Did a strategic switch of 56.25% of my SIA shares to SATS. During the switch, this allowed me to increase the overall holding of SIA+SATS by 6.25% and at the same time reduced the holding price from $6.3745/share (SIA only) to $5.999/share (SIA + SATS). A further reduction of the overall holding price to $5.8764/share due to the capital being taken back from the strategic switch.
The strategic switch was done according to 孙子兵法第八篇 -- 九变篇. As now holding both SIA and SATS share so the holding name shall rename to SIA-SATS.
The strategic switch opens up further options or rather strategies going forward. Nobody is certain when the Covid-19 going to end and how long the global aviation sector will recover. Thus, the strategic switch to SATS allow certain degree of diversification from the aviation sector. One of SATS's main business is food catering, distribution and logistic with the other being gateway services. In the past its main customers were airline but it has soon diversified the food solution business to other industries such as healthcare, hospitality and government agencies. While still want to hang on to aviation industry investment for the long term, a little diversification doesn't derail the long term plan but instead add on a certain aspect of buffer to it or maybe growth which you never know.
The cash call in March 2020 from SIA which I subscribed to for both the rights and the MCB increased my overall holding and that allow me the room to execute the strategic switch comfortably. In fact, the MCB is already being executed with 孙子兵法第八篇 -- 九变篇 from certain perspective when it is now being locked at floating market price which allows me to get some dividend from it (compared to zero coupon) going forward.
SATS at this moment is definitely in better shape than SIA in term of cash reserve, dividend payout to shareholder so while waiting for the global aviation sector to recover, the better shaped SATS would provide a better return than SIA.
As nobody can predict or tell what's going to happen in the future, the strategic switch will allow me at least 2 possible options going forward. One of them is should SIA doing a strong recovery, I could switch back the SATS to SIA to take advantage of it. Another option is should SATS doing a strong recovery faster than SIA, I could switch the remaining SIA shares to SATS. These 2 options are another example of 孙子兵法第八篇 -- 九变篇. On top of these 2 options, the "SIA MCB" also opens another few options for me going forward.
