Friday, 2 April 2021

My Portfolio Mac21

Summary for March 2021

Portfolio @ End of Mac21

In general, March 2021 is not a good month in stock market. My portfolio lost 7.1%, mainly due to the decline of my major holdings SCIB & Jaks.

Taking some profit from SCIB earlier in the month helps to reduce the percentage of loss.

I still hold quite a lot of SCIB shares. I believe the company can continue to grow in 2021 and hope that it can achieve its RM2bil market cap target by the end of this year.

Jaks just released a bad quarter result with a shocking RM103mil loss after tax and minority interest in its FY20Q4. Its loss before tax for the quarter is RM183.5mil.

However, there are reversal of disposal gain (RM85.3mil), impairment loss of goodwill (RM52mil) & receivables (RM23.6mil), share grant plan expenses (RM17.1mil) and loss on disposal of investment properties (RM5mil) in this quarter alone.

After deducting all those bigger items above, its actual loss before tax is just RM0.5mil in the quarter which is not too bad.

Jaks recorded a share of profit of RM7.568mil in its Vietnam power plant JV. It's derived from 37 days operation from only one of its two units of power generators. 

It's better than what I expect since it has not achieved "economy of scale" yet.

As its second unit achieved COD on 25th Jan 2021, I expect this JV to give a profit sharing of +/-RM30mil in FY21Q1.

Previous estimation of RM196mil annual profit contribution from Vietnam power plant to Jaks is still viable pending results of subsequent quarters.

The problem is, will those one-off losses become two-off and three-off?

Jaks has won the bid for 50MW in LSS4. However, market seems to punish those winners as there are concerns of lowish bidding price and temporary rise in project cost.

Most technology stocks take a breather in March after a strong run in Jan & Feb this year. 

All tech related stocks in my portfolio JHM, Krono, Smetric-WA & Uchitec suffer loss in March. 

I took the opportunity to add a bit more JHM's shares, since Kenanga Research portrays a very bright future on it.

Kenanga's FY2021 net profit forecast for JHM is RM49.8mil, which will be 40% higher than its previous high of RM35.3mil in FY2018.

Its net profit in FY2020 is just RM21.4mil. I'll be happy if its net profit can reach RM35mil this year.

Krono released a commendable quarter result in March but the announcement of private placement is no good news to its shareholders.

In the prospect of its latest quarter report, the management mentions that "we expect that 2021 full year revenue growth to be high end of healthy range."

Even though I don't know what "high end" and "healthy range" here mean, it certainly sounds good and I choose to keep its shares. 

In FY20Q3 quarter report prospect, the management expected revenue growth in Q4 and true enough, FY20Q4 registers historical high revenue.

Will the market still give tech stocks higher than usual PE in 2021 and beyond? Or will they go back to PE of 15-25? I don't know. Perhaps for high growth potential tech stocks, the PE will continue to stay high.

If the tech stocks frenzy cool down significantly, then my Uchitec will probably become "Uncle-tec" boring dividend stock.

Tecfast is the latest addition into my portfolio but it does not look like a good move, isn't it?

Even though there are some negatives and accusations surrounding Tecfast, there are a few reasons that affect my decision to buy its shares.

One of the reasons is that when I have more cash on hands, it's always easier for me to make a buy decision which might turn out to be right or wrong.

I chose to believe that the company is doing real business. After venturing into oil trading and bunkering, Tecfast becomes only the second listed company in such industry after Straits Inter Logistics.

In FY20 ended Dec20, Straits's oil bunkering segment posted a PBT of RM7.6mil from revenue of RM662mil, which means the PBT margin was only 1.15%.

In FY19 before the pandemic, its PBT margin was better at 2.22% base on PBT of RM14.69mil from revenue of RM659mil.

However, for CCK Petroleum which Tecfast acquired 35% stake, its PAT margin for 2019 & 2020 were 3.48% and 2.76% respectively.

Without the contribution of CCK and those 2 big contracts, Tecfast's new oil bunkering segment posted a net profit of RM13k out of RM4.017mil revenue in only one month (PAT margin 0.3%).

Straits is currently traded at 24sen per share. With its latest FY20 (ended Dec20) EPS of 0.48sen, it is traded at a PE ratio of 50x. 

Its share price has staged a rally in Mac21 from 17.5sen, probably due to the news that its 38% owned associate company Banle Energy is preparing for IPO in Hong Kong Stock Exchange.

MyNews is no doubt the best performer in my portfolio in Mac21. I'm not too happy because I haven't accumulate enough of its shares...

Anticipating a bad financial result announcement in Mac21, I expect its share price to stay weak before and drop panically after the quarter result so that I can get more cheaper shares.

It proves that I was so wrong. Market is so forward looking nowadays.

With the opening of CU stores yesterday, its share price jumps above RM1.

Supermax's share price consolidates above RM4 level in Mac21 but recently it seems like it might start another round of fall. I can only hold on to this "long term investment".

Time flies and one quarter of "recovery year of 2021" has passed. So far I manage to hang in there and hope for a good Q2 ahead.


  1. Stocks from several industries, especially technology industry, have "corrected" in month of March. I have also taken the opportunity to add some tech stocks.
    I think the prospect for tech stocks in year 2021 should still be bright. I just read that the current global shortage of chips problem is mainly due to the overwhelming demand and not because of supply disruption issue. And, the shortage may take more than a year to resolve. This shows the high demand of electronic products worldwide.
    In addition, Biden has just announced the US2+ billion infrastructure plan, which also included 5G infrastructure and semiconductor manufacturing in US. This plan would boost the sentiment for tech stocks.

  2. This comment has been removed by the author.

  3. As for Uchitec, management hinted in last quarterly report that they expect "a low single digit of revenue growth in year 2021". I suppose that means 1-5% revenue growth in 2021, which is small..
    Market has not given PE expansion to Uchitec so far. Its stock price has risen slightly after the good Q4 result announcement; the increment is mainly resulted from good financial result but not PE expansion. I also have some Uchi stocks, i plan to sell before the Q1'21 quarterly announcement because i expect its Q1 earnings will be so-so. Uchi is weaker in H1 seasonally. Uchi is a good company but i need fund to invest in higher growth company.

    1. Uchi's Q1 might be affected by Covid outbreak in its factory. Anyway, I still hope that its share price can reach 4.

  4. "I chose to believe that the company is doing real business. After venturing into oil trading and bunkering, Tecfast becomes only the second listed company in such industry after Straits Inter Logistics."

    I am also evaluating the trustworthiness of Techfast and its new management. The positives are the major shareholder of TGuan (who is trustworthy) is also one of the Techfast's directors, and after reading your article above, i got to know that CCK Petroleum has higher profit margin than Straits.

    1. One of the reasons I bought Tecfast is because of TGuan's director

  5. On glove sector, i read from UOB Kay Hian analyst report that the analyst expects the ASPs to peak in Q3 2021, and then the glove sector earnings are expected to normalize gradually over the next two years. In this time, the stock price of glove stocks has moderated 3 to 4 quarters ahead of their peak earnings which is against the previous trend which showed the stock price moderates in tandem with peak earnings.

    My speculation is the stock price of glove stocks may go up again when their earnings start to moderate after Q3 2021. This is again against the previous trend (since market is so forward-looking now). If their stock prices could moderate 3-4 quarters b4 the peak earnings, they can also recover when earnings moderate. Anyway, its just my wild speculative thought :p

    1. Stock market is full of surprise nowadays. While record breaking profits cause the share price to drop, decreasing profits might cause it to rise :)

  6. Correction : Biden's plan is US2+ trillion (not billion)