Tuesday, November 30, 2021

Portfolio -- Nov 2021


Investment Portfolio


1. Received MapletreeInd Trust dividend of 3.47 cents/unit
2. Received Frasers Cpt Trust dividend of 6.089 cents/unit
3. Received "SIA MCBz300608" dividend of 3.426 cents/unit
4. Received SingPost dividend of 0.50 cents/share
5. Sold "SIA MCBz300608" at $1.04, net divest price $1.01
6. Divestment of "SIA MCBz300608" resulted in capital gain of +1.27% and dividend return of +4.80%
7. Total Realized increased from +22.31% to +22.33%, Cash holding increased from +45.52% to +47.74%



StockHolding Price*Market PriceUnrealized Profit/LossDividend Return
Non-Strategic
CapitaMall Trust$1.155$2.11+80.34%+108.00%
Genting SP$0.5314$0.77+44.32%+38.58%
KepCorp$7.4156$5.10-31.59%+51.66%
SIA-SATS$5.8764$4.2406 #-28.14%+27.29%
SIA MCBz300608$1.00$1.01 #+1.27%+4.80%
SingPost$1.0093$0.66-35.18%+55.01%
MapletreeInd Trust$0.9721$2.64+170.45%+85.65%
Kep DC Reit$0.9946$2.35+135.63%+43.88%
Frasers Cpt Trust$1.6908$2.27+33.31%+28.25%
STI ETF$2.3423$3.118+26.28%+5.40%
Unrealized

+22.05%+47.00%
Strategic
Lendlease Reit--$0.8888.0 cents/share12.783 cents
InnoTek--$0.7676.00 cents/share
Fu Yu--$0.2828.00 cents/share3.7 cents
Cost
$0/share
Unrealized

+2.36%
(% of Non-Strategic cost)
Summary
Total Unrealized**
+12.76%--
Total Realized (Strategic)**
+639.12%
+27.34% (% Non-Strategic cost)
+54.89%
85.256 cents/unit
Total Realized (Portfolio)**
+22.33%+68.50%
Cash----+47.74%--
Total Portfolio***
+103.59%--
Portfolio Variant

-1.84%
STI29/10/2021 = 3198.1730/11/2021 = 3041.29Change = -4.91%

# = Lock in tracking floating market price


Stock Incubator Portfolio


1.  Semi locked Nordic price at $0.3725/share
2.  Entitled Valuetronics dividend of HKD 4 cents/share
3.  Locked Creative price at $2.50/share


Stock Holding Price*Market PriceUnrealized Profit/LossDividend Return
Nordic$0.100$0.3725+270.84%+75.14%
Valuetronics--$0.53--HK 113 cents/share
Creative$3.4819$2.50-28.76%
Unrealized

+139.88%+41.96%
Summary
Total Unrealized **--+52.43%--
Total Realized **
+32.29%+18.81%
Cash----+62.52%--
Total Portfolio    ***
+103.54%--
Portfolio Variant 

+2.05%
STI29/10/2021 = 3198.17    30/11/2021 =  3041.29Change = -4.91%


* = Initial Buy Price + Average on Right Issue
** =  Unrealized or Realized gain/loss in term of percentage with reference to total investment capital

*** = (total unrealized + total realized) with reference to total investment            

Saturday, November 27, 2021

Stock Incubator Part 1.4 -- Nordic Group

With reference to the news dated 10th Nov 2021 of Nordic Group launched an acquisition of Starburst Holdings Limited.  The announcement was for Nordic Group to acquire Starburst with a pre-conditional voluntary offer.  The offer shall only be triggered when it has satisfied or waived off the pre-condition on or before 10th February 2022.  Should the deal go through, the offer will be S$0.238/share in cash to all Starburst Holdings Limited's shareholders.


As a shareholder of Nordic Group since 2014, this piece of news really caught me off guard.  Firstly, Starburst Holdings Limited is not a competitor of Nordic Group in term of business.  While Nordic Group's business is mainly focused on O&G or O&M sector, Starburst on the other hand is focused on the military related business.  Not even a bit of overlap and that really puzzled me about the news.  Another concern is the financial impact after the acquisition for Nordic Group.

NTA (as at 30th Jun 2021) shall be reduced from 16.9 cents to 10.7 cents

NAV (as at 30th Jun 2021) shall be reduced from 24.5 cents to 22.3 cents

EPS (as at 30th Jun 2021) shall be increased from 2.0 cents to 3.9 cents

Net Cash (as at 30th Jun 2021) shall be from +S$12.5M to -S$48.3M

Gearing (as at 30th June 2021) shall be from -0.13x to +0.56x

The last two are the concerning points as the company will swing from a net cash to a net debt, a swing of S$60.8M.  


There will be plus points to the proposed acquisition, if not why go ahead.  So what's the benefit of it ?  The followings are the rationale for the acquisition as according to the company :-

1. Business synergy

Starburst's business and operation is a strategic fit for the company as the engineering competencies, know-how and resources of both companies are complementary.  Starburst will add civil and mechanical form structure products and services to Nordic Group.  Nordic Group's client base will be enlarged due to Starburst and a strong potential for cross-selling of Nordic Group's mechanical, electrical and instrumentation, insulation and scaffolding services to Starburst Group.

2. Potential for Continued Growth

Starburst Group's business could be considered a niche sector meaning there shall be less competition and growth's trajectory should be very well defined.  After all, military expenses globally is very difficult to see sudden reduction.  Even if in bad economy situation, military spending from countries to countries don't seem to be drastically effected.


From the above, the technical knowledge of Starburst should be that little overlap.  Another factor based on personal analysis could be foreseen declining revenue in the O&G or O&M sector and the company in need another growth sector for the company in the long run.  Kep Corp already sold off the rig building business to Sem Mar and in the past few years, couple of O&M companies like Swiber and Ezra also running into problems.

Given the benefit of doubts the company is making the right decision for the acquisition, the question as a shareholder is what's the time frame the company have to revert back to net cash position and what kind of growth trajectory is expected of Starburst ?


As a precaution, have sold off 30.12% of holding at S$0.355/share.  However, would consider that as locking in that 30.12% at the price of S$0.355 rather than divestment.  My overall holding price is S$0.10/share, so have that buffer to wait and see and regard this locking in as a strategic move.