STX – Soon Two Xchanges

Today, STX PO shares price rose 10% to close at $2.33 with a volume of 18.7M. (Punters stocks like Sapphire and Jade only managed turnover of 11M)
So what’s up with STX PO?
If you’re into Fungshui, this could be a case of ‘Tian Shi Te Li Ren He’ – Heaven, Time, Earth, Strength and Human, a powerful combination of elements.
Lets us take a look at each of these elements, starting from the back.

HUMAN
For a stock to move, you need momentum. Price increase doesn’t mean much without support of volume. Today, STX got into the Top volume list, this is impressive for a $2.3 shares. Many of these trades are in blocks of over 100lots. You can be sure the Fund managers (the Human) are back buying.

STRENGHT
2007 1Q, EPS increased 130% to 3.5centUS.
2007 2Q, Net Profit rose 5 fold to U$178M.
STX definitely has the strength to grow. I’ll not bored you with the details, if you want more evidence, please click on the SGX link on the right of this page and have a look yourself.

EARTH
STX is trying to create more ‘earth’. In another words, it’s trying to looking for more favorable ground to expand its operation.
In May 2007, there are talks that it may list on Seoul Exchange. On 24 Aug, it announced its plan to float 340 million new shares, or 20 percent of its current share capital, to raise $400 million to fund purchases of new ships. The listing, which will make STX the first South Korean firm to go public abroad and list at home later. A home coming for a favorite Son which will sure to create lots of interest.
With a dual listing, the profile of STX will increase. Fund manager from all over Asia will take more notice of this stock which got the endorsement from 2 Exchanges.

TIMING
This one is tricky, 2 ways of looking at whether Timing is right.
1. On a macro view, Yes. S’pore, Korea is doing well. Asia economy is on the raise.
2. On a micro view, maybe… No. US Sub-prime woes are not completely over.
The proposed listing date is mid to end Sep (yet to finalize). A lot of things can happen in 3 weeks, which leads me to the final element, the All Mighty Heaven.

HEAVEN
This is the one that can steer the course of everything just by talking. Yes, Ben ‘The Heaven’ Bernanke. He, the ‘God’ of world economy has the power to decide whether it’s a Up 200pts or Down 300pts day. He is due to give a speech today (Fri US), and the STI next Monday’s fate will depends on it. Nonetheless, I believe Uncle Ben is on our side, any indication of rate cut will send STI sky rocketing to HEAVEN again.

Have a good weekend!

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

BUY K-Reit, Goldman Sachs agree!

K-Reit is now trading at $2.43, a retraction of 30% from its high of $3.54 just some months back.



In late July, K-Reit announced acquisition of 1/3 stakes in One Raffles Quay (ORQ, see picture above) from Keppel Land for $941.5M. This works out to be $2194psf. Comparing this to Finlayson Green (just opposite ORQ) which was transacted at $2650psf, the price paid by K-Reit is a steal! This price by K-Reit is at the lower end of market expectation for a spanking new prime grade A office building located at the New Marina Bay Financial area.

So why did the price tanked? I can think of 2 reasons:

1. To a larger extend, drag down by the overall sentiments of the market. K-Reit released its strong interim results the same day the government increased DC to 70%. A case of bad timing.
2. To a lesser extend, some investors might be concern about the risk of funding its acquisition of ORQ; which shouldn’t be much of a worry. Kepland has indicated its intension to subscribe for K-Reit’s equity placement. Furthermore, as part of the acquisition agreement, Kepland is to provide income support for K-Reit. It has agreed to effect top-up payment to K-Reit amounting to 1/3 of the amount by which the net property incomes falls short of a guaranteed income amount of the calendar quarters from Oct 1 2007 to Dec 31 2011.
So you see, the risk exposure for K-Reit is as low as you can wish for.

Here are some points made by Goldman executive director Leslie Yee to Business Time Weekend:
1. GS reiterate our positive view on S’pore Reits and recommend investors to buy in the prevailing choppy markets.
2. S’pore Reits offer an upsides of 7-37%
3. Four attributes that make Reits ‘defensive’. These are: low gearing; income payout which is often 100%; secured leases; and limited development risk.

So what to do next week? I’ll leave you with this – US Commerce Department reported that New-home sales rose 2.8% in July.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

Goldman Sachs says FJ is cleared to trade

Goldmen Sachs maintains its Buy call on FJ Ben. Here is the details:

Goldman Sachs remains a BUY with target price $1.10
- FY2007 net profit of S$21.5mn was 9% ahead of our forecast, 2% ahead of Bloomberg consensus. The company also announced a proposed capital repayment of S$0.13/share and a cash dividend of S$0.02/share (less 18% tax). We estimate that the proposed capital repayment will enhance 2008E ROE to 22% (from current 14.8%). We see the recent sell-down as a buying opportunity and reiterate our Buy rating on the stock.

1) Capital repayment: This exercise is subject to EGM and High Court approval, and the company expects the repayment to be completed by 31 Dec 2007. Combined with the cash dividend of S$0.02/share (S$0.016 net of tax) targeted for payment on 30 Nov 2007, this offers a total yield of 19% for a 3-4 month holding period.

2) Strong earnings growth: FJB's earnings turnaround is on track, and our forecasts indicate 2 year FY2007-2009E core net profit CAGR of 47% driven by store expansions and also better operating margins as new stores mature.
- Our 12 month SOTP-based target price of S$1.10 is unchanged. We have made minor adjustments to our earnings forecasts post the results.

1) Earnings risk from an Asian economic slowdown, given the discretionary nature of FJB's fashion and timepiece products; 2) Franchise agreements could potentially be re-called by brand owners, but this is unlikely as brand owners focus on larger Asian markets like China.

The market appears to be at a recovery stage now. A bit cloudy, a bit unsure. This is the time to sort out value stocks at discount price. If I found anything great, I'll let you know in real time.
Have a good weekend.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

FJ Benjamin Posts Record Earning

FJ released its FY07 results today. Here are the highlights:

1. Net Profit more than doubles to $21.5M. (110% increase)

2. Directors propose return of 13c a share to shareholders through $74M Capital reduction. This is possible because of the group’s strong cash position!

3. Record Dividend of 3.5c per share for the Full Year. If approved, will be paid on 30 Nov to shareholders registered in the books on 15 Nov.

4. Earning per share (EPS) increased to 5.69c from 3.53c, an increase of 61%!

5. Net asset value per share rose to 37.88c in FY07 from 30,53 in FY06.

6. From CEO Nash Benjamin ‘We not only exceeded our financial objectives, we also extended our leadership in the fashion industry’

7. Looking forward, 47 stores are scheduled to open for the new financial year. Retail area will increase by 56% to 358,000sq ft in FY08.

Personally, I am very bullish about the company’s growth and future. With increase in tourism and strong economy growth, there is no reason not to accumulate its shares.
So, when is a good time to cash out the shares? At the present outlook, never; Unless there is a significant change in what the company is doing now, or a dramatic change to the management team.
If you have vested, Congrats! Thanks to the Sub-prime woe, the share price is really cheap. Barring any hiccup from US market tonight, the shares should continue from the 10% gain today.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

Don’t let Bernanke’s effort goes to waste!

I’ll cut to the chase; it’s time to Buy.

Key Points:
1. Fed cuts key interest rate. This shows that Bernanke is now more concern about the credit crisis than inflation, and Fed is willing to take steps to address the issue.
2. S’pore government forecast economy will grow by 8%.
3. Companies’ fundamental still solid. Large majority are reporting good results.
4. MM Lee in Tanjong Pagar National Day dinner said ‘Whatever the troubles, they will go away in weeks, if not months. What we’re absolutely sure of about east Asia is that it is set to grow.’

For those who have been loading up the arsenal, now is time to pull the trigger. I know it has been stressful the passed 2 weeks, I believe this correction is coming to an end. Hang on there and you will be rewarded for your cool logical mind. Remember, Buy Low, Sell High.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

Analysts say Buy BUY Buy

Today DBS Vickers Securities has issued a BUY call on China Fishery and SC Global. Here are the details:

China Fishery Group
Let's go fishing
BUY S$2.16 Price Target : 12-Month S$ 3.02 (Prev S$ 3.08)

Story: China Fishery (CFG) reported a good set of numbers for 2Q and 1H07. Topline for 2Q grew 233% to US$110.5m, aided by its newly added 3rd and 4th Vessel Operating Agreements (VOAs) in Jan and contribution from its Peruvian fishmeal operations. Net profit for 2Q grew 77% to US$20.2m.

Point: The Group's net profit at half time was an impressive 56% increase to US$51.6m, but was somewhat below our expectations. This is because our previous forecast assumed that the Group would change its 4th VOA to a prepayment term, similar to the previous three VOAs. At the current stage, this seems unlikely to materialise in 2007; and, we are now factoring in the daily charter expenses instead of an amortisation charge. In addition, we are also factoring in contribution from the redeployment of two elongated vessels in 2008 in the South Pacific Ocean. The net effect is that we adjust our net profit forecast down by 15% for FY07F and a 2% for FY08F.

Relevance: We remain positive on the Group's prospects, and believe it is well positioned to take advantage of the increasing global demand for fishery products, underpinned by limited fish resources and its increased size of operations. Maintain BUY, TP: S$3.02 based on 12x FY08F earnings.


SC Global Developments (SCGD SP)2Q07 results in line
S$5.55 BUY Price Target: S$ 7.80

Revenue declined 32% y-o-y to S$34.0m mainly due to lower progressive sales recognition of its residential projects. Contribution from its associate, AVJennings Limited, grew 66% y-o-y to S$2.9m. Net profit declined 35% y-o-y to S$5.3m. However, excluding the one-time gain of S$5.3m from the sale of an investment property at Mohammed Sultan Road in 2Q06, net profit would have increased approximately 89% y-o-y. A special interim dividend of 7cents (less 18% tax) was declared for the first time. It is intended that the approved Scrip Dividend Scheme would apply to such dividend and SC Global intends to utilise its balance Section 44A credits to frank the payment of the proposed dividends. A share split of every existing share into two ordinary shares is proposed and this is expected to enhance
the liquidity and affordability of its shares. With the expected increase in
market interest and activity in the shares, this would make it more attractive to a wider pool of investors.

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

China Fish - Record Profit in 2Q

China Fish today reported results for 2Q07 and 1H07, here are the highlights:

1. Revenue for 1H07 increased 184% to 232.4M. Revenue for 2Q07 increased 233% compare to 2Q06.

2. EPS for 1H07 increased 43% to 6.54 UScent. EPS for 2Q07 increased 64% compare to 2Q06.

3. Company proposes interim dividend of 3.29 Sin cents per share; this is a 51% increase compare to 1H06.

4. The Group acheived net profit after tax of U$50.6m in 1H07, which is already exceeds the full-year profit of U$48m acheived in FY2006.

5. MD Mr Ng Joo Siang "The Group has continue to deliver the anticipated revenue and earnings-accretive benefits of our recent expansion initiatives. Our new VOAs have delivered solid earnings contribution while the benefits from our investment in Peru accrue over the longer term".

6. With increasing demand and limited supply, China Fish is continually assessing new fishing grounds that can provide additional revenue for the Group. Using Peru as a base, plans to develop the Group's trawling operations in South Pacific Ocean are proceeding as planned.

For those who invested in China Fish, Congrats!

Disclaimer: All shares recommendations in this Blog are my personal opinion. Readers are encouraged to do their own research before investing. Remember, it’s your own money! I will not be liable for any losses incurred.

Bull makes money, Bear makes money, and Hog got slaughtered

By now, you should have heard enough of how badly hit the stock market is. I shall give you a break, and present to you the brighter side of the story.
As the mission statement of this Blog advocates – Buy Low, Sell High. This situation now actually gives you a chance to demonstrate this simple logic. The only problem is when is the low? Sad to say, I don’t know. But that doesn’t mean we should stay away from the market, because the bottom could be yesterday or tomorrow. Here are some ways to capitalize this ‘correction’:

1. Look for high growth company and only high growth company. They are the one with accelerate growth. I.e. Not only its profit and earning are growing, the rate of grow are increasing each quarter. Not all stocks move in tandem with its company, some stocks are broken, but the company remains strong.

2. Use a Top-down Pyramid investment strategy. I.e. if there is a good company that you like to invest, you can start by buying 1 lot. If the price falls by a few points, buy another 2 lots. If it falls yet again, buy 3.

3. Buy good company whose shares has just been upgraded by analyst, but somehow tanked due to the Bear. These are the one on a ‘catapult’, waiting to spring back.

4. Buy when every headlines read “Sell Sell Sell, Bear is here”. And the uncles in your Coffee shop swear not to touch shares anymore… All bottoms look like this.

For the past 2 weeks, my portfolio is down 10%. I’ve just started to accumulate slowly using the top down pyramid strategy, I believe this is not the cul-de-sac of the bull. Many companies are reporting good profit, and the government is still projecting good growth for the economy. I am not urging you to follow me, you have to check you financial status and your appetite for risk. Remember, Bull makes money, Bear makes money, and Hog got slaughtered.

Have been busy recently due to my new born and work. Next week, I should be able to share with you more on the High Growth companies.