Portfolio - February 2019

Everyone has their "poison" and mine happened to be electronic gadgets >.<" Went to the IT fair over the weekend and bought a NAS (Network Attached Storage). If you have no idea what is that, it is very normal. CZM does not understand why am I spending so much money on it too. lol.

Synology DS918+ with 8GB RAM

4 x 3 TB Seagate IronWolf NAS Hard Drives

Guess the total price? Shall reveal it at the end of the post. Haha. This is probably going to be one of the longest portfolio updates because there were lots of transactions so let's not get distracted.

Our portfolio increase by 0.91% to $379,814 - $848.52 of capital withdrawal and $4,281.49 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"Cash Flow" is the amount of money being injected/withdrawn from the portfolio (buying stocks = +ve cash flow while selling stocks and collecting dividends = -ve cash flow)

SOLD
- SingPost (7,000 units) @ $0.950
- TSH (1,000 units) @ $0.350
- Lion-Philip S-REIT ETF (9,000 units) @ $1.034
- Lion-Philip S-REIT ETF (3,000 units) @ $1.041

I have blogged about our reasons for selling the above except for TSH, you can read about them here:
- Unethical SingPost
- Lion-Phillip S-REIT ETF - High Cost and Low Yield

TSH was a legacy position which I had bought in April 2016 after reading this - TSH Corporation Ltd- Classic net-net micro-cap trading at steep discount to net cash, announces big dividends. Since then it has diversified its assets, did a capital distribution/huge dividends and became a shell company.

I was hoping it will just get delisted so I can save some commission but it never did until last month when it got reverse takeover, went through a share consolidation (1:20) and became a pub and bar business. Took a quick look at the new business and decided to sell it to get whatever remaining that is left and I am stuck with 50 units -.- Overall, it was still a pretty good investment with an annualized return of ~19%.

BOUGHT
- DBS (400 units) @ $24.92
- City Development Limited (400 units) @ $9.47
- APAC Realty (8,000 units) @ $0.57

These are all not new purchases so really nothing much to blog about. The reason for buying them remains the same:
- DBS has changed its dividend policy and has pledged $1.20 per annual going forward. This translate to ~4.8% dividend yield on cost with potential for capital growth.
- CDL properties are stated at cost and should be trading > PB 1. To be honest, we are not very fated with CDL. Whenever we buy, the price will always fall significantly.
- We did a quick comparison between APAC Realty and its peer, Propnex and concluded that it was more undervalued and attractive dividend yield for now. Having said that, I think APAC Realty has its risks. In its IPO prospectus, it was stated that dividend will be paid for the first 2 years and remains unclear if the company will continue to distribute dividends.

In addition, ThumbTack Investor (TTI) has written a pretty scary/negative piece of article on APAC Realty that is definitely worth a read - Acquisition of ERA Centre is Cashflow Negative. The way he does his due diligence is very respectable. Regardless, all investment is a good investment at the right price.

Dividends
The total dividends collected this month is $1,531.24. The breakdown is as follows:

Company	Symbol	ExDate	Shares	Total
Far East Hospitality Trust	Q5T	20-Feb-19	10,156	$101.56
Ascott Residence Trust	A68U	7-Feb-19	7,600	$301.42
Starhill Global Real Estate Investment Trust	P40U	7-Feb-19	12,000	$135.60
Parkway Life Real Estate Investment Trust	C2PU	4-Feb-19	2,000	$65.60
Thai Beverage Public Co Ltd	Y92	4-Feb-19	11,000	$102.71
SPDR STI ETF Units	ES3	4-Feb-19	13,000	$728.00
Mapletree North Asia Commercial Trust	RW0U	1-Feb-19	5,000	$96.35

Total dividends collected for 2019: $2,467.84
Average dividends per month for 2019: $1,233.92

StashAway

KPO

CZM

Capital: $17,000.00
Current: $17,340.29

The NAS costs $1,282 in total @_@"

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 - $354,145
- Portfolio - January 2019 - $376,381
- Portfolio - February 2019 - $379,814

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.)

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!

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.)