Friday, July 15, 2011

July 2011 updates

Hi all, just some quick updates here.
On portfolio holdings
  • AEI still pending their results post new automotive parts plant in China of which I will decide to up or cut.
  • World precision is likely to see increased production capacity (est. RMB 300million annually costing RMB 400-500 million including land costs - I need to check the tonnage) in Liaoning which is close to Korea and Japan and a base for heavy machinery and shipping. At current PE levels, firm should have it easy to meet growth targets, in other words, it is still fairly undervalued. It was also reported that the World group entity reportedly has a large bulk of assets held under the unlisted entity and awaiting asset injection into the listed entity. However noted was also a slowdown in automotive and train transport investment by the Chinese government especially post illegal kickback scheme discovered. 
  • Nanyang Holdings, very illiquid as expected. Had some conversations with some fund managers and had some complaints on the old age of some board members, like 100+ yr olds? Anyway underlying thesis remains and requires some action to unlock. The massive undervaluation gives me some margin of safety that this will come sometime soon. 
  • Koon, acquired 51% of property agency and consulting firm, Global Property Strategic Alliance for S$3 million out of their S$20+ million cash hoard which is expected. I mentioned the firm is in need to recurring income as evident from acquisition of power plant business and property agency while it takes time to sort out the Vietnam Port Issue. Management has so far been rationale and I hope they will be able to streamline and focus efforts on key business segments rather than spread out thinly over numerous fields. So will continue to keep close tabs. To date, the Vietnam port remains a far out of money option, value of which reflects 0% probability of having the port deal.
  • Roxy Pacific, successful enbloc in 131 Mckenzie Rd using subsidiary RL Central pte ltd.Also sold off stake in 70 shenton way through subsidiary RL Properties pte ltd. Also bought more freehold land at Mukim (7 empty plots) and Hillview Terrace (7 buildings) through  RP Ventures pte ltd for S$45 million. Plot are is 49,164 sq ft with 1.92 plot ratio. Area is near Bukit Batok, near the nature reserve, very scenic place! Looks set that firm will maintain their sales and earnings momentum, and oh did I mention it seems something is brewing at their hotels business? I will continue to hang on to this.
Will write up some interesting things discussed with a friend of mine.