Friday, 3 December 2021

My Portfolio Nov21


Summary For November 2021

Portfolio @ End of Nov21

In November my portfolio suffered 12.6% loss which matched previous heaviest monthly loss in Oct18, apart from a 21.7% Covid-driven slump in Mac20.

The share prices of all 17 stocks dropped in this month. Even in Mac20 rout there was still one stock in my portfolio that stood tall and did not drop, which was Daya at 0.5sen per share. Haha.

KLCI dropped non-stop all the way from 1,600 points in mid October to settle at 1,514 points at the end of November.

The sentiment in Malaysia's stock market started to turn sour after the announcement of Budget 2022.

The drastic drop came in the final few days of November when new variant of Covid-19 Omicron emerged as a "Variant of Concern".

Brent oil price dived USD10 or 12% from USD82 to USD72 in just one day.

Normally I won't sell shares during bad market days and I actually bought some.

It turned out to be a bad decision in which I bought too early and suffered more losses. Gtronic, Hibiscus, Maybulk & Krono all dropped around 10% after I bought their shares.

Gtronic's share price dropped 10sen to below RM2 on its dividend ex-date on 17 Nov21. I thought it was an opportunity so I grabbed some.

From there it dropped non-stop all the way to RM1.60, down more than 20% in just 9 trading days.

The other stock with such pattern of drop was ATAIMS. When the news of ATAIMS's Dyson contract termination came out later, it made me hesitant to average down on Gtronic.

Gtronic is not without foreign workers and it also has a quite important major customer from Europe.

I still don't know what's wrong with Gtronic. I predict that its FY21Q4 result should be good.

There were many companies in my portfolio releasing their quarter results and I'd say there were no major negative surprise.

Nevertheless, Hibiscus did give a minor negative surprise as its FY22Q1 revenue and PATAMI were down 2.5% and 16% respectively QoQ, despite a small rise in crude oil price in this period of time.

In North Sabah, 565k barrels of crude oil were sold at average USD75 per barrel compared to 608k barrels at USD72 in immediate preceding quarter.

In Anasuria, 192k barrels were sold at average USD76 compared to 255k barrels at USD62.6 in immediate preceding quarter.

The lower output in Sabah was caused by planned maintenance and also restriction in movement, while there was a malfunction of a critical component at Anasuria FSPO which has reduced its output.

Unfortunately the Anasuria issue was only targeted to be solved in the third quarter of calendar year 2022. Its output is estimated to stay around 200k barrels per quarter until the issue is fixed.

Hibiscus's share price fell 19% after the release of its quarter report from 92.5sen to 75sen in the end of November. 

I'm still waiting for the completion of Repsol assets acquisition which should at least double its top and bottom lines.

The acquisition will give Hibiscus a more balanced portfolio as almost 50% of new assets is gas which is a cleaner source of energy.

How will the market react to it? Or its share price will just float up and down following crude oil price?

Recently oil consuming countries led by the US work together to lower crude oil price by releasing their oil reserves. The response from OPEC+ remains to be seen.

As I'm invested in Hibiscus, surely I hope that Brent could stay above USD70 at least.

JHM's FY21Q3 result was not very good but it was widely expected due to prolonged movement restriction in Kedah state.

Its facilities have operated in full capacity since mid September and there was no order cancellation by customers according to analyst.

It should be able to deliver a much improved quarter result in FY21Q4.

The result of LeonFB was a positive surprise as it still manage to achieve record high revenue and net profit in a quarter.

Its trailing 12-months (TTM) EPS is 38.6sen. At share price of 81sen now, it's trading at actual PE of just 2.1x.

Generally steel price has gone down from its peak that's why the share price of all steel stocks headed south irrespective of how good their profits were.

It looks like the only thing that can raise the steel stocks share prices is a rebound in steel price.

Coastal reported a rather good quarter result even though contribution from "other income" was still significant.

Its onshore gas sweetening business in Mexico has been included in its chartering division and has started to contribute for around one month.

It will contribute a full quarter in next quarter but I think it won't be too much.

I did not sell all my Coastal's shares because I'm waiting for it to start building and selling OSVs again. It hasn't sold a single OSV for one and a half year!

The profit from selling OSVs which used to be its bread and butter, should be able to cover the "loss" of "other income" in the future.

Maybulk delivered a super profit of RM113.5mil in FY21Q3 as expected due to the sales of two Supramax vessels.

It has sold one Handysize in previous quarter, thus there are only 5 vessels remaining at the moment (3 Kamsarmax, 1 Supramax & 1 Handysize).

Without the exceptional gain, it should be able to record RM20mil net profit per quarter (EPS 2sen per quarter).

Even though BDI has fallen more than 50% from 5,600 points to 2,500 points in one month's time, its current level of 3,000 points is still the highest in a decade.

BDI was only at average of 1,000 points for 10 years from year 2011 to 2020.

After selling 3 vessels, Maybulk has turned net cash in this quarter after being debt-ridden for so many years.

While it was loss-making every year without fail together with high debts during year 2014-2018 when BDI was around 1,000 points, its share price could still be traded around 80-90sen. 

Now while it's making consistent profit and has plenty of net cash in a higher BDI environment, its share price is trading at 50-60sen.

The result of Jaks is satisfactory. The contribution from the power plant in current quarter increased 16% to RM43.4mil from RM37.5mil in preceding quarter.

If it can maintain RM43.4mil per quarter, annual profit will be RM174mil which is not far away from previous prediction of RM196mil.

Appreciation of USD against MYR will certainly help to improve its profit.

However, the losses in its construction and property investment segment dragged down its profit.

The location of its Evolve Mall looks strategic as it is located just adjacent to Ara Damansara LRT station and the 15-acre Perla Ara Damansara mixed development by Prasarana.

Even though it looks near on the map, there seems to be no direct access from the LRT station to Evolve Mall and the walking distance is quite far.

I hope Jaks will quickly sell its investment properties even at a loss, and use the cash to buy another 10% stake in the power plant.

Its cash flow might be tight until it receives meaningful dividend contribution from its power plant joint venture.

I think it should be able to receive the cash in 2022. 

Rhonema's FY21Q3 revenue of RM43.8mil was its record high while PATAMI of RM3.16mil was its highest in the last 13 quarters.

If not because of inventories written off/down & impairment/forex loss of RM1.2mil, it should be able to achieve record high PATAMI since listed in Dec 2016.

The main catalyst of Rhonema is its dairy farms venture and it will take time.

Master produced a commendable FY21Q3 result despite the lockdown and higher raw material price, especially when compared to its peers such as Muda, Orna and Boxpak.

Its TTM EPS is 28sen. At current share price of RM1.68, it's just trading at actual PE of 6x. 

It's very common now for stocks with stable and stagnant profit to trade at low PE ratio.

MFCB posted a 0.7% QoQ drop in PATAMI as expected due to longer period of annual scheduled Don Sahong dam maintenance in FY21Q3. 

The 75%-owned Stenta Films started to contribute 2 months in this quarter, resulting in a 111% increase in revenue and 439% increase in PBT compared QoQ in its packaging division.

However, the actual amount of RM7.5mil PBT in packaging segment is insignificant if compared to RM98mil PBT from renewable energy segment.

It's still better than none though.

The management has decided to proceed with the planned construction of a new packaging factory on recently acquired 10.4 acre land in 2022.

Besides, the acquisition of loss-making oleochemical business has been completed on 1 Nov21. So it will contribute 2 months of loss to the group in the final quarter of FY21.

Anyway I'm still hopeful that MFCB can break earning record in FY21Q4, mainly because of positive prospect in its resources division which should see higher export sales and improved margin in the final quarter.

The construction of the 5th turbine of Don Sahong dam is expected to commence in Dec21 and is only expected to be completed in Q3 of 2024.

It takes almost 3 years to construct one turbine which is much longer than I thought. I thought it could be done in one year.

For all first 3 quarters of FY21, Uchitec has achieved its best ever Q1, Q2 and Q3 in the history in term of both revenue and net profit.

Latest FY21Q3's revenue and net profit of RM44.4mil and RM24.5mil respectively is its second highest ever achieved.

However, Q4 will be a mountain to climb if it were to beat FY20Q4's revenue and net profit of RM53.5mil and RM32.3mil. 

It has proposed 9sen as first interim dividend for FY21, higher than 7.5sen in the corresponding period last year. The ex-date should be in the final week of year 2021.

I predict that it should be able to post 21sen EPS for FY21, and distribute 20sen as dividend. This will bring the dividend yield to 6.5% at current share price of RM3.09.

Its TTM EPS is 21.3sen, that means this tech-related stock is only traded at PE of 14.5x.

Smetric's latest FY21Q3 was an improvement QoQ and it's good to see the revenue went back to above RM7mil a quarter.

Even with its CENTAGATE Cloud and SigningCloud, the management seems yet to find a breakthrough in its business.

Movement restriction was given as a reason for its sluggish sales and I hope that it's true.

I'm not sure whether its products and services are outdated or non competitive or not.

As it still has a decent balance sheet and cybersecurity is something in trend, I'll continue to wait for it to deliver.

Fast and Supermax are the worst performing stocks in my portfolio with loss of 75% each. It's like a reborn of two Daya.

Supermax did not affect my portfolio too much as it does not carry too much weight but it's not the case for Fast.

Supermax's latest FY22Q1's EPS was 24.6sen but it's on a downtrend. 

The emergence of Covid-19 Omicron variant briefly pushed up its share price recently. We may find out in a few weeks time whether this variant is more deadly or whether current vaccines work against it.

As for Fast, its right issue has been ex-ed on 17 Nov21. Frankly, I didn't expect its share price to drop to its rights issue price of 12sen before ex-ed.

There was not much adjustment to its share price after ex-date, it was only adjusted lower by 0.5sen from 12.5sen to 12.0sen. 

No one wanted its rights (OR) even at the lowest 0.5sen and I couldn't sell my rights on the market. 

I've decided not to put more money into Fast and I guess it won't get a high subscription rate.

Perhaps I should have sold all the shares at 12sen on ex-date and then subscribe to the rights shares at 12sen to get some free warrants.

Anyway, its latest FY21Q3 result was not too bad with net loss of RM2.75mil. If not because of a one-off impairment loss of RM3.1mil, it should be able to post a small net profit.

So far its oil bunkering business has raked in revenue of RM118mil in about 6 months but the net profit is just RM0.54mil.

The main concern of the market now is no doubt the Omicron. 

The worst scenario is that the Omicron is confirmed to spread much more easily, causes more deadly infection and resistant to current vaccines.

The best scenario is that Omicron is a strain which could end the pandemic with high infectivity but much lesser seriousness just like common cold.

Both scenarios will send the stock market up or down in a big way.

Before scientists find a clearer answer, I think the stock market will remain volatile and cautious.

Today Malaysia has just confirmed its first case of Omicron detected from a student from South Africa on 20 Nov21.

Sooner or later Omicron will be prevalent in every country just like Delta variant. It's impossible to defend against its spread worldwide.

You can only choose whether you want to get it sooner, or later.

It's just like in mid 2020 when Malaysia recorded single digit new cases per day, we thought that we were doing great, only to see new cases kept growing until it reached over 20,000 per day one year later.

As I have already used (or wasted) some of my bullets earlier, I have to be more cautious when trying to collect cheaper shares.


  1. "Gtronic is not without foreign workers and it also has a quite important major customer from Europe. I still don't know what's wrong with Gtronic."

    I also suffered great loss in Nov'21.
    I also bought Gtronics lately. I think the recent drop was due to there was rumour saying Apple was to cut the smartphone production resulted from lower demand. This rumour was shown not true in the news today. Inari also dropped a lot due to this news.
    But of course the drop was also contributed by the Omicron variant, which is still a threat now.
    Gtronics' production is not as labour intensive as ATAIMS as the latter has a final assembly process (assemble Dyson's vacuum, fan etc) which requires a lot of manual works. Thus, I don't think and hope Gtronics won't suffer the same fate as ATA.

    1. The news of Apple chip shortage & production cut came out in mid Oct, but Gtronic's share price only dropped in mid Nov. It might contribute to but not directly causing the drastic drop for so many days in a row. Hopefully there's nothing bad.

  2. "I hope Jaks will quickly sell its investment properties even at a loss, and use the cash to buy another 10% stake in the power plant."

    Jaks' closing price yesterday at 37sen is ridiculously low. I did add a bit lately but I cannot add much bcos its weightage in my portfolio is already over-weight..
    I think Jaks management is not really capable. Their previous efforts in property development/investment and local construction were all screw-up. The saving grace came from Vietnam PP project which was also largely contributed by their Chinese partner.
    I also hope they can dispose the Evolve mall. From the way I see, their "capability" in mall management will not turnaround this mall operation. I suppose their problem is cannot find a buyer..
    Jaks is to commence LSS4 project in 2022. I hope they can execute well and prove me wrong.

    1. Ya, not a good management. I haven't been to Evolve Mall but the design is weird looking from Google map. I think this mall has already failed from its designing stage. For the LSS4, I'm not sure whether it will carry out the EPCC job by itself, any idea?

    2. I am not certain if Jaks will carry out all the EPCC works by itself, or outsource the EPCC works "partially" or "fully" and play only the role of assets owner. In all the articles and analyst reports that I read through, this is not specifically clarified.
      But, from the way Jaks mentioned about LSS4, it doesn't sound like Jaks will outsource the EPCC works "fully". Jaks has setup Jaks Solar Power Sdn Bhd to handle solar power project, and its future business plan is to grow in RE industry which include solar power and hydro power plant development. Thus, I believe they would want to build up their own capability in solar and hydro power EPCC works. Besides, Jaks is categorized as a construction company, I believe they have the ability to do the EPCC works (at least partially) by themselves.
      Well, if they outsource the EPCC works to Samaiden or Solarvest, it may not be a bad thing bcos, as I said, I have not much confidence on Jaks' construction works.

  3. MFCB - "The construction of the 5th turbine of Don Sahong dam is expected to commence in Dec21 and is only expected to be completed in Q3 of 2024."

    I bought MFCB lately. It has been in my watch list, and I was waiting for the construction of the 5th turbine to commence to buy. Its operating cash inflow is huge in each and every last several quarters. I believe the management will be able to find good investment with the cash inflow to grow the company. It is a stock that I can sleep well regardless what Covid-variant will come out. I think I need to have such stock in my portfolio, rather than many high-volatility stocks which i am owning now.

    1. Ya, not much worry on this stock's share price, just keep in fridge and check again after 3 years, should be slow and steady :)

  4. Recently, I started to study in-depth on some very high PE technology stocks such as Greatech, JFTech, UWC and etc. I didn't do so previously bcos I do not want to spend too much time on the stocks that I don't think I would buy.
    To my astonishment, I found they are really have very bombastic growth prospect. And, it is close to certain that their revenue and profit will grow in quarters to come. The only question is grow by how much and if the growth justifies the very high PE multiple.

    I observed most of their stock prices came down from the peak in Feb'21, recovered from the bottom, and have been consolidating. I suppose when their forecasted earnings deliver in quarters to come, and provided no unforeseen circumstances, their stock price will move up to another level. Their growth seems like a multi-years type and consistent.
    I am thinking maybe I should change my view on very high PE tech stocks, and pick up a little bit during this Omicron-crisis opportunity and keep them for long term..

    1. Semicon might have another 1-2 good years ahead. If no unforeseen circumstances, those company's profits will surely grow due to expansion. However, their share prices might not grow as fast as their future profits since they have already overshot the actual profit growth, unless the growth in future profit is better than expected. The risk is once the growth is not up to expectation, share price might suffer since it's at high PE valuation.

      Anyway I think JFTech has the benefit of a small base. It might explode if the investment in China bear fruits. I expect another good year for tech stocks in 2022, if I haven't bought Gtronic, I should have grabbed some Unisem shares by now..

    2. Yeah, I also expect tech stocks to have another one or two good years. I got to know from HLInvest report that, "There are a total of 29 fabs (China x8, Taiwan x8, Americas x6, SEA x4, and others x3) start construction in 2021/22, and their total equipment spending will surpass USD140 billion over the next few years." The global chip shortage persists, and automotive IC is selling like hot cakes. The solar panel and EV battery plants are expanding, and etc.

    3. If u like Unisem, u can take a look at MPI too. I personally prefer MPI bcos of two reasons; one is MPI's capacity expansion plan will realize sooner :
      MPI expansion schedule :
      i) Q3 CY21 - 2nd phase level 2 expansion in Carsen Suzhou. To add 50k sqft (+8% floor space). Completed in Sept'21.
      ii) Q2 CY22 - to add 121K sqft (+11% floor space) in Carsem Ipoh. Expect to complete by Q2 CY22.
      iii) Q4 CY22 - to set up another facility in China to cater for the growth in silicon carbide related products.

      Unisem expansion schedule :
      Q4 CY22 - Unisem is constructing 2 new plants in Ipoh and Chengdu China. The ready date for both the new plants are expected to be in Q4 2022. Unisem will then need 2 to 3 years to fill the additional capacity.

      The second reason is MPI's move to produce SiC and GaN power products with applications in EVs, and etc. It is to benefit from the expected strong growth in the EV space. The SiC and GaN is considered as "3rd generation semiconductor", which is in rising demand right now.

    4. MPI "look" much more expensive then Unisem bcos of its price level. But, both stocks' PE are actually quite close, which is ~30+x.

    5. What Unisem attracts me is its Chengdu expansion which is reported to be double its current size. I'm not aware of its Ipoh new plant, may I know where do you get the info from?

      Kenanga reported that its Ipoh operation made RM5mil net loss in Q3. That means its China op actually made a lot! I guess Q4 should break its record revenue and PBT due to the backlog in Q3 and robust demand.

      Before this I just went thru MPI's quarter reports and not much info there. After reading the info you gave here, it sounds very interesting indeed, esp with the SiC and GaN things. Have you invested in MPI? Or any other with better prospect? :)

    6. The info for Unisem can be found in Busy Weekly (vol.638) published on 19th June 2021.

      Yes, I have invested a little bit in MPI, Greatech, JFTech and UWC. The portion I own is really "a little bit" each. I am still in the progress of screening through high/very high PE tech stocks with good prospect; I am coming to the end.
      My plan is to buy those stocks in small portion each. The reason is, as u also mentioned, their stock price may drop drastically if the performance disappoints the market. Thus, I invest a little bit in each of them to dilute the high risk. The total amount invested in all those very high PE tech stocks may eventually equivalent to (or less than) the amount of one core stock, eg. MyNews, in my portfolio.
      In this way, I won't miss their potential good prospect, and at the same time, I hope I can bear less risk. The downsides are of course I need to spend more time to find and monitor a basket of them; and if only one excels, I won't make much.

    7. Thanks, I don't subscribe to Busy Weekly though.. It's not wrong to diversify more into good companies. When it's difficult to choose one, just buy all :) I'll follow MPI & Unisem closely but have to trim my portfolio first..