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.