Sunday 8 January 2023

My Portfolio Dec22

 Summary For December 2022

Stock Portfolio @ End of Dec22

Year 2022 didn't end with a bang as many investors have hoped for. KLCI inched up only 0.45% in Dec22 while my portfolio improved by only 2.2%.

Overall for the whole year of 2022 my portfolio suffered a 16% loss. This is the second worst annual loss since losing 28.8% in 2018.

Meanwhile, KLCI ended year 2022 with a loss of 4.6% which is worse than 3.7% loss registered in 2021.

Most of the share price of stocks in my portfolio remain quite stable in December, with the exception of Krono & LeeSK which rallied 17% and 15% respectively.

Maybulk dropped from RM0.435 to RM0.36 but there was a 10sen special dividend ex-ed in the month.

Share price of Krono jumped in Dec22 mainly because of its commendable FY23Q3 result.

If compared to QoQ, FY23Q3's revenue (RM87.6mil) and net profit (RM7.25mil, EPS 1.03) rose 39% and 133% respectively. 

There is even a forex loss of RM3mil in current quarter.

Balance sheet looks clean with positive cash balance and cashflow seems good.

The management delivered some encouraging words in its prospect, as always, expecting gradual easing of China's zero-Covid policy to benefit the group.

Indeed, China has loosened its Covid-19 control measures significantly. 

Starting from today which is 8th of January 2023, Covid-19 will be downgraded from Class A to Class B infectious disease in China, in which mass testing, lockdowns and quarantine will no longer be required.

Furthermore, inbound flights and foreign visas application are also resumed, and China citizens can travel freely.

Even though China has experienced a massive surge in Covid-19 cases, it was reported that most are mild cases and its healthcare system is able to cope.

I believe that Covid-19 will be treated like normal flu by the second half of 2023 and nobody cares much about it anymore.

With increasing cost pressure and slower demand especially for its industrial packaging segment, Scientex's FY23Q1 result was so-so.

Revenue of RM1.03bil broke RM1 billion mark for the second consecutive quarter though. PATAMI improved 4% YoY to RM107mil (EPS 6.91sen).

Property division saw strong take-up rates while the management expected demand for its packaging products may weaken in 2023.

Cash balance has dropped to RM90mil and there is RM1.17bil of total borrowings. This is due to its aggressive land banking and business acquisition.

To me this does not seem too worrying as Scientex is capable of generating RM700mil of operating cashflow each year in the last 3 financial years.

However, if severe global recession similar to 1997 Asian financial crisis strikes, then it will be in trouble.

MyNews turned profitable for the first time since the start of MCO in this FY22Q4 with PATAMI of RM1.37mil (EPS 0.2sen).

Revenue in a quarter reached another record high at RM180.6mil.

The market apparently expected this and its share price has already gained 50% since the announcement of previous FY22Q3 result 3 months ago.

For the 12 months period of FY22, myNews manage to achieve net operating cash inflow of RM91.5mil, as it has high depreciation charges.

However, most cash are being reinvested into opening new stores amounting to RM72mil.

As a result, balance sheet does not look nice with lower cash and higher bank borrowings and trade payables. 

The group currently has 609 outlets made up of 464 myNews, 128 CU and 17 WHSmith.

I believe that its revenue will continue to grow in its FY23Q1 but can't be too sure about its profit.

FY22Q4 has a bit of one-off gain. If there is significant increase in impairment loss and finance cost, then there is still a possibility for it to swing back into red in FY23Q1.

New year brings new hope. I do hope that the economy and stock market will flourish in 2023 so that everyone can make money.

Frankly speaking, I don't think that my current portfolio can bring me good returns in 2023 unless the general market is bullish.

I should spend more time and effort to reshuffle my portfolio.

If I have time and "mood", I will write a short review of 2022 and preview of 2023 later, like I used to do every year. 

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