Although the STI did no go up much (<2%) for the month of February, my portfolio performed much better (+11%) this month thanks to the following counters:
$AEM(AWX.SI)
$Sunpower(5GD.SI)
$Accordia Golf Tr(ADQU.SI)
$Silverlake Axis(5CP.SI)
$Sasseur Reit(CRPU.SI)
$Oxley(5UX.SI)

My conviction and patience have paid off. Even Oxley which have been on the downtrend for so long has finally started to move up, however it’s still underwater for me. Last week I took 23% profit for AGT. Today, I sold all my Silverlake shares at 31% profit. I also sold 20% of my AEM share at 33% profit. And for Sunpower, my average price is 0.44 and I will sell my 2nd batch after the results release tomorrow.
As for Sasseur Reit, I will be keeping them for now. It is still CD with a 3.541c dividend coming up. I believe their outlet sales can continue to grow and it should be able to payout a dividend yield of at least 8.5% after XD.
I first bought Sasseur reit 5 months ago. I did not buy much as there is no track record and the malls are in China, it will be difficult to monitor how there are doing. However I believe in their business model and even added more during the recent price drop before the results release. The results were better than expected and it proves that the Outlets model is resilient to online shopping and even the trade war! The 4Q DPU is 28% above forecast. This is despite the fall in the RMB/SGD exchange rate. The reason for the good performance is that the 4Q is historically the period with the highest sales and also that they no longer have to keep reserves in case of poor performance. This REIT is difficult to understand and is not for everyone, please see my previous post if you want to know more: https://www.investingnote.com/posts/1019661

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9 comments
gagnant76

You are selling most of your holdings, did not buy others? So holding onto more cash?

shirleytoong

Reply to @gagnant76 : this morning I tot could make it to $116 being so strong yesterday-so much hype on the signing US -NK

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aero73

Sunpower really power sia.......

christophertan0

Congrats bro! Huat ah!!

Pizzaprata

Reply to @christophertan0 : Thanks. You also did well this month!


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Are $Accordia Golf Tr(ADQU.SI) golf courses affected by Typhoon Hagibis?


That's the million dollar question that AGT investors would be asking. Considering that the typhoon is the most powerful to hit Tokyo in decades and 35 of AGT's golf courses are in the Greater Tokyo area, I think it's quite likely that some of the courses may be affected. Looking at the photos of from the Typhoon aftermath, there may be flood damage to some courses which may require costly cleanup, see link: https://www.japantimes.co.jp/news/2019/10/13/national/photo-gallery-typhoon-hagibis/

There has been no announcement from the AGT management so far but I guess it may take awhile to assess the damage. The timing of the Typhoon is really bad as I expect a bumper DPU of at least 4c when the first half FY20 results are announced next month due to the increase in number of golfers for this period. 

Anyway, I decided to take some profit and sold half my shares which is 30k shares @0.575, see previous post: https://www.investingnote.com/posts/1601263. Hopefully the damage is not too bad and the share price can recover to above 60 cents. Good luck to those vested.

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Intel Strikes Back

A couple of good news from $AEM(AWX.SI)'s main customer $INTC from the past week. According to the attached Maybank KE report, Intel has started ordering EUV equipment which are lithography tools used for manufacturing 7nm process nodes semiconductors. This means Intel is on tract to launch their 7nm chips in 2021 which means more orders for AEM next year. As I mentioned in my previous post, Intel has no choice but to push forward regardless of the poor yields in the new process nodes as they have to snatch back their technological lead from $AMD

The second news this week is that Intel has slashed their new 10th generation chips for high end desk tops (HEDT) by up to 50%, see link: https://www.cnet.com/news/intel-dramatically-cuts-prices-of-top-end-i9-gaming-chips/. This is unprecedented, faster chips at much lower prices. Intel has no choice as these are still the ancient 14nm process chips and Intel just squeezed out more performance from these chips by boosting the clock speed. However the cut in prices has put Intel chips back in the lead in the performance per dollar, see chart below. This will help Intel maintain demand for the older process chips.

However this lead will be short-lived as AMD is expected to launch their 3rd gen HEDT Threadripper 7nm chips in November. All these are bad for Intel but good for for equipment suppliers like AEM as Intel have to ramp up their 10nm process and start on their 7nm process next year.

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$AEM(AWX.SI) has finally broke 1.20, it's amazing that there are so many sellers at every pip despite the positive news recently. There are too many investors with only a short term view of AEM. The Maybank KE analyst has increased the target price of AEM to 1.50 which is the same as my estimate last month: https://www.investingnote.com/posts/1569229
I guess most are concerned that next year's orders have been front loaded to this year which means next year will be bad. However like the MKE analyst I am confident that next years orders of HDMTs will continue to be big as Intel will be ramping up their 10nm production as well preparing for the 7nm process (see image).
On top of that we have the Hybrid Project for Intel which should be ready for production by years' end. Currently Intel is using the HDMTs mainly for functional testing which Intel calls Class Test. AEM is developing the Hybrid solution which is an extension of the HDMT for System Level Testing (SLT) and Burn-in. Intel is still buying AEM's legacy STHI equipment currently for SLT. However the STHI is able to handle only one chip at a time as compared with up to 30 chips at a time for HDMTs. Therefore Intel will definitely be moving all SLT and burn-in to the new Hybrid solution to reduce the Cost of Testing (CoT).
Why does Intel need so much testing? They are facing huge yield problems with the new 10nm process. By having multiple performance characteristics, Intel may be able to salvage defective chips as lower performing processors for the low end market. This is called the Binning process, just Google it if you want to know more.
However I do not expect much contribution from the 5G cable test equipment from Huawei given the problems Huawei is facing and that these testers cost only a couple of thousand each. However I do hope that AEM can break Fluke Networks domination of Network cable testers in the long term. Please DYODD.

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Update on $Accordia Golf Tr(ADQU.SI) AGT AGM

I added another 30k of AGT shares @0.525 after the AGM and before the 1st Quarter Ending Jun’19 results were released which I expected to be good, please see my previous post here:https://www.investingnote.com/posts/1528397 .
I have complained about AGT’s passive management before but it’s their inability that has allowed me to buy AGT shares at a good price. Anyway you do not need good management for this Biz Trust. When questioned by a frustrated shareholder what the management is doing to improve the performance, they answered candidly that as there is no refinancing fees this year and as long as no natural disaster, it will be better. LOL. At least the new CFO is fluent in English and is more open when answering questions. He allayed one of my main concerns on AGT, the repayment of membership deposits. He explained the reason why membership deposit refunds were so high in 2017 was due to the expiry of 10 year lock up periods for a couple of golf courses. There is none of these lock up periods left so future refunds should be stable.
The management explained that the Goodwill impairment of 13.1b was triggered by the potential reduced cash flows from Nishikigahara Golf Course because of the impact of a flood prevention project by the government although nothing has been determined. The management is confident that the Golf Course lease will be renewed albeit on an annual basis instead of every 3 years previously. There is 4b Yen goodwill remaining in the books.
The membership income will continue to decline. They are unable to increase new membership as the utilisation of the golf courses during the weekends are full. Most of the current members are dormant and 80% of the golf players are visitors which pay higher fees. This will affect the Q4 results which is highly dependent on membership fees as there are less golfers during the winter months.
Lastly do not expect any acquisitions in the near future. The management explained that they are unable to make an accretive acquisition at the moment. Which is not surprising given the current low share price and the sponsors would definitely be asking a high price for their golf courses.
Therefore do not expect any inorganic growth however I think that they can easily pay a DPU of 5 cents this year barring any natural disasters. The good news is that the Yen/SGD exchange rate is at a 2 year high. Please DYODD, vested 60k shares.

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$KSH(ER0.SI) 2019 AGM Highlights

Investors of KSH and their JV partners would be happy to know that the KSH Executive Chairman Choo Chee Onn confirmed the official launch date of Oct 2019 for the massive 5.3 million sqm Gaobeidian Project at the company’s AGM last Friday. The project launch had been delayed a couple of times, first due to Beijing’s cooling measures which requires the homes construction to be 30% completed before sales can start and delayed again last October due to “the uncertainties caused by the trade war”. Mr Choo, who just came back from China revealed that the main reason for the delay was the additional cooling measures which restricted the sales to local residents only which means that those from Beijing cannot buy. The local government has eased these restrictions and now non-locals will have to pay social security for 3 years to be eligible to purchase in Gaobeidian.
Even with this condition, the JV company is confident enough to launch the first 100,000 sqm, about 820 units at a price of RMB 8,000 per sqm. They will quickly release more units once 50% of the units are sold. Although the launch price is a far cry from the RMB 20,000 psqm in nearby Baoding after news of the Xiong’an SEZ was released, the Gross Margin is a respectable 50% as their cost is around RMB 4,000 psqm.
Another piece of interesting info that the Chairman revealed is that the long term plan for their 13 overseas hotel properties is to form a Reit. Looks like everyone is jumping into the Reit wagon. However it’s a long time coming as 6 of the properties are still under development and they still have to wait for the income to stabilise first. They will also be adding more hotels in the meantime.
Together with the good sales of their Singapore development projects, the prospects of KSH is looking very bright however there will be much pain before gain. Due to the new financial reporting standards; for residential developments all interest expenses will have to be expensed instead of being capitalised previously. This would massively impact the profitability of KSH and their JV partners as their projects are only at the start of construction but have taken huge loans to purchase the land, etc. I expect their profits to be impacted for the next one year at least. Not a problem if you are a long term investor. Vested 50k shares, please DYODD.

$Oxley(5UX.SI) ,$Lian Beng(L03.SI) $SLB Dev(1J0.SI) ,$Heeton(5DP.SI)

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