Mar 25 Update

Purchases

SBS Transit: Bought a small stake at $2.65 in using SRS and CPF-OA

Its regular dividend has increased and at $2.65, the yield is 7.6%. In addition, it has lots of net cash in its balance sheet. The nature of its business (bus company in Singapore) is stable. Given the limited pool of stocks for SRS and CPF-OA, it's a suitable stock for my SRS and CPF-OA. 

Best Mart: Added to my minor stake. Buy price is $1.79

Added more, as it continues to provide >10% dividend, while limiting it's business to Hong Kong and Macau. 

Stella International: Bought a minor stake at $17.40.

I sold it earlier in January at $17.40. Now, I am buying it again, as its dividend (including special dividend) is close to 10%. It will be giving out special dividend of $0.56, likely for three years as part of its capital reduction plan. 

Yangzijiang Shipbuilding: Bought a minor stake at $2.39

Its share price has fallen from $3.30, after US wants to charge up to $1.5m for China ships entering US ports. As China shipbuilding is around 50% of global shipbuilding capacity, there's no way of avoiding such charges. 

Currently, Yangzijiang's order book is 6.5x of its annual revenue. As such, its near-term revenue is relatively secure. At current prices, it's trading at around 8x PE, with 5% dividend, >20% ROE and net cash in its balance sheet. 

Sales

Henlius: Sold all my position at $28

It's trading at higher than my sale price now. I sold it because it's trading at >70% higher than my cost price and I don't really understand the company well. It's safer to sell when the price is high. 

Booking: Sold half my position at $4,800

I decide to reduce position first, because there's increasing likelihood of US entering recession and travel will slow down during recession. I still like Booking and may buy it back at lower prices. 

Tianjin Development: Sold all my position (which is a minor stake) at $2.01 - $2.02

I sold it after its results release, because

-  I am disappointed with its low 28% dividend payout ratio when it has lots of net cash in it's balance sheet

- I want to increase my cash holdings / warchest, so that I can buy more US stocks if US market falls further. 

Yuexiu Services: Sold half my position at $2.92

I am slightly disappointed with its results and I want to increase my cash / holdings.

Current View

US market is in a downturn. I am waiting for US market to fall further, before buying those stocks in my watchlist (e.g. Booking, Alphabet). 

S&P 500 correction

 S&P 500 went into correction territory today, falling 10.13 from its peak.

- Interesting that this correction did not spread to other countries. 

- Currently, P/E ratio of S&P is 26.4 (Source: Gurufocus). Not cheap

S&P 500 show declines with each new or unexpected new Trump tariffs. 

This reminds me of the market in 2008, where market extended declines with each new negative surprises. The market starts to stablize and then bottom in early 2009, when there is no further negative surprises. 

As such, I guess that US market may be in for bumpy ride in April too, as President Trump annuouced the details on reciprocal tariffs and the affected countries retailiate against such tariffs.  

Next, there could be a maturity wall in 2025 and beyond (source), where a lot of US bonds / debt will be maturing. 

US govt would like to issue new bonds (to repay the matured debt) at low interest rate and at longer tenor than Treasury bills. Hence, the new US administration is focusing on lowering 10-year bond yields.

How do you get lower 10-year govt bond yield? 

- If there is higher probablity of recession, the 10-year govt bond yield may go lower, as money flocks to safe haven such as govt bonds in troubled times

- If there is lower fiscal deficit in future, 10-year govt bond yield may go lower.

To me, the current policies of US administration are trying to acheive lower 10-year govt bond yield.

Feb 25 Update

Purchases

Meituan: Bought a minor stake at $150, due to exercise of sold put options

My view on Meituan is found in earlier post.

Trip.com: Added more at $65 (before 4Q results release) and $60 (after results release)

It's a direct play on Asia online travel agency (OTA), which should see continuous growth in coming years, as Asian countries become more well-off and increase their travel expenditure. 

Marco Polo Marine (listed in Singapore): Start a small stake at $0.053. 

- It should see better earnings in 2H 2025 onwards, as it leases out its newly built CSOV (commissioning service operation vessel) and its 4th shipyard in Batam starts to contribute to proifts. The higher income should lower its 2026 PE to 6.x times.

- Downside is that offshore marine industry tend to have uncertainties / unforeseen events. 

- After buying, I realise that I may have bought at too high a price for my liking. Will keep the stake for now. 

Bosideng: Start a stake at $3.88. 

- China brand on down jacket / apparel, with brands for mass market and high-end

- At acceptable valuation with ~6.7% dividend and possible growth of 10% annually over next few years. 

Sales

LVMH: Sold my minor stake at ~$700. 

- Sold probably because luxury sales may be flattish in next few years, given weak China sales, slowing EU / US economy. 

Dream International: Sold a minor stake at $5.70 to lower my position size. 

- I am probably worried that US may impose tariffs on Vietnam one day. Thus I reduce my position a little. Dream Intl has factories in Vietnam.

Oiltek: Sold half of remaining stake at $1.30 to take profit

- Still has 1/4 of my original position left. Will let it run and wait for its 1H 2025 results

Sino Land: Sold all my position at $7.88. 

- A minor profit, as cost price is $7.50

- Sold to raise cash to buy Bosideng. 

China Aviation: Sold all my position at $0.885 (around my cost price)

- Sold after its poorer than expected 2H 2024 results and disappointing dividend payout. 

- While it has low valuation (EV / EBIT < 1.5), I prefer it to provide higher dividend payout and not hoard its cash and do nothing. BP owns 20%; yet it allows CAO to pay disappointing dividends. This suggests that BP is not good in capital allocation; which explains partly the disappointing BP results in recent years. 

Macro Thoughts

Deepseek's release has improved investors' perception of China tech stocks. The future trajectory of China/HK stocks will depends on the upcoming China NPC meeting in March. If there's more supportive policies to boost China consumption, we will see more sustained positivity around China/HK stocks. 

Meanwhile, US President Trump seems to use tariffs to raise tax revenue for US government. As such, we are likely to see more US tariffs on China as well as other countries in 2025. This increases uncertainties in global economic growth for 2025 and 2026. 

 

Jan 25 Update

Purchases

Barrick Gold: Bought small stake due to exercise of sold put options. Sold all subsequently, as it was a mistake to buy Barrick Gold at the current 'not cheap' valuation.

Atour: Bought a small stake at $25. 
- It is a capital light hotel operator (in China), with double-digit growth. 

- At time of purchase, valuation is close to 21x PE LTM, not cheap.

Henlius Biotech: Bought a small stake at $16.26

- It is a biopharma company, specialising in biosimilar. Its majority shareholder, Fosun, wants to take it private at $24 but failed. Given that Fosun wants to privatise it at $24, Henlius should have good prospects.

- At time of purchase, valuation is reasonable at around 12x PE LTM. 

KE Holdings: Bought at minor stake at $17, due to exercise of sold put options

- It is an online property brokerage in China. It's net cash is around 40% of market cap. Its business may improve if China property market recovers.

- At time of purchase, valuation is not cheap --> around 34x PE LTM, 18x PE NTM.

Meituan: Bought a minor stake at $148, due to exercise of sold put options

- It is market leader in local services in China. Basically, it gains a pool of customers via local services and sell higher margin services (e.g. merchant marketing, hotel booking) to its pool of customers. 

- At time of purchase, valuation is not cheap --> around 40x PE LTM, 16x PE NTM.

- I had very small stake prior to purchase, due to Tencent distribution of its shares in 2023.

Sino Land: Bought a small stake at $7.5. 

- Solid dividend play. It has net cash comprising 2/3 of its market cap; 7.7% dividend yield. 

Sales

Stella International: Sold all at $17.40

- Exited with some profit, as it was bought at $14.60 in Aug 2024. 

- Sold, because it may have limited growth moving forward, even though its dividend yield (incl special dividend) may be close to 10% for next 3 years. 

Stoneweg European Reit: Sold all (bought using cash) at $2.19

- Exited due to disappointment with its recent bond issuance at higher than expected interest rate. This may affect its dpu (dividend per unit) in 2025. 

- Did not sell the holdings bought via CPF-OA, as its 2025 dividend is still worthwhile compared to other Singapore Reits. 

Pentamaster HK: Sold all at $0.96

- An arbitrage play. Bought small stake in Dec 2024 at $0.93, as its majority owner wants to privatise it at $0.93 + $0.07 dividend. 

-  Sold all at $0.96 at a small gain, so that the cash can be deployed to buy Henlius. 

Louis Gave positive on China

In video below, Louis Vincent-Gave (from GaveKal Research) is positive on China. He noted that China now is similar to US at 2010-11 when US is doing QE. 

At 20.00: "These are the valuations you get a few times in your career: very cheap valuations, very low interest rates and massive policy support."

https://www.youtube.com/watch?v=HeggT6dSR60 

Notes on Mapletree Logistic Trust (MLT) and Mapletree Pan Asia Comm Trust (MPACT)

 MLT released its 3Q FY2025 results yesterday. The Edge has an article on it. What catch my notice:

- 32% of portfolio expires in FY 2026. 47% are in China. MLT expects -ve double-digit rental reversion in China to last another quarter, and then followed by negative high-single digit rental reversion

- OCBC Research: MLT's borrowing cost will rise from 2.7% (current) to 2.9% in FY2026.

MPACT released its results today. Same as last quarter, negative double digit y-o-y decline in DPU. Its non-Singapore properties continued to face headwinds. 

I compare Sino Land (listed in HK) and MPACT below, as they both own properties in Singapore and HK/China.  

MPACT (listed in Singapore)

Owns: Retail and commercial properties (office, business parks) in Singapore, HK / China, Japan and Korea. Crown Jewel is Vivo City in Singapore. 

Share Price: $1.19

Leverage: 38% of NAV.

Price to Book: 0.69

Yield: 6.8% (assume DPU of 8.09 cents)

Sino Land (listed in HK)

Owns: Retail, commercial and hotel properties in HK / China / Singapore. Also develop properties in HK / China / Singapore.

Share Price: $7.45 (hits 52 week low)

Leverage: None. Net Cash comprises 2/3 of market cap. 

Price to Book: 0.39

Yield: 7.8% (based on last year's dividend of 58 cents)

Other than not having a crown jewel like Vivo City, Sino Land seems better than MPACT. Sino Land has higher yield and high cash amount (i.e. not affected by interest rates going higher). 

Not vested in MLT and MPACT. Vested in Sino Land. 

2024 Review 3: Returns

 1) Total Asset Growth

Total asset growth is 25% this year, mainly boosted by equity returns. As I stopped working in 2023, there is no wage income this year. 

2) Asset Composition / Allocation

Allocation-wise, I stick to mainly 60% equities - 40% non-equities over the years. 

	Cash	Monies in CPF	Fixed Deposit / T-Bills / Bond ETFs*	Stocks*
2019	12%	23%	8%	57%
2020	9%	23%	2%	66%
2021	13%	21%	4%	61%
2022	12%	22%	11%	55%
2023	7%	9%	21%	63%
2024	11%	11%	18%	59%
*Including those bought using SRS / CPF

This year, the equities allocation has dropped, as I divested my world index fund holdings around Aug 2024. Monies in CPF holdings rose, as I did not buy further T-bill after earlier T-bills bought via CPF earlier matured. 

My stocks are broken down into 2-3 parts. CPF-OA Stock Portfolio rose due to CPF funds used to buy Reits and Reits ETF.

	Stocks
	Stock Portfolio (Cash)	SRS / CPF-OA Stock Portfolio	Index ETF (Cash)
2022	73%	11%	17%
2023	74%	11%	16%
2024	85%	15%	0%

3) Stock Portfolio (Cash) Return

This year's return is 45%, outperforming STI and IWDA. The outperformance is mainly due to HK market's good performance this year. 

Year	% Returns	STI (incl Dividends)	IWDA ETF
2020	3.6%	-7.5%	16.5%
2021	14.7%	12.5%	22.9%
2022	-13.7%	7.6%	-18.6%
2023	4.5%	4.0%	24.5%
2024	45.2%	21.9%	27.1%

3.1) Composition

HK shares form the bulk of the portfolio. The 'other stocks' refer to LVMH. 

I also split the stocks by type or reason for buying it. 'Hedging' refer to CNOOC and Barrick Gold bought as slight hedge against inflation. 

3.2) Position Sizing

My number of positions are relatively unchanged, while the Top 10 concentration dropped to 58%. 

	Number of Stocks	Top 10 position size
At end 2016	21
At end 2020	39	46%
At end 2021	19	71%
At end 2022	18	72%
At end 2023	24	68%
At end 2024	25	58%

My top 5 positions are as followed. 

12%	Tencent
8%	Ping An
7%	Plower Bay Tech
6%	FUTU
6%	Yum China

3.3) Slight update at end of year

Purchase: 

Barrick Gold, bought at $16.75, due to exercise of sold put option. The position is small and it is bought as hedge against inflation. 

Sale: 

Shanghai Conant, sold all at $22. Its share price has run up recently from $15 to $22, due to its involvement in AR/VR glasses. Decide to take profit, as the price seems a bit expensive and it is not a core holding. 

4) Thoughts for 2025

Based on past history, after 1-2 good years of returns, my stock portfolio will suffer some negative drawdown the following year. 

Hence, after a good 40+% stock portfolio returns in 2024, there's a chance of negative return in 2025. Nonetheless, I feel that HK market should have some upside in 2025, given the negativity in last few years, esp if Chinese govt can roll out large fiscal stimulus and stabilise its real estate market. 

If 2025 also provides good stock returns, the chances of negative returns in 2026 rose signficantly and it may be prudent to increase allocation to non-equities in end-2025.