Trade Plan 21/9/2018

dow +0.95%
s&p +0.78%
nasdaq +1.05%

no news, no economic figures

bullish

Trade Plan 20/9/18

dow +0.61%
s&p +0.13%
nasdaq -0.05%

no important economic announcements today
no major news today

micron earnings today


hsi trade plan:
- if bullish, target is 27,600, then 27,700 = gain of 300 points
- if bearish, target is 27,300, then 27,200 = loss of 200 points
- if range then levels to note are 27,600, 27,450 and 27,300



bias is to the bullish side because us is up, but 30min chart price is at upper trend line resistance, so most likely will come down first before going up

not expecting extreme market conditions today, so don't expect prices to deviate too much from 50 ema

Trade Plan 19/9/2018

dow up 0.71%
s&p up 0.54%
nasdaq up 0.8%

no important economic figure released today

https://www.reuters.com/article/us-usa-trade-china-response/china-hits-back-by-levying-tariffs-on-60-billion-of-u-s-goods-idUSKCN1LY22V
China to penalize $60 billion of U.S. imports in tit-for-tat move
Trump to impose tariff on $267 billion of additional imports if china retaliate

not sure how HSI will react today
it will probably go range bound, with the highest target being 27500 due to the bullishness of the us market

target? when bullish or bearish? max levels?

key levels? - when bullish or bearish?

doubt prices to stay far from 50 ema for long today

Trade Plan 18/9/18

no major economic figures to be released this week
s&p 500 down 0.56%
dow down 0.35%
nasdaq down 1.47%

https://www.cnbc.com/2018/09/17/trump-puts-new-tariffs-on-china-as-trade-war-escalates.html
additional tariffs on roughly $200 billion of imports from China. The tariffs will take effect on September 24, 2018, and be set at a level of 10 percent until the end of the year. On January 1, the tariffs will rise to 25 percent. Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.

no big earnings to be released

HSI might test low of 26,250 today
if trump's news isn't good, it is most likely headed for 26,000

Stochastic divergence convergence setup

Stochastic divergence setup

Guangzhou Automobile Group (2238.HK)

3/11/2017

State-owned automobile group engaged in diversified business including R&D and manufacturing for vehicles (automobiles and motorcycles) and parts, automotive trade services, automotive financial services etc. GAC owns or has directly invested in dozens of businesses, including GAC Motor, GAC Honda, GAC Toyota, GAC Mitsubishi, GAC Fiat Chrysler, GAC Engineering etc.

metrics

1. last done 19.36 hkd
2. market cap 180965m hkd, 31.6b sgd
3. pe 12.55, pb 2.15
4. total debt to equity 33.8%, current ratio 1.44
5. dividend yield 1.97%, 5yr cagr 27.7%, consistent
6. 5yr cagr: revenue 30.7%, earnings 40.8%, consistent
7. strong cash flow

operations

1. 5 business segments
1. R&D
2. manufacture of vehicles and motorcycles
1. joint ventures with honda, toyota, Fiat-Chrysler, Mitsubishi and GAMC
2. hybrid and full-electric vehicles
3. joint venture Wuyang-Honda - motorcycles
3. parts and components
4. commercial services
5. financial services

1. growth seems more from SUVs, growing 61% yoy in 1H2017
2. electric vehicle sales and production growth 14.4% and 19.7% in respectively 1H2017

investment thesis

1. established brands
2. value chain in automobile industry
3. cheap relative to peers

risks

1. slow down in China vehicle industry

Sembcorp Marine (S51.SI)

2/11/2017

metrics

• last done $2.00
• market cap sgd 4.2b
• pe 51.12, pb 1.67, nav 1.206
• total debt to equity 162.18%, current ratio 1.34

relative valuation

• keppel corp pb 1.17
• sembcorp ind pb 0.88
• sembcorp marine 1.67

operations

• 2 main segments
• rigs & floaters, repairs & upgrades, offshore platforms and specialised shipbuilding
• ship chartering
• Rigs and floaters remained the largest segment, accounting for 40% of total revenue followed by offshore platforms at 36%, repair and upgrades at 20% and others at 4%

 summary

1. Successfully sold nine Pacific Class 400 jack-up drilling rigs to Borr Drilling, sold for about US$1.3 billion, to improve liquidity position. with current ratio at 1.34, liquidity should not be a problem in the meantime
1. interest expenses to decline as debt is reduced
2. We believe provisions of $329 million made in FY2015 for the Sete Brasil contracts remain adequate under present circumstances
3. With deliveries till 2020, our net order book currently stands at $7.97 billion. Excluding Sete Brasil projects, net order book totals $4.85 billion
4. Good progress has been made in the development and commercialisation of our Gravifloat technology for near-shore gas infrastructure solutions

risks

• execution risks from existing order book and future orders
• unforeseen impairment risks
• oil price decline

Centene (CNC)

9/6/2017
accumulate

metrics

• market cap usd 13.37b
• pe 19.15, pb 2.2
• 5 year: revenue cagr 38.04%, earnings cagr 30%, consistent
• total debt to equity 78.97%
• roe 13.88, roa 4.05, recent fall
• growing cash pile with strong operating cash flow

operations

• multi-national healthcare enterprise that provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals
• Managed Care 92% revenues
• provides health plan coverage to individuals through government subsidized programs, including Medicaid
• and Specialty Services 8%
• We provide or arrange health care benefits for services normally covered by Medicare, plus a broad range of health care benefits for services not covered by traditional Medicare, usually in exchange for a fixed monthly premium per member from CMS
• We offer commercial health care products to individuals and large and small employer groups as well as products to individuals through the Health Insurance Marketplace
• 30 years track record
• the federal government is a significant customer to our Specialty Services segment due to our Federal Services business
• We operate in a highly competitive environment

outlook

• We believe recognition of the value of managed care as a means of delivering improved health outcomes for Medicaid beneficiaries and effectively controlling costs will continue to strengthen. A growing number of states have mandated that their Medicaid recipients enroll in managed care plans. Other states are considering moving to a mandated managed care approach
• revenue guidance for 2017: up 17% yoy 

Alibaba Group Holding (BABA)

9/6/2017
buy
unstoppable e-commerce giant with strong and consistent growth. #1 e-commerce sites and diversified business. pe 50.27 reasonable for strong growth in bullish market.

metrics

• market cap usd 310.8b
• pe 50.27, pb 7.57
• 5 year: revenue cagr 35.62%, earnings cagr 38.68%, consistent
• total debt to equity 32.55%
• roe 17.5%, roa 10.62%, inconsistent
• growing cash pile with strong operating cash flow

operations

• taobao.com - #1 e-commerce app in china
• lazada.com - #1 e-commerce app in 5 SEA countries
• many others #1 everywhere
• segments: core commerce, cloud computing, digital media and entertainment, innovation and initiatives, strategic investments

outlook

• unstoppable
• goal to reach usd 1tn gross merchandise volume by 2020, currently usd 547 bn 

Alphabet (GOOGL)

9/6/2017
buy
monopoly company, owning the #1 search engine in the world and #1 video streaming website in the world. revenues from advertisements expected to grow into the future. ultra large cap stock with strong yoy growth and reasonable pe of 32.37.

metrics

• market cap usd 687.5b
• pe 32.37, pb 4.80
• 5 year: revenue cagr 14.37%, earnings cagr 12.75%, consistent
• total debt to equity 2.83%
• roe 15.02%, roa 12.37%, stable
• growing cash pile and operating cash flow

operations

• We generate revenues primarily by delivering relevant, cost-effective online advertising
• Google.com, the Google app, YouTube, and other Google owned and operated properties like Gmail, Google Maps, and Google Play
• Apps, in-app purchases, and digital content in the Google Play store; • Hardware; • Google Cloud offerings; and • Other miscellaneous products and services.
• 50% revenue in US, 30% EMEA, 15% APAC, 5% rest of world

outlook

• online shift will continue to benefit our business
• Non-advertising revenues have grown over time
• hardware sales, sales of apps, in-app purchases and digital content products, and service and licensing fees

risks

• foreign exchange risk from revenues derived overseas
• competition
• economic conditions

Chinasoft International (0354.HK)

22/5/2017

metrics

• market cap 10,545.98 mil hkd (1.88bn sgd)
• last done 4.38 hkd
• pe 19.60, pb 2.18, ev/ebitda 11.82
• dividend yield 0.28
• 10 year: revenue cagr 23% consistent, 6 year: earnings cagr 25% consistent
• total debt / equity 31.92%
• roe 11.77%, roa 6.04%, both consistently increasing
• strong cash flow and healthy and increasing cash in balance sheet

NS Solutions (2327:JP)

22/5/2017

metrics

• market cap 259,010.80mil jpy  (3.2bn sgd)
• last done 2,603 jpy
• pe 17.42, pb 2.04, ev/ebitda 11.70
• dividend yield 1.73, 7 year: dividend cagr 22%, consistent
• 7 year:  revenue cagr 5.2% consistent, earnings cagr 8% consistent
• total debt / equity 0.71%
• roe 12.59%, roa 7.72%
• positive cash flow and strong cash in balance sheet

Yihai International Holding (1579.hk)

17/5/2017
buy - ld 4.07 hkd, tp 6.90, upside 69%
sole supplier of hot pot soup flavoring products to Haidilao Group, popular steamboat chain.

metrics

• market cap 4229.48 hkd mil (760 sgd mil)
• last done 4.06 hkd
• pe 16.64, pb 2.96
• dividend yield 1%
• 4 year: revenue cagr 36% consistent, earnings cagr 70% consistent
• total debt to equity 0%
• roe 26.52%, roa 18.55%
• strong positive cash flow, spike in cash in balance sheet

operations

• In China, the Group is the exclusive supplier of hot pot soup flavoring products to Haidilao Group, supplying customized hot pot soup flavoring products to Haidilao Group, and supplying retail products and customized condiments to Shuhai Supply Chain and Youdingyou (related parties of the Company). The Group is also a provider of cooking condiment to the family customers in China, suppliers of catering services and food companies
• leading and rapidly growing compound condiment producer in China
• sales of the Group covered 360 cities in China, including all tier-1 cities, 32 tier-2 cities and 324 tier-3, tier-4 and lower-tier cities
• number of distributors of the Group reached 782
• as of 31 December 2016, the Group introduced a total of 41 flavoring products, 9 dipping sauce products and 15 Chinese-style compound condiment products
• expansion of e-commerce channels - Tmall and Suning E-commerce
• As of 31 December 2016, the Group exported products of eight categories to 14 countries and regions, including Hong Kong, Macau, Burma and Malaysia

outlook

• In 2016, the market size of China’s catering industry increased by 10.8% year-on-year to RMB3.6 trillion, while the total retail sales of consumer goods topped RMB33.0 trillion, a year-on-year increase of 10.4%
• The market size of the PRC compound condiment is expected to reach RMB148.8 billion by 2020, representing a CAGR of 14.7% over 2015-2020 and 22.1% of the overall condiment market of China

Tat Seng Packaging (T12)

10/5/2017
accumulate - ld 0.575, tp 0.70, upside 21%

1. undervalued pb < 1 and pe 6.2
2. fundamentally sound - china manufacturing figures ok
3. attractive and growing dividends with low payout ratio

metrics

• market cap S$ 90.39 mm, float 16.69%
• last done S$ 0.575
• pe 6.228, pb 0.865, ev/ebitda 3.111
• dividend yield 3.47%, dividend 5yr cagr 24% consistent, payout 33%
• revenue 5yr cagr 4.8%, earnings 5yr cagr 13.4%, uptrend
• total debt / equity 33%, current ratio 1.49
• roe 14.7%, roa 6.3%
• strong positive cash flow, stable and growing cash in balance sheet
• shareholders: Hanwell Holdings Limited 63.95%, See Moon Loh 15%

operations

• manufactures and sells corrugated paper packaging products such as corrugated boards and cartons for the packaging of electronics and electrical, food, pharmaceutical and other products
• 85% of FY16 revenue was from within China, with the rest derived from Singapore
• For FY15, three largest customer sectors were Printing, Publishing & Converters (40%), Medical, Pharmaceutical & Chemical (27%) and Electronics & Electrical (20%)
• five facilities in China – namely, Suzhou, Jiangsu province; Hefei, Anhui province; Nantong Rugao and Natong Tongzhou, both in Jiangsu province and lastly, Tianjin

outlook

• annual report 2016
• We expect the operating environment in China and Singapore to remain challenging
• For our Singapore operations, raw material costs may increase if the exchange rate of US Dollar against Singapore Dollar is strengthened further
• In China, with increased environmental awareness and measures introduced by the Chinese government to deal with pollution, we expect the cost of raw materials and processing costs to increase
• china pmi > 50, china consumer sentiment > 100

Cogent Holdings (KJ9)

11/5/2017

buy - ld 0.785, tp 1.08, upside 37%

1. strong growth with reasonable valuation pe 11.9
2. strong business - properties located in good locations, value chain services
3. clear growth strategy

metrics

• market cap S$ 382.8 mm, float 12.93%
• last done S$ 0.8
• pe 11.935, pb 3.03, ev/ebitda 8.812
• dividend yield 2.35, dividend cagr ~70%, consistent
• revenue cagr ~7.3% consistent, earnings cagr 32% consistent
• total debt / equity 94.7%, declining past 3 years
• roe 27.9%, roa 9.07%
• strong positive cash flow, stable cash in balance sheet
• shareholders: Yeow Khoon Tan (chairman) 70.27%, Yeow Lam Tan (managing director) 13.58%

operations

• 4 business segments
• transportation management services (19% of revenue) - over 100 prime movers and 400 trailers, transport containers
• warehouse & property management services (40% of revenue) - inventory management, container stuffing and un-stuffing activities, re-packing and palletisation, forklift handling, chemical sampling and drumming services, the grandstand (largest shopping and lifestyle hub in bukit timah)
• container depot management services (19% of revenue) - container depot and yard operations
• automotive logistics management services (22% of revenue) - 10 storage facilities and capability of storing more than 3,000 cars at various locations, customs processing
• Cogent One-Stop Logistics Hub - 1.6 million square feet Gross Floor Area, warehousing, container depot and transportation services, high volume of deliveries can be made simultaneously within minutes, in Singapore’s prime petrochemical hub will give Cogent a strategic advantage to outperform its competitors

growth strategy

• clear growth strategy
• Expansion of warehouse & container business in Malaysia - Port Klang Project, expanding the warehouse business with an additional 270,000 square feet of build-up area. The warehouse has commenced operations in March 2017
• Jurong Island Chemical Logistics Facility project on Jurong Island - 3.5-hectare plot of land, cater to the strong and growing demand for one-stop logistics services within Jurong Island, took over on 13 October 2016
• recently awarded 5.9-hectare container depot at Tuas South and our patented Sky Depot at the Cogent 1.Logistics Hub, both of which are expected to be fully operational by the 2nd quarter of 2017

risks

• The financial liabilities of the company are interest-free - little interest rate risk
• The group’s transactions are largely denominated in Singapore dollars - little fx risk
• transportation management services revenue declines past 2 years from 30.3mil to 25.9mil - could be due to industry slump or increased competition or increased costs

Sinostar PEC

12/4/2017
Accumulate - tp 0.36

1. Attractive valuation - PE 7.2, EV/EBITDA 1.161
2. Decent Dividend yield 2.44% and consistent
3. Favorable petrochemical outlook in PRC - shown in Revenues and Earnings
4. Strong fundamentals - low debt, positive cash flow, high cash holdings

Metrics

• Market Cap S$131.2m, Float 45.91%
• Last done (as of 12/4/2017) S$0.205
• PE 7.2, PB 1.023, EV/EBITDA 1.161
• Total Debt to Equity 0.05%
• Dividend yield 2.44%, just started paying, consistent
• ROE 15.5%, ROA 8.8%

Operations

• Downstream petrochemical products - Propylene, LPG, Polypropylene
• Situated within the Zhongyuan Oilfield—one of PRC’s largest oilfields
• Near populous and industrialised provinces such as Shandong, Henan, Anhui, Jiangsu, Shaanxi, Hebei and Zhejiang
• Transportation and Logistics - Subsidiary Dongming Changshun Transport Company Ltd
• Recent acquisition in 2015 - positive contribution that year
• Annual capacity to process 550,000 tonnes of raw LPG and is able to further process part of generated propylene into 50,000 tonnes of polypropylene annually
• Strategic affiliate - Shandong Dongming Petrochem Group, China’s largest independent oil refiner with primary processing capacity of 15 million tons per year

Investment thesis

• "We believe that the demand for LPG is set to rise, buoyed by robust demand from the residential sector" - annual report 2015
• "The Chinese government is looking to ease policies further in light of the slowdown in the market of which likewise extend to invest and further the growth of the petrochemical industry of the state" - annual report 2015
• Turnaround play - Divested from previous operations to specialize in Petrochemical segment. Was loss making but recently turned profitable

Thaibev

8/4/2017
Accumulate:

• Attractive valuation - PE 21.7 for stable and growing consumer staple business
• Established brands and market share 
• Attractive dividend yield 3.44% and growing consistently
• Clear vision growth strategy - growing and ample cash for acquisitions

Metrics

• Market cap S$23.6bil, Float 28.8%
• Last done (as of 8/4/2017): S$0.94
• PE 21.7, PB 4.7, EV/EBITDA 16.6
• Revenue CAGR ~5%, Earnings CAGR ~10%
• Total Debt to Equity ~31%
• Dividend yield 3.44%, Dividend CAGR ~17%
• ROE 16%, ROA 10%

Operations

• Business segments: Spirits (55%), beer (32%), non-alcoholic beverage (9%), and food (4%)
• Core products: “Ruangkhao”, “Hongthong”, “Blend 285”, “Chang” beer, “est” soft drinks, “Oishi” green tea, and “100PLUS”
• Oishi food: Japanese restaurant and ready-to-cook and ready-to-eat food
• Revenue: 96% Thailand, Rest international
• Thailand market share: Beer >40%, Spirits >90%

Investment thesis

• Established and strong market share in Thailand - Spirits and beer
• Vision: The company's target is to have more than 50% revenue contribution from non-alcohol beverages by 2020 and more than 50% of sales from overseas. Therefore we could see many more M&A deals
• Resilient demand for Spirits, even in poor economic conditions
• Chang beer re-branding might gain more market share
• Bottle change from brown to green - more premium look
• Keep only Chang Classic
• Alcohol level drop from 6 to 5.5% - easier to drink
• "Brew the friendship" slogan
• Selling price increased to same level as competitor

Risks

• Hikes in excise tax and production costs
• Competition
• Beers main competitor - Boonrawd: Leo Brand
• Strong competition in non-alcoholic beverage segment

Tianjin Zhongxin Pharmaceutical Group

31/3/2017
Accumulate:

1. Attractive valuation PE ~12 for level of growth
2. Decent dividend yield ~3.5%
3. Established TCM business in China with strong products, coupled with Western Pharma exposure

Metrics

• Last done (as of 31/3/2017): S$0.99
• PE ~12, PB ~1.33
• Revenue CAGR ~10%, Earnings CAGR ~12%
• Total Debt to Equity 13.66%
• Dividend yield 3.5%, Dividend CAGR ~8%
• ROE 13.4%, ROA 7.9%

Operations

• Traditional China medicine focused manufacturer and developer - 60% TCM and 30% western pharmaceutical products through cooperation with foreign companies
• Owns 560 varieties of preparations in 17 types, 587 certificates of approval for preparations, and 9 certificates of approval for crude drugs. Among them, 4 Chinese medicines have been honored as National Treasure-like creations
• Products have also been exported to more than 30 countries
• R&D focused - The Company completed application of 38 invention patents, 9 utility model patents and 9 exterior design patents during the year and 11 invention patents were approved in the year 2015

Growth story

• No concrete growth strategy stated other than more medicinal innovation

Risks

• RMB depreciation - profits in RMB
• Products lose demand, competition etc.
• Western pharmaceutical segment affected by geopolitical factors 

800 Super

31/3/2017
Accumulate:

1. Attractive valuation PE 10.72 for level of growth and stable industry
2. Decent dividend yield ~2.9%
3. Some levels of regional expansion
4. New waste to energy plan to generate more revenue streams

Metrics

• Last done (as of 31/3/2017): S$1.205
• PE 10.72 (low for growth), PB 2.9
• Revenue CAGR ~12%, Earnings CAGR ~23%
• Total Debt to Equity 65%
• Dividend yield ~2.9% (decent), Dividend CAGR ~35%
• ROE 26.2%, ROA 12.7%

Operations

• Waste management (waste collection and recycling services), cleaning and conservancy and horticultural services
• Re-awarded a public waste collection contract for a period of 7 years and 9 months commencing from 1 January 2014 to provide waste collection services for the residential and trade premises in the Ang Mo Kio – Toa Payoh sector

Investment thesis

• Upon its targeted completion in 2017, the Waste to energy plant at the Tuas South leasehold land is expected to generate new revenue streams and cost savings for the Group
• Successfully expanded our business footprint regionally with the establishment of a plastic recycling subsidiary in Batam, Indonesia
• "Strategic direction towards downstream waste treatment will create growth opportunities for 800 Super in the long haul" - value chain processing of waste into final product

Risks

• Competition stealing business
• Failure to execute expansion plans, or lack of further expansion plans

Isoteam

29/3/2017
Accumulate:

• Attractive valuation PE 12.47 for high growth
• Favorable macro factors - Singapore government infrastructure initiatives
• Potential growth - expansion into Myanmar, Malaysia and other countries

Metrics

• Last done (as of 29/3/2017): S$0.40
• PE 12.47 (cheap for growth), PB 2.06
• Revenue CAGR ~21%, Earnings CAGR ~25%
• Total Debt to Equity 16.49%
• Dividend yield 1.9%, Dividend CAGR ~10%
• ROE 18.49%, 11.27%

Operations

• Building maintenance and estate upgrading - Repairs & Redecoration, Addition & Alteration, complementary niche specialist services, Eco-conscious solutions
• Industry leader with 19- year track record
• Growing order book

Growth story

• Singapore government initiatives - Ongoing rejuvenation of mature and middle aged estates
• 80% of buildings to be Green Marked by 2030
• Expanding into Myanmar (won 4 contracts in 2016) and Malaysia
• Expand R&R and A&A services into untapped sectors in Singapore - educational institutions, army camps, industrial
• Renewable energy - Grow renewable energy installation business in Singapore (Solar panels and hydrogen fuel cells)

Risks

• Projects lost, competition, failure to execute growth plans