Wednesday 4 August 2021

My Portfolio Jul21


Summary For July 2021

Stock Portfolio @ End of Jul21

It's another lackluster month for Bursa Malaysia in which the KLCI fell 2.5% in July and went below 1,500 points.

Most of the stocks in my portfolio fell in the month of July but it still managed to register positive gain of 4.2% thanks to SCIB and JHM.

I have sold all my SCIB shares & SCIB-WB when their share price surged in early and then mid July.

Despite the heavy slump in its share price in recent months, my investment in SCIB still gives me a very good return of 185%.

I won't rule out reinvesting in both SCIB & KPower if the outcome of the Serba Dinamik saga is favourable to both companies.

It seems like tech stocks do well in general in this month, and this positive trend might continue for a longer period of time.

The quarterly results of all the tech companies who released their results in July are very impressive, including Vitrox, MI, Unisem, Genetec, Frontken and Aemulus, with only Gtronic not quite up to expectation.

Looking at Genetec's share price at above RM23 now, I can only shake my head in disbelief. Anyway, if I didn't sell earlier at RM4.20, I don't think I can hold its shares until above RM10.

I have 4 tech related stocks in my portfolio which are JHM, Uchitec, Krono & Smetric-WA. Unfortunately all are not those types of "red hot" tech stocks.

JHM & Uchitec's future looks more promising compared to Krono & Smetric. That's why I'm still hesitating to add more shares of the latter two.

It's almost the same feeling as when I bought Genetec last year. Genetec was also not a "great" or "solid" company and thus I didn't hold a lot of its shares.

However, once its time comes, it might give extraordinary return.

I'm hoping for a positive development to push up the share price of Krono & Smetric significantly.

Since May when tech stocks were suffering, I have a plan to invest in a more "well-established" tech stock.

My eyes were mainly on Unisem, MI & Gtronic who seemed to suffer the most but I think all of them still have great potential. I set a target entry price of below RM6, RM3 & RM2 for them respectively.

However, MI and Gtronic came close but did not break below these prices so I'll have to wait. 

I don't think I still have a chance to buy MI though, as its share price is already at RM4.25 now.

I have also set target entry price for a few other stocks and one of them hit it and that's DKSH.

DKSH fell below my target entry price of RM3 and I decided to invest in this company for the second time at RM2.96. It's before its 10sen dividend being ex-ed.

I think DKSH benefits from the pandemic and its earning might be able to sustain after the pandemic.

I hope the management will take current pandemic opportunity to re-strategize its Famous Amos business so that it can stop the bleeding in this segment soon.

I predict an EPS of 40sen for its FY21 with a dividend of 12sen, which will translate into a decent dividend yield of 4% at RM3.

The share price of Hibiscus who is a direct beneficiary of recovering crude oil price, surprisingly did not perform well despite Brent oil stays above USD70.

Its share price of 63sen now is at the level before the announcement of the acquisition of Repsol's producing assets in Malaysia & Vietnam.

It's also well below the pre-pandemic share price of around RM1.00.

Those new assets acquired at USD212.5mil (RM879.5mil) are expected to at least double the original production rate of Hibiscus.

Based on the management's estimate, EBIDTA contribution of USD135mil (RM558.8mil) is expected in calendar year 2022. It is based on average Brent oil price of USD60/barrel.

For comparison, Hibiscus's EBIDTA for 9 months from Jul20 to Mac21 is RM250.9mil.

Last year, Hibiscus proposed issuance of up to 2 billion CRPS to raise RM2bil for the acquisition of quality producing assets.

So far Hibiscus has issued 424mil CRPS and successfully raised RM203.6mi. This amount is considered adequate for the acquisition of Repsol's assets.

Thus it's unlikely to issue more CRPS unless there is other acquisition. This is a very good news to its shareholders indeed.

The number of Hibiscus ordinary shares increase by 26.7% from 1.588 billion to 2.012 billion after the conversion of all CRPS. Its profit is expected to double after the acquisition.

Now it's already August which is the "quarter reports month". All the stocks in my portfolio should release their results this month except Krono, myNews & Scientex.

Q2 of calendar year 2021 was affected by worsening Covid-19 situation and movement restriction. The operation of many companies might have been negatively affected by positive Covid-19 cases & lower utilization rate.

With current number of cases daily, it's almost impossible for any factory to be free of Covid-19 cases.

However, I'm pretty confident that Maybulk, Hibiscus & MFCB can achieve higher net profit QoQ.

For the rest, even though they might not achieve QoQ improvement, I hope they don't deliver very bad quarterly results.

Today, Malaysia's Covid-19 new cases breaks record high with 19,819 cases. It's not surprising to me as I already predicted that we can reach 20,000 soon.

The more worrying part is that the number of death cases has reached 257 in a day.

I expect that Covid-19 infection will be like common cold soon in which we don't need to care about the numbers but the emergence of delta variant just makes things complicated.

Furthermore, now we even have delta plus variant coming up!

Vaccination is our only hope but is it really enough? Let's pray that it is...


  1. DKSH - "I predict an EPS of 40sen for its FY21"

    I owned DKSH years ago and I took a re-look after knowing you bought it in July. I found the followings :
    i) Its revenue has been growing from FY16 to FY19. In FY20, if not impacted by pandemic, its revenue could have increased YoY. In short, DKSH able to achieve consistent revenue growth.
    ii) However, its reported PATAMI in past 5 years (FY16-FY20) didn't show consistent growth.
    iii) The earnings/EPS in last 2 quarters, i.e. Q4'20 & Q1'21, have been encouraging. If this level of earnings can sustain, your 40sen EPS per annum forecast is achievable.

    I also noticed its operational expenses % managed to sustain at <99% throughout FY20, and achieved <98% in Q1FY21. I suppose this is due to the operational efficiency improvement projects implemented in end 2019.
    Management explained the acquisition of Auric Pacific in 2019 has also contributed to higher earnings.
    The analyst gives 11x PE multiple to DKSH. Thus, if DKSH can achieve 40sen EPS in FY21, the fair value would be RM4.40 per share. The upside from RM2.90 now will be RM1.50 per share or 51%, which is attractive.

    My doubt is can the last 2 good quarters' earnings sustainable throughout Q2-Q4 FY21?
    Can I know why u think DSKH can achieve 40sen EPS in FY21?

    1. The 40sen EPS is based on increasing revenue and improved efficiency after the improvement project. The write-off and write-down items of the past 2 quarters also seem more than usual which I hope will "normalize" in the future.

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  3. "I won't rule out reinvesting in both SCIB & KPower if the outcome of the Serba Dinamik saga is favourable to both companies."

    I somehow "feel" that the independent audit result will be favorable to Serbadk, and the new external auditor will be able to complete the new fiscal year audit report by Oct'21. One of the reasons is Karim acquired 10mil unit Serbadk stocks on 14th July; he does not need to do that if he has no confidence on audit results, especially after being force-sell some of his Serbadk stocks back in Jun'21. More importantly, many of the KPMG's audit findings were really trivial and should not blow up to such alarming level.

    Anyway, this is just my speculation based on info I can gather; I could be wrong. But, since I have taken my stand, I also have placed my bet accordingly. I do not deny that I am a high risk taker, I hope my investment character won't bring me disaster..:p

    1. Ya, I also feel the same. I'll look for a good entry price.

  4. "The share price of Hibiscus who is a direct beneficiary of recovering crude oil price, surprisingly did not perform well despite Brent oil stays above USD70."

    This Hibiscus is also a disappointment to me. Other O&G stocks also performed poorly in recent months. When oil price rose, their stock price did rise too but the magnitude is small. When oil price fell, their stock price fell back even more...I think O&G stocks are not "in fashion" now. Hope this trend will change in coming months.

    1. It seems like O&G is considered as a sunset industry now.

  5. i actually entered into Kpower recently, for simple reasons. The share price does not reflects the current earnings experienced. With 4c eps per quarter, thats 16c annually.. current market forward projected it at 4-5x only.. We are talking about an industry that has very bright prospects as investors world wide gets more ESG centric.. Once serba's case is cast off, it will regain its value

    1. Even though KPower might not achieve EPS above 4sen every quarters, yes I agree that it's undervalued now. LSS4 EPCCs will be awarded next year and it might have chance to secure some.