Stock watch list Mar 08

It seems we are going to stay in the bear market for quite a while. There is really no reason to buy hastily, given that more bad news might be in the pipeline. Having said that, I would think at the current valuation, all are cheap. So, would use the index as a guide for the buying. Once index drop around 2700-2800 range, might buy some to keep. After that, pray for the next 3 years. Because the business environment change so fast. Today's hot sector might lose money in the next 6 months.

Counters in my watch list remained pretty the same.

Hongguo
China Hongxing
MIDAS
Sino Env
Guangzhao IFB
Swiber
FJ Benjamin

Synear temporary drop out of the list until the business is showing improvement. Sino techfibre is removed on oil price concern and weak apetitite towards fibre stock.

Tempted to add Ezra into the list, as it has fallen to quite attractive price. But, I have to spend sometime to think about it. China New Town has been beaten down so badly, which is attractive on the future outlook.

Asia stock market big drop

Ugly. When I open up the watch list, it is all red and double digit loss (paper loss).

Investors are nervous, and this is how fear start to spread. My friend is sitting on 50k paper loss and we heard of 100k of loss. Too bad, if you can't sleep well base on this, and I can't think of anyway that could help.

Basically, the discussion now is the fearful consequence of US recession. Although, it become really real this time, we have no way to tell whether it would materialise. So, for the risk adverse, stop. Continue to hold on and don't get tempted to buy again.

For the brave, continue to selectively buy those attractive priced counter. However, bear in mind that there is a wide spread fear and pessimism, which even recession won't come, the market has capacity to fall further.

Some highlights on my watch list. Some are my continuous favourite. Only time would tell whether our judgement is wise or foolish.

Stock watch list Oct 07

I think it is time to review the stock watch list I have. Keep this list updated and handy, when correction comes, we know what to buy.

Offshore/marine/oil
BH Global - Outlook remains bright
Hiap Seng - Due to fund manager sell down, it is trading at attractive price
Swiber - Management is doing all the good jobs to keep growth momentum
*Tiong Woon - Recent result is fantastic. Management has put in many growth driver.

Properties and hotel
Guthrie GTS - Very often, undervalued play would remain undervalued for a very long time. Patient is required and wait for the catalyst

China
Ching Hongxing - Growth plan on track
MIDAS - Despite one of the promising JV is out, China railway industry outlook remains robust
Sino Env - Poses unique technology. Potential attracting QDII fund
*Hongguo - Slow and steady. I feel this might be the safer counter to own.
*Synear - One of the leader in China food industry. QDII fund might have strong interest
*Sihuan - China pharma play. Analyst projected a strong growth.

Big/Mid Cap
Guoco Land - Good to keep for long term

High risk
Guangzhao IFB - Tree starts keep chopping down start of next year, cash flow would improve

Others
FJ Benjamin - Singapore retail and trourist outlook remain bright

* - New addition

Company update Sep 22

For the past week, stocks under my radar released some news. Here are some analysts' view on them. Generally, the companies are on track for future growth, and we should stay vested.

Due to Rotary venturing into LNG in China. OCBC research is upgrading the fair value.

Upped fair value. We are optimistic of Rotary's pursuit in the LNG business in China. As the first transportation route will only be operational from November, we do not expect this to have much impact on its FY07 results. However, we expect this business to contribute 9% to our FY08 estimates. We are keeping our forecasts of S$46.7m in FY07, but revising up FY08 to S$54.5m. Based on 18x PER FY07/08 blended earnings, we are raising our fair value estimate to S$1.60. Maintain BUY.

DBS has reiterated a buy on Swiber citing

Revenue visibility for Swiber is high. Our offshore EPCIC revenue projection in FY07 is now fully backed by orders on hand, as compared to 94% previously. Our FY08 offshore EPCIC revenue projection is 30% backed by secured orders. Swiber’s orderbook now stands at US$230.7m.

Kim Eng initiated coverage on Orchard Parade Holding with a Buy

We think that OPH offers a rare dual exposure to hospitality and F&B. With
tourism in Singapore set to grow further and YHS being a household brand
name, we think that OPH is an enticing value proposition. We are initiating
coverage with a price target of $3.31, based on parity to RNAV.

CIMB-GK reviewed again the call on FJ Benjamin

Maintain Outperform. Following our earnings adjustments, we have lowered our
target price from S$1.29 to S$1.17, still based on sum-of-the-parts valuation. Our
new target continues to value its retail/entertainment business at 16x CY08 P/E and
takes into account potential capital distribution from the sale of investment
properties and warrant conversion.

DMG maintains the view on FJ Benjamin

FJB announced the listing of its associate, St. James Power Station through a reverse
takeover. The RTO is targeted for completion by 1Q 2008. FJB’s 30.4% stake is valued
between S$24.3m – S$32.8m, depending on the financial performance of St. James. Post
listing, FJB’s stake will be reduced to 25.2% with potential for further dilution upon a
subsequent placement. Maintain BUY with price target of S$1.03.

I always believe if you buy a good company and hold for long term, you would be rewarded.

Tale of China consumer

When I started investing back in 2003, that was the time when more China companies came to Singapore to list. Fast forward to now, SGX already has many China companies. Although these companies are mainly mid and small cap, they do offer investor in Singapore way to diversify and participate in China growth story. We can observe that for the past few years, China has became part of our life. Goods were "made in China", companies all trying to expand into China, newspaper also dedicated a section for China news.

The China story is unlikely to subdue anytime soon. A big population couple with rising middle class, it offers a unique opportunity for investor everywhere to profit from there. There are many reports and news which shows us the potential of it. You can do a search for this. >> Search I seriously believe the story and thinks that it is a multi year growth story which looks like a straight line.

If we firmly believe in the China consumer power, what are the companies on SGX that we can depends on? Following is a list of China consumer stock which has strong brand equity, good track record to ride on this trend. Analyst forecast is taken into account for the growth projection. Valuation is not being discussed, as the market fluctuation would present good entry opportunity and you should already have in mind your entry price.

Hongguo

• China no 3 ladies shoe maker. As you might know, ladies change many pair of shoes a year, it is a big business. For the past 3 years, they have been growing at more than 20% a year. A sound management with good track record. Going forward, the opening of more stores and joint venture would continue to drive the earning.
• UBS forecast EPS for FY07 to be RMB0.28, that would be about SGD0.056. In my opinion, the growth rate would be stable at 20% above
  

China Hongxing

• China sport shoe maker which has been growing more than 50% a year for the past few years. The share price has been multiplied for a few times already. Recent result shows strong growth and margin expansion. Aggressive new store opening, upcoming Beijing Olympic games which drive sports goods demand and higher selling price should see higher earning forward.
• CIMB-GK forecast earnings CAGR of 50% for FY07-09. Forecast FY07 EPS SGD0.037.

Synear food

• China food company selling freeze products and dumpling. Gross profit margin about 30% with aggressive capacity expansion plan and strong brand. Despite rising raw material price, the company is able to raise price to compensate for that. The company is riding on the growing per-capita consumption of frozen processed food in China.
• CLSA forecast 2006 to 2011 five-year EPS CAGR to grow at 20%

Hsu Fu Chi

• Manufacturer and distributor of confectionery products – namely, candies, cake and cookies and sachima. The Group is a leading player in China’s candy industry; according to Euromonitor, it has a sugar confectionery market share of about 4.1% in 2005. A stable business with strong and popular brand - “Hsu Fu Chi”
• DBS project that the Group’s EPS will grow by about 13% and 16% in 08F and 09F, respectively.
  

China Lifestyle

• China jelly dessert maker which owns the Labixiaoxin brand (second in China jelly market). With capacity expansion, new joint venture with Super Coffeemix and Malaysia Cocoaland and expansion of distribution point, it should drive the growth in coming years.
  
• DBS project earnings CAGR of 25% over FY06 – FY09F on the back of the doubling of capacity by FY08F.

Stock watch list

Now, the Great Stock Sale has arrived. The key thing is to identify the stock which offer best potential in coming years. These are all under my consideration. Once the storm is over and depends on news development, it could just start moving.

Offshore and marine
BH Global - Lighting contractor for rig and vessel. The more vessel they build, more business they get.
Hiap Seng - Niche contractor for mechanical work and gas compressor.
KS Energy - Energy giant in the making
Swiber - Offer EPC services for offshore and marine sector

Properties and hotel
Guthrie GTS - Undervalued property play
Hotel GrandCentral - Bright outlook as room rate is very high now

China
Ching Hongxing - Sports shoe maker who is growing 40%-50% a year
MIDAS - Supplies the aluminium material to build China railway infrastructure
Sino Env - Cleaning up the China polluted environment
China Lifestyle - Undervalued consumer play, which earning could accelerate in coming FY

Big/Mid Cap
Ascott Group - One of the top service resident player in the world
Guoco Land - Property development in Singapore and China. Could package asset into REIT and unlock share holder's value

High risk
CEnersave - Emerging bio mass energy player.
Guangzhao IFB - Owns lots of fast growing tree which is due to harvest in FY08

Others
FJ Benjamin - Local retail player. The upcoming tourism boom and successful RAOUL brand could drive earning in the future
Hongwei - Undervalued fiber player with low valuation and high capacity expansion

Tag: singapore stock sgx stock offshore marine