COE@99,999
With the record high COE, I think most car owner reaching 10 years would consider renewing their COE instead of changing car. Of course, alternatively is to opt for public transport (or car sharing) instead of owning a car. The question is whether you want to or not?
There are a lot of annual reports and with it, announcement of good results and new corporate directions.
Some notable one are:
A) APO@17 with dividend 1cts (about 6%)
"
Given the challenging macro-economic environment, namely confrontational politics between two of the largest economies of the world, regional geopolitical turmoil, as well as continual coronavirus strain mutations and fallouts, the outlook for 2022 remains murky and highly uncertain. Rising international raw material prices and severe manpower shortage in Singapore will also directly impact the Group’s manufacturing activities.
In view of these, our corporate strategy for the next few years will be to focus on profitability through strengthening our existing market bases and selectively foray into niche markets. With funds accumulated over the years, we are in a strong position to continually seek new business opportunities and pursue our longterm development policy. The planning and executive oversight of the business policy and strategy of the Group is part of my responsibilities as Group Executive Chairman. "
What I like about AP Oil is the increasing dividend. This is what I observed.
8 out of past 10 years (excluding this year), the dividend was 0.5cents.
Twice, the dividend was 0.75 cents.
Out of the blue, this year dividend was 1 cents.
Moving forward, we should expect 0.5cents (about 3% dividend yield), or 0.75cents (about 4.5%) or 1cents (about 6%).
In theory, there is 7 in 10 chance that we get 3% yield, 3 in 10 chance to get 4.5% yield and unlikely to be repeated 6% yield. This year 6% is more like an experimental error.
However, if I look at the dividend trends, then the picture would change slightly:
2012 - 3%
2013 - 3%
2014 - 3%
2015 - 3%
2016 - 3%
2017 - 4.5%
2018 - 3%
2019 - 3%
2020 - 4.5%
2021 - 3%
Current Year Dividend - 6%
I side track a little bit to share my thinking process of a value trap and what I meant to say is APO looks like a value trap but seems not to.
A value trap has a characteristics that the company is cash rich but with a declining business which some how sucking out cash little by little every year aka it's value keep dropping and dropping.
APO looks like a value trap yet to be proven - that's how I see it now.
<vested>
B) HLS@30 Dividend 1.25cents (about 4%)
"
Singapore’s external demand outlook has moderated in light of the global surge in COVID-19 cases, persistent supply chain constraints and stubborn inflationary pressures against the backdrop of elevated geopolitical tensions. Barring fresh disruptions, the Ministry of Trade and Industry has maintained Singapore’s economic growth forecast at 3.0% to 5.0%, albeit with uneven recovery across various sectors. The Group will continue to be vigilant and remain selective as we explore business opportunities in the property segment to diversify and bolster our project development credentials."
I wanted to start by saying HLS is a GEM. I quite like HLS and I thought why nobody (valuebuddies) take notice of HLS?
Any valuebuddies worth their salt will read and understand that construction sector is a growing area in Singapore. A lot of financial analyst had already covered and talking extensively on those construction counters listed in SGX and there is no need for further introduction. However, if you look into those analyst report, HLS is missing - and that prompted me to ask the question in previous paragraph.
When I says HLS is a GEM, I mean it. Comparing to other (property) construction company, it operates in a territory that no others operate (the closest competitor was OKP and you know what happen to OKP, if not read up). The Maxwell MRT was commissioned in Oct 2021 and more will come. It's TuasSouth strategy was very surprise to me - especially it seems to be a successful one, so far. I am quite sure that this is a present surprise to the management too and I hope this +ve results could give them a chance to take a new look at their strategy on property development.
What I meant to says is, take a look at Ho Bee (or similar property developer). Ho Bee had spend a long time to transform from a property builder to property owner/operator. The benefits of the transformation is getting clearer every year. I view Mr Chua as the top brain in Singapore and I'm glad that his results tells. I'm not vested in Ho Bee as I had missed the boat. I wish everyone who had vested best luck as Ho Bee is truly an amazing catch.
C) SLA@32
"
I am also especially proud of adding our first customer in the pure and challenging digital banking space as an existing Europe, the Middle East and Africa (“EMEA”) customer launched their digital bank in FY2021 and chose our solution to power it.
The Group’s investment in 37.1 million shares (an 8.30% ownership stake) of Global InfoTech Co. Ltd. (“GIT”) is valued at RM288 million as at 30 June 2021 and has performed commendably over the volatile period. We remain bullish on the long-term growth and prospects of the IT market in China. We believe there is further potential and we remain committed to both existing and potential future investments as China continues its quest for global leadership in technology."
SLA is a growth stock. Unfortunately (or fortunately for those would be investor), it's growth story was tinted with a short seller report few years ago. In additional, a lot of it's customers is holding back on purchase of big ticket items due to C19 and uncertainty. What is true is Fintech and Digitalisation is definitely the right way to move forward and without these innovations, the bank will wither - irregardless of how glory was it past.
The only question is when these banks transform, would they engage some new innovative partners or SLA - someone who knows their business, culture and minefields to avoid?
There are so many things to learn and I really appreciate the chances that's given and again - I wish every valuebuddies a meaningful and happy investment journey too.
Gratitude!
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