$$$ KPO and CZM $$$: February 2019

Wednesday, February 13, 2019

Unethical SingPost

We made our first transactions for the year and you might have guessed it based on the title of the post.

After holding it for 512 days (~1+ years) and including all the dividends collected, the total return is -26.3% and the annualized return is -19.5%. CZM has been sharing lots of news on SingPost and insisted that we should sell SingPost. You know - happy wife, happy life.

SingPost apologises after getting caught trying to trick man who paid S$7,000 to distribute flyers
- SingPost fined S$100,000 for not delivering mail on time in 2017
Mechanical fault caused letterboxes to be left open in Bedok

CZM's point of view is their business will continue to decline because people don't like doing business with unethical people/company? Regardless, looking at SingPost's latest Q3 financial statement, it might be true to a certain extent.

At one glance, it may look like its business is improving with net profit rising but if you were to look deeper...

We can see that their operating expenses have increased but its underlying net profit has actually decreased. Underlying net profit is a more accurate measure of its business because it does not include exceptional items which are one-off items such as asset impairment, fair value changes on investment properties, gains or losses on sale of investments and property, plant and equipment and M&A related professional fees.

SingPost has also recently announced immediate measures to improve service quality.

The way I see it is that their operating expenses will definitely increase further without any guarantee that their revenue/net profit will improve accordingly (at least not in the near future)...

SingPost's current dividend policy (changed 2 years back) is based on a payout ratio ranging from 60-80% of the underlying net profit for the financial year.

The payout ratio for last year was already ~75.6% (3.50 / 4.63). Assuming if operating costs increase without an increase in underlying net profit, there is also a possibility where the EPS will drop and DPS will be cut again.

Based on the current price of $0.95, its dividend yield would be ~3.68% (assuming dividend is kept constant at 3.50 cents per share) which is lower than our target dividend yield of 5% hence there is really no reason to hold on to it.

Bye SingPost!

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Tuesday, February 12, 2019

Portfolio - January 2019

Happy Chinese New Year everyone! This is our first CNY and we are no longer on the receiving end. From additional small "income" to huge expense that we got to incur yearly :( We were also debating who should be the one giving out (based on my observation, it is always the "mother/aunt" giving out). lol. On the bright side, the market has recovered so much that we would have met our target based on this month portfolio - Portfolio Performance in 2018.

Our portfolio increase by 6.70% to $376,381 - $728.00 of capital injection and (surprise, surprise!) $22,908.40 of capital gain. The one in blue is the StashAway portfolio, green is SGX and the total is in black.

If you prefer to look at numbers, this is the raw data used to generate the above bar graph. These numbers are as of the last day of the month.

"Cash Flow" is the amount of money being injected/withdrawn from the portfolio (buying stocks = +ve cash flow while selling stocks and collecting dividends = -ve cash flow)



We did not buy or sell anything last month because the "recovery" makes all the stocks look relatively more "expensive". As a result, I did not buy Lion-Philip S-REIT ETF too. CZM is asking why am I trying to time the market >.<"  The $728 capital injection is from our $1,000 monthly investment into StashAway - $272 dividends received from Singtel.

The total dividends collected this month is $936.60. The breakdown is as follows:

Company Symbol ExDate Shares Total
CapitaLand Commercial Trust C61U 31-Jan-19 2,000 $88.40
Lion-Phi S-REIT Shs CLR 30-Jan-19 12,000 $253.20
CapitaLand Mall Trust C38U 30-Jan-19 7,000 $109.20
Keppel DC REIT AJBU 29-Jan-19 3,000 $111.00
Soilbuild Business Space REIT SV3U 28-Jan-19 15,000 $217.65
First Real Estate Investment Trust AW9U 23-Jan-19 7,109 $152.85
SSB Jul 2018 GX18070N 1-Jan-19 500 $4.30

Total dividends collected for 2019: $936.60
Average dividends per month for 2019: $936.60


KPO's StashAway Jan 2019 Account Summary
CZM's StashAway Jan 2019 Account Summary

Capital: $16,000.00
Current: $16,051.10

On a side note, one can invest in StashAway using SRS and I have already blogged about our plan - New Strategy: StashAway + Supplementary Retirement Scheme (SRS)

You might be interested in previous months update too:
Portfolio Performance in 2018

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)