was somewhere in last Nov that I wrote a short article on why Marco Polo could potentially be a candidate for bankruptcy.

Now as i look at it again, the share price has drop to 5.5 cents with a total market capitalisation of under US$12m. The recent quarter, it reported a net profit of in excess of $3m but the bulk of it came mainly from fair value change in foreign currency movements. On the other hand, cash & cash equiv has drop precipitously from $10m to down to $4m in the lastest report.

This company is indeed acting like a walking dead zombie where no one is willing to touch it with a ten foot pole. The CEO fortune has clearly turn south since his glamorous marriage with his celebrity taiwanese wife.The only that keep him on his seat is that his father own more than 50% of the distressed company.

All this is going on with the backdrop of the impending legal tussle with Sembcorp Submarine on the construction and handover of an "abandoned" oil rig. It is also noted that the CFO left the company last year.

This is a case of a distressed asset that could be betted on to make  a fortune or lose yoour pants!Any takers?Not me at this point in time.

A Piece OF Valuable Gem in Investing

I recently came across an opinion piece by Dr Seth A Klarman, a prominent value investor respected even by Warren Buffet.

He said the below:-

Perhaps the most distinctive point he makes — at least that finance geeks will appreciate — is what he says is the irony that investors now “have gotten excited about market-hugging index funds and exchange traded funds (E.T.F.s) that mimic various market or sector indices.”

He says he sees big trouble ahead in this area — or at least the potential for investors in individual stocks to profit.

“One of the perverse effects of increased indexing and E.T.F. activity is that it will tend to ‘lock in’ today’s relative valuations between securities,” Mr. Klarman wrote.

“When money flows into an index fund or index-related E.T.F., the manager generally buys into the securities in an index in proportion to their current market capitalization (often to the capitalization of only their public float, which interestingly adds a layer of distortion, disfavoring companies with large insider, strategic, or state ownership),” he wrote. “Thus today’s high-multiple companies are likely to also be tomorrow’s, regardless of merit, with less capital in the hands of active managers to potentially correct any mispricings.”

To Mr. Klarman, “stocks outside the indices may be cast adrift, no longer attached to the valuation grid but increasingly off of it.”

“This should give long-term value investors a distinct advantage,” he wrote. “The inherent irony of the efficient market theory is that the more people believe in it and correspondingly shun active management, the more inefficient the market is likely to become.”