Summary for Past Postings

Among previous discussions, BUY call is still valid to the following counters:

(A) Parkway Life REIT: 
The counter has been range bouncing from 2.32 to 2.44. Recent downfall could present good entry point soon.

(B) SMRT: 
The counter has been building a higher low formation. Uptrend still intact, so don't miss the chance.

(C) Lantrovision:
The counter has been building a higher low formation. Potential uprising is in sight.

(D) SingPost:
The counter has been moving down. Investor could aim for valued hunting.

(E) United Engineer:
The counter has been moving side way for sometimes. However, technical indicator MACD suggests that potential up rising could be forming.

Apr[4] - First Resources (BUY<$1.86; End of downturn?)

COUNTER: FIRST RESOURCES

BUSINESS: 
The Indonesian planter involves in both upstream and downstream palm oil businesses. Its operation consists of plantations, refinery and processing. It also involved in harvesting and milling the fresh fruit bunches into crude palm oil (CPO) and palm kernel products. The plantation area is about 100,000 hectares in Indonesia.

OVERVIEW:

Year after year of record planting soybean from South America regions has led to supply glut and record-high inventory. It brought down soybean prices which is positively correlated to CPO. Coupling with recent oil price plummet, CPO prices has been suffering one of its longest downturn.

Amid such environment, First Resources has been consistently delivering high profitability. It has balanced age of plant profile, with ~58% being immature and ~42% in prime age. This could ensure sustainable fresh fruit bunch production and earnings growth in the next 5 years as its oil palm tree reach maturity and enter prime age. Among its Singapore listed peers, it reported highest EBITDA/CPO tonne of USD422 in 2014 yet lowest cost of production at USD228/tonne.

Over last few years, the counter achieved stable revenue and gross profit. Low debt ratio is another appealing factor, considering high interest rate era is in sight.

REASONS TO BUY:
(1) Palm oil inventories in China have fallen significantly by 60% at March 2015. It translates to potential upside catalyst for CPO prices.

(2) Indonesia government is planing to raise subsidy for biodiesel as well as issue new pricing formula. The move could benefit plantation counters with biodiesel plant in Indonesia, such as First Resources.

(3) Australian Bureau of Meteorology forecast that EL Nino could arrive in Jun. Historically, El Nino resulted in less rainfall which could lead to higher CPO prices.

(4) The counter is offering dividend at 0.023/share which is expired by 5 May.

(5) The counter price has been moving within range from 1.76 to 1.98 since December last year. Currently, it is trading ~1.82 in lower zone. Interested trader could take position for rebounding.

ENTRY PRICE:
Buy <$1.86 for price gain as well as dividend.

Apr[3] - United Engineers (BUY<$2.8; waiting for next Buyer?)

COUNTER: United Engineers

BUSINESS: 

Founded in 1912, the company was honored as the 11th oldest company in Singapore. It developed numerous iconic buildings, such as UE BizHub CITY, UE BizHub EAST. Besides property, its business used to span over sectors such as Engineering, Technology and Manufacturing.

OVERVIEW:
2nd half of 2014 marked a happening period for United Engineers. Its controlling shareholders, OCBC and Great Eastern Holding entered into exclusive agreement with TCC group from Thailand (Owner of Thai Beverage) for possible offer of their combined shares. Following with the news of potential buy over, the counter price surged from normal trading range ~2.3 to 3.3 at its peak. In the beginning of 2015, involved parties couldn't reach agreement so the plan was blown. Throughout the period, the company has divested non-core business (electronics engineering, etc) and focus on property sectors. Holding hefty cash from divestment, the counter has reduced its debt ratio to 0.45x from 0.78x in 2013. It is now more focus on property sector which consists of investment and residential properties in the regions.

REASONS TO BUY:
OCBC never hide its intention to divest its shares from the counter. Based on estimation from CIMB, the counter is currently trading with 21% discount to revalued net asset valuation. It offer the big margin of gain should any new buyer come to the picture again. OUE has previously disclosed its interest.

From the chart, it has been lingering within price range from 2.66 to 2.85. MACD is intending to break up from zero line which suggests bullish run could be forming.

Meanwhile the counter is under dividend entitlement period with $0.1 per shares.

ENTRY PRICE:
Buy <2.8.for high dividend as well as potential price gain.

Apr[2] - SingPost (BUY<$2; Proxy of regional e-comm logistic hub)

COUNTER: Singapore Post

BUSINESS:

The well known counter is running national postal service.  It provides domestic and international postal and courier services. It also offers end-to-end e-commerce logistic solutions.

OVERVIEW:

The counter has been facing increasingly competition in his traditional business. In the last quarter, domestic mail revenue fell 1.7% year on year while international mail revenue declined 2.7%. To continue its growth strategy, it has been expanding its end-to-end e-commerce logistics solutions network in the region and investing in e-commerce logistics infrastructure, technology and capabilities. 

On mid 2014, e-commerce giant, Alibaba bought ~10% stake into Singapore Post. Subsequently, the counter announced $182m plan to develop 3-storey logistic hub in in Tampines. Coming to early this year, it has announced new partnership with POS Indonesia and joint venure with PT Telekomsel, a leading distributor and retailer of mobile phones in Indonesia. All these steps are deployment as future regional e-commercial logistic hub.

Besides, Singapore Post has plan to improve its retail income from its center as well.

REASONS TO BUY:

The counter has stable income over the years. Its annual dividend yield is ~3% at current price. Due to its cash rich position, investor shouldn't be worried over any interest rate hike in near term.

Looking into potential grow of Alibaba e-commerce business in South East Asia, investor could take Singapore Post as the proxy into it. The potential profit is expected to be fully realized on 2016.

ENTRY PRICE:

The counter has been building foundation ~1.95 over last few months. Most of the broker firms have rated this counter at >2.15. So it is worth to accumulate <$2.

 

REVIEW ON WATCH-LISTED COUNTERS: China Sunsine, Civmec, M1

(A) CHINA SUNSINE

      The counter tended to move up on mid week but fell down eventually. Highest price was 0.405 over last week. RSI still above 50%, so buyer could still push higher for the counter.

(B) CIVMEC

      Price is consolidating for the counter meantime. Still valid for watchlist!

(C) M1

      Nice move from the counter! Highest point is > 3.95. RSI still >50%, so stronger move could be ahead.

REVIEW ON WATCH-LISTED COUNTERS: China Sunsine, Civmec, M1

(A) CHINA SUNSINE

      The counter tended to move up on mid week but fell down eventually. Highest price was 0.405 over last week. RSI still above 50%, so buyer could still push higher for the counter.

(B) CIVMEC

      Price is consolidating for the counter meantime. Still valid for watchlist!

(C) M1

      Nice move from the counter! Highest point is > 3.95. RSI still >50%, so stronger move could be ahead.

Apr[1] - Lantrovision

COUNTER: Lantrovision
 
BUSINESS: 
The Singapore based company is principally engaged in the installation and maintenance of structured cabling systems (eg LAN, WAN). Major clients include banks and global MNC in the region.

OVERVIEW:
Last year July, 1-Net Singapore announced the launch of new data centre, 1-Net North. End of 2014, foreign player, Telekommunikasi (subsidiary of PT Telekocommunikasi Indonesia) was awarded to build 8000 sq meter side as data center so as to serve its growing customer. To strengthen Singapore's position as economic and infocomm hub, IDA, EDB and JTC have plans to develop a data centre park which is estimated to consist of  6-8 data centre buildings, targeted to be operational in early 2016. Looking at the trend of mushrooming data centres in the country, Lantronvision is deemed to be benefited especially with its position as domestic leading cabling system provider. Besides, the counter has exposure into overseas, such as Hong Kong, Taiwan, Thailand and India. It can be viewed as proxy of investment into rising demand of data centres in the regions.
 

REASONS TO BUY:
The company is in cash rich position of $77m which translates to ~ 60% of its market capitalization. It used to release $0.03/shares as annual dividend, so dividend yield is attractively >5% based on current trading price.

The counter doesn't have high trading volume, so it mainly belong to long term holding stock. Recent downfall present an good opportunity for bargain hunters. Generally local broker firms rate this counter with target price > $0.60/shares.

ENTRY PRICE
BUY  < $0.52 which is the support price formed since May of 2014.