China Overseas Land, Yanlord and HK Land

[6 Apr: Added HK Land]

Recently, I found China Overseas Land (COLI) and Yanlord to be cheap.

Below are some numbers for my reference. The figures are extracted from Shareinvestor.com

	China Overseas Land	Yanlord	HK Land
	HK$	S$	US$
	2 Apr 2021		6 Apr 2021
Price	20.2	1.24	5
NAV/shr	34.03	3.27	15.3
P/B	0.59	0.38	0.33
	Earnings Per Share
2011	1.84	0.16	2.28
2012	2.29	0.19	0.61
2013	2.82	0.15	0.51
2014	3.39	0.14	0.56
2015	3.61	0.16	0.86
2016	3.64	0.29	1.42
2017	3.72	0.34	2.73
2018	4.10	0.36	1.05
2019	4.31	0.34	0.08
2020	4.48	0.27	-1.13
Average	3.42	0.24	0.90
P / 10 yr Avg E	5.91	5.16	5.57
Net Debt To Equity ((Long Term Debt + Short Term Debt - Cash and Short Term Investments)/(Shareholders' Equity - Other Share Capital))	0.363	0.823	0.128

 

COLI is more expensive than Yanlord and HK Land in terms of P/B and P/E.

HK Land is the least riskly. COLI is less risky compared to Yanlord, as its net debt to equity is lower.

Looking at P/10 yr Avg Earnings, Yanlord is the cheapest, while COLI is most expensive. Nonetheless, COLI is just a tad more expensive at 5.9 while its P/B is higher at 0.59. This suggest that COLI’s earnings power is higher than Yanlord and HK Land.

Dividend-wise, COLI and Yanlord are similar. Nonetheless, COLI has annual increase in dividends, which is a plus point. HK Land has the lowest dividend yield.

	China Overseas Land*	Yanlord	HK Land
	HK$	S$	US$
	2 Apr 2021		6 Apr 2021
	Dividend Per Share
2011	0.33	-	0.16
2012	0.39	0.0186	0.17
2013	0.47	0.0130	0.18
2014	0.55	0.0130	0.19
2015	0.61	0.0152	0.19
2016	0.77	0.0435	0.19
2017	0.80	0.0680	0.20
2018	0.90	0.0680	0.22
2019	1.02	0.0680	0.22
2020	1.18	0.0680	0.22
2020 Dividend Yield	5.8%	5.5%	4.4%
*May have 10% withholding tax on dividends

 

Some Thoughts

SG Hedge Funds Underperformance

I have been following the performance of Singaporean based hedge funds who practice value investing. It is interesting they have been under-performing the Asia Pac Ex Jap index based on last 5 years’ returns. I am guessing that part of the reasons is due to higher returns from tech shares and these hedge funds have under-weighted tech shares.

Tech shares have seen declines recently. If this trend continues, we may see these funds outperforming the index this year.

	Returns
	2016	2017	2018		2019	2020	Cumulative
Aggregate Asset	11%	13%	-10%		2%	4%	20%
Inclusif Class A	-	-	-9%		9%	6%	5%
Heritage Fund	21%	12%	-13%		8%	-1%	26%
Lighthouse Advisors	5%	21%	-21%		-5%	13%	8%
Lumiere Capital (SGD)	-8%	11%	-14%		8%	-3%	-8%
Asia Pac Ex Japan*	7%	30%	-11%		19%	19%	77%
FTSE Asia ex Japan Index ETF (HK 2805)	6%	40%	-14%		17%	24%	83%
*Extracted from Aggregate Asset webpage

 

Over-diversification?

I have been wondering lately if I have over-diversified my holdings and hence affect the performance of my stock portfolio

	Number of Stocks
At end 2016	21
At end 2020	39
At 5 Mar 2021	35

 

In 2021, I have started to reduce my holdings with the following allocation guidelines:

·         Initial stock position of 3%

·         Can build to 5% if the stock prices fall further or there is secular growth trend behind it

·         Can build to at most 8% if the stock is very undervalued

·         Stock position cannot be more than 20%. (This has not occurred so far, as I will start to reduce the position as the stock price rises)