tag:blogger.com,1999:blog-24580823846141178982024-03-12T19:24:19.451-07:00Rosesyrup ResearchSingapore's High Risk High Return FundAnonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-2458082384614117898.post-31628623814183957712014-11-06T05:10:00.002-08:002014-11-06T05:10:42.242-08:00Understanding JCET Offer Price for StatsChip Pac StatsChips Pac was halted for the past few days and the result just came out this afternoon.<br />
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JCET offer USD $780 to buy all Statschip Pac Asset <u>except the Taiwan Subsidiaries</u>. In the notes to the announcement, it also stated that this is translated into <u>fully diluted offer price</u> of SGD $0.452 per share.<br />
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Following the announcement, retailers are confused as to how much should StatsChip Pac shares be traded, due to the following reason=><br />
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<li>The price of share traded on SGX is mark on an undiluted basis.</li>
<li>Price quoted on SGX include Taiwan Subsidiaries</li>
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The purpose of this post is to help retailers understand JCET's offer price on a (1) undiluted and (2) complete basis.</div>
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In the following image I used the geographical locations of Fixed Asset's book value (from StatsChip 2013 annual report) to estimate how much the Taiwan subsidiaries should worth under JCET offer.</div>
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<a href="http://1.bp.blogspot.com/-iOBN1WBnw_E/VFtxHV5xaGI/AAAAAAAAAFA/JAdDCmGDQPo/s1600/statstat.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-iOBN1WBnw_E/VFtxHV5xaGI/AAAAAAAAAFA/JAdDCmGDQPo/s1600/statstat.jpg" /></a></div>
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Estimation revealed that StatsChip Pac should be traded at $0.525 per share now. Although offer from JCET was not accepted by shareholders yet but high chance it will be accepted as Temasek hold more than half of the shares. </div>
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I am still holding on to some StatsChip Pac bought at a high of $0.63 <a href="http://rosesyrupresearch.blogspot.sg/2014/08/how-cheap-is-stats-chippac.html">(Click here for detail</a>), I will cut tomorrow.</div>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-35325178151770275022014-10-14T02:07:00.002-07:002014-10-14T02:07:52.904-07:00Performance Review: Valuetronic<div class="separator" style="clear: both; text-align: center;">
<span style="font-size: x-large;"><u><b>Performance Review On Valuetronic</b></u></span></div>
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<a href="http://3.bp.blogspot.com/-7VKGrLQhtMk/VDzlvmRlOYI/AAAAAAAAAEw/CaN8maY78tM/s1600/value.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-7VKGrLQhtMk/VDzlvmRlOYI/AAAAAAAAAEw/CaN8maY78tM/s1600/value.jpg" /></a></div>
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<b style="line-height: 18.2000007629395px;">Shorted Price: </b><span style="line-height: 18.2000007629395px;">$0.53 on 22nd July 2014 (<a href="http://rosesyrupresearch.blogspot.sg/2014/07/valuetronic-too-much-risks-to-ignore.html">refer to my sell call here</a>)</span><br /><br style="line-height: 18.2000007629395px;" /><b style="line-height: 18.2000007629395px;">Target price: </b><span style="line-height: 18.2000007629395px;">$0.34</span><br /><br style="line-height: 18.2000007629395px;" /><b style="line-height: 18.2000007629395px;">Buy-Back Price: </b><span style="line-height: 18.2000007629395px;">$0.32 Today</span><br /><br style="line-height: 18.2000007629395px;" /><b style="line-height: 18.2000007629395px;">Profit / Loss (after deducting Comm and Script borrowing cost):</b><span style="line-height: 18.2000007629395px;"> 63.5% over the tenure of 3 months</span><br /><br style="line-height: 18.2000007629395px;" /><br style="line-height: 18.2000007629395px;" /><u style="line-height: 18.2000007629395px;"><b>Comment:</b></u><br /><br style="line-height: 18.2000007629395px;" /><span style="line-height: 18.2000007629395px;">I have covered all my short position on Valuetronic. </span><span style="line-height: 18.2000007629395px;">It is a bonus that I am able to buy back 2 cents below my target price.</span></div>
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<span style="line-height: 18.2000007629395px;">I am very satisfy with the high profit of 63.5%, especially considering it was made over a short tenure of 3 months only.</span></div>
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<span style="line-height: 18.2000007629395px;">One friend asked me whether I think the current price is a good buy, my answer is no. Even though current price is below fair value, the safety margin is still too small to be of any comfort. Furthermore following the recent deep correction in stock market, there are lots of other opportunities offer much more attractive return per unit of risk than Valuetronic. I would give Valuetronic a miss at the current price.</span></div>
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<span style="line-height: 18.2000007629395px;">Cheers.</span></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-60067686673805393852014-09-30T01:51:00.000-07:002014-09-30T01:51:44.854-07:00Closing NobleIn my previous post this morning, I bought Noble for $1.29 for speculative play. (<a href="http://rosesyrupresearch.blogspot.sg/2014/09/speculating-on-noble.html">refer to previous post here</a>)<br />
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Target of $1.36 was not achieved. So I sold all my Noble holding @ $1.305 at end of the day.<br />
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Return=> Meager 0.7% after commission<br />
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<br />Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-11018518246982924382014-09-29T19:19:00.001-07:002014-09-29T20:14:13.347-07:00Speculating On Noble<div style="background-color: white; box-sizing: border-box; color: #333333; font-family: 'Helvetica Neue', HelveticaNeue, Arial, sans-serif; font-size: 14px; line-height: 19px; margin-bottom: 19px;">
Hi, Noble is drastically oversold today.</div>
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Given Noble Beta of 1.6===>>>> It should have fell around 2% today instead of the 7%.</div>
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Also Olam, a similar (not same business) only fell by 1.2%. Hardly in tandem with Noble's movement today.</div>
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I am betting it will recover by mid day.</div>
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Good Luck to me</div>
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Target 1.36<br />
Entry 1.29</div>
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Note that this trade is a speculation for quick gain. I have yet to do detail analysis on Noble. Follow at your own risk.</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-74429643130335699922014-09-15T02:17:00.003-07:002014-09-15T02:17:26.168-07:00China Jan.-Aug. housing sales down almost 11%<b>Source:</b> <a href="http://www.marketwatch.com/story/china-jan-aug-housing-sales-down-almost-11-2014-09-14">http://www.marketwatch.com/story/china-jan-aug-housing-sales-down-almost-11-2014-09-14</a><br />
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China Jan.-Aug. housing sales down almost 11%</h1>
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BEIJING--Housing sales in China in the first eight months of the year fell 10.9% to 3.43 trillion yuan ($559 billion), according to data from the National Bureau of Statistics issued Saturday.</div>
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Sales in the first seven months of the year were down 10.5% from a year earlier at 2.98 trillion yuan.</div>
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Property developers across the country have been struggling with weak sales, bulging inventories and tight credit conditions since the start of the year, and some authorities, mostly at the local level, have been loosening policies to support the sluggish market. Analysts and investors are closely watching for signs recovery in the housing market, which is an important driver of China's economic growth.</div>
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More than 30 local governments have loosened property restrictions such as limits on second home purchases, but buyers are staying on the sidelines because they expect prices to fall further on rising inventories.</div>
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Many Chinese property developers said in their first-half earnings reports that they expect to sell the bulk of their inventories in September and October, which are usually the peak months for property sales.</div>
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New construction starts in the January-August period measured by area fell 10.5% to 1.14 billion square meters. This compared with a decline of 12.8% to 982.3 million square meters in the first seven months.</div>
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Property investment in the first eight months of this year rose 13.2% to 5.90 trillion yuan, slowing down from the 13.7% growth in the first seven months. The investment figures are a lagging indicator, and reflect ongoing activity in projects that started last year. New construction starts grew 13.5% in 2013.</div>
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The statistics bureau doesn't give data for individual months.</div>
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Esther Fung, Liyan Qi</div>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-13350641398871815632014-09-12T10:15:00.001-07:002014-09-12T10:15:17.502-07:00European states struggle with Draghi's challenge<b><u>Source:</u></b> <a href="https://sg.finance.yahoo.com/news/european-states-struggle-draghis-challenge-081909375--finance.html">https://sg.finance.yahoo.com/news/european-states-struggle-draghis-challenge-081909375--finance.html</a><br />
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<span class="entry-title">European states struggle with Draghi's challenge</span></h1>
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Eurozone governments challenged to increase spending, shake up over-regulated economies</h2>
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MILAN (AP) -- Eurozone finance ministers on Friday said they were willing to help the European Central Bank in its plan to save the economy. How much they can do in practice, however, remains unclear.</div>
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The ministers met for the first time since ECB President Mario Draghi sketched out this month what has been dubbed "Draghinomics:" a three-pillared strategy including more stimulus from the central bank, added government spending and pro-business reforms to cut bureaucracy and make economies more productive.</div>
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The ECB covered the first pillar, offering a range of new stimulus measures at its last meeting. Governments from the 18 euro countries hold sway over the other two, but have been either reluctant or unable to act.</div>
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Jeroen Dijsselbloem, the Dutchman who heads the eurozone finance ministers' meetings, said Friday that governments are now ready to shift their focus from stabilizing financial markets to promoting growth.</div>
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Eurozone states, he said, should complement the ECB's efforts to boost the economy with "a credible mix of fiscal policies, structural reforms and investment."</div>
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"We all agree the euro area needs to increase this growth potential and create more jobs," Dijsselbloem said.</div>
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Europe's economy showed no growth in the second quarter. That followed four quarters of unsatisfying recovery from a crisis over high government debt. Unemployment remains at a painful 11.5 percent.</div>
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Draghi, sitting nearby, expressed satisfaction that there was agreement in the meeting that "to see investment return we need structural reform."</div>
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To get the economy going, governments will have to back up their words with actions. Some of the key reasons they have not so far:</div>
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—With tight EU rules on public deficits, there's little room for more government spending on projects that would help economic growth.</div>
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—The push for pro-business reforms in two of the more troubled countries, France and Italy, faces political headwinds.</div>
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—Germany, the dominant eurozone country, has backed calls for more investment spending, but excluded borrowing money to do it.</div>
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—There is talk of an EU-level investment fund to pay for infrastructure such as roads and bridges, but the details are far from filled in.</div>
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In Milan, the ministers' focus on reforms included the need to reduce the tax burden on labor, noting that the eurozone's overall tax burden is above the average for developed countries in large part due to the tax wedge on labor.</div>
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They did not, however, say they would ease European Union limits on borrowing. For some countries, borrowing more money to invest can help economic growth if the money is spent fruitfully.</div>
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EU rules limit national deficits to below 3 percent of GDP to ensure stability of the shared currency. Yet a strong focus on reducing deficits can choke off growth that is needed both to shrink debt and reduce unemployment.</div>
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Italy and others want to change how the EU calculates member states' deficits so that governments are allowed to keep some spending as long it helps economic growth, the EU official added. That idea has been opposed, however, by Jyrki Katainen, the new vice president of the European Union's executive commission, and by German Chancellor Angela Merkel.</div>
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Dijsselbloem ruled out any changes to the rules. He said they did not discuss a French request for more time to bring its deficit back below the 3 percent ceiling.</div>
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Italian Economics Minister Pier Carlo Padoan suggested a close focus on deficit limits was not appropriate at a time of economic weakness. He said that for Italy, bringing its deficit to 2.6 percent of GDP this year, as it currently aims to do, "was a goal compatible with a different macroeconomic picture."</div>
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As the meeting got under way, Italian Prime Minister Matteo Renzi sent a defiant tweet: "We respect the 3 percent. We are among the few who do. We therefore don't expect lessons from Europe but the 300 billion euros of investments."</div>
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Renzi referred to a European Commission proposal to get 300 billion euros ($388 billion) in public and private investment to revive the economy.</div>
<div style="background-color: white; font-family: Georgia, Times, 'Times New Roman', serif; font-size: 14px; line-height: 22.4640007019043px; margin-top: 11px; padding: 0px;">
Dijsselbloem said that issue would be taken up by the wider meeting of European Union finance ministers on Saturday.</div>
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___</div>
<div style="background-color: white; font-family: Georgia, Times, 'Times New Roman', serif; font-size: 14px; line-height: 22.4640007019043px; margin-top: 11px; padding: 0px;">
McHugh reported from Frankfurt, Germany. Juergen Baetz in Brussels contributed to this report.</div>
</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-22046198857624696282014-09-12T03:24:00.001-07:002014-09-12T03:24:19.295-07:00Magnus Energy Chief Sued by Broker Over Stock Rout<b><u>Source:</u></b><a href="http://www.bloomberg.com/news/2014-09-12/magnus-energy-chief-sued-by-broker-over-stock-rout.html"> http://www.bloomberg.com/news/2014-09-12/magnus-energy-chief-sued-by-broker-over-stock-rout.html</a><br />
<br />
<span style="background-color: white; color: #444444; font-family: proxima-nova, Arial, Helvetica, sans-serif; font-size: 54px; letter-spacing: -2.16000008583069px; line-height: 57.375px;">Magnus Energy Chief Sued by Broker Over Stock Rout</span><br />
<span style="background-color: white; color: #444444; font-family: proxima-nova, Arial, Helvetica, sans-serif; font-size: 54px; letter-spacing: -2.16000008583069px; line-height: 57.375px;"><br /></span>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
A <a class="web_ticker" density="sparse" href="http://www.bloomberg.com/quote/DBK:GR" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" ticker="DBK:GR" title="Get Quote" topic_url="http://topics.bloomberg.com/deutsche-bank-ag/">Deutsche Bank AG (DBK)</a> brokerage sued the managing director of <a class="web_ticker" density="full" href="http://www.bloomberg.com/quote/MAGE:SP" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" ticker="MAGE:SP" title="Get Quote" topic_url="http://topics.bloomberg.com/magnus-energy-group-ltd/">Magnus Energy Group Ltd. (MAGE)</a> in <a density="full" href="http://topics.bloomberg.com/singapore/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Singapore</a> to recover an unpaid trading debt.</div>
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Lim Kuan Yew owed DMG & Partners Securities Pte S$1.77 million ($1.4 million) for Blumont Group Ltd. and Asiasons Capital Ltd. shares bought in October, according to a lawsuit with the Singapore High Court. Singapore trading rules allow investors three days to pay for their stock purchases.</div>
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The Monetary Authority of Singapore and the police are investigating suspected stock-trading irregularities related to drops in Blumont, Asiasons and LionGold Corp. in early October 2013 that slashed $6.9 billion off the combined value of the shares. Magnus has been asked to assist in the probe, including providing electronic data and trading records of two executives.</div>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
Michelle Chia, a <a density="full" href="http://www.dmg.com.sg/page/site/public/english/html/fr_aboutus1.htm" rel="external" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" title="Open Web Site">DMG</a> spokeswoman, declined to comment. DMG is a venture between<a density="full" href="http://topics.bloomberg.com/malaysia/" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;">Malaysia</a>’s <a class="web_ticker" density="sparse" href="http://www.bloomberg.com/quote/RHBC:MK" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" ticker="RHBC:MK" title="Get Quote" topic_url="http://topics.bloomberg.com/rhb-capital-bhd/">RHB Capital Bhd (RHBC)</a> and Deutsche Bank. Lim, who also traded in LionGold shares, according to court papers, didn’t answer four phone calls to his office.</div>
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Magnus Energy has said its business won’t be affected by the probe. Magnus Energy fell 7.7 percent to 1.2 Singapore cents as of 12:01 p.m. in trading in the city, extending this year’s slump to 64 percent.</div>
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DMG’s lawyers have tried unsuccessfully on three occasions to serve the lawsuit on Lim in Singapore, according to court papers filed last month. The brokerage said in court papers it’s attempting to serve Lim in Malaysia, where he’s believed to be residing.</div>
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Asiasons, Blumont and LionGold have said they don’t know what caused the sudden declines, which spurred brokers to clamp down on margin lending and dented trading sentiment.</div>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
<a class="web_ticker" density="sparse" href="http://www.bloomberg.com/quote/VALSP:IND" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" title="Get Quote">Stock trading</a> volume in the city tumbled about 32 percent from a year earlier to a daily average of S$1.05 billion this year through yesterday, data compiled by Bloomberg show.</div>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
The case is DMG and Partners Securities v Lim Kuan Yew, S694/2014. Singapore High Court.</div>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
To contact the reporters on this story: Andrea Tan in Singapore at <a density="mailto" href="mailto:atan17@bloomberg.net" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" title="Send E-mail">atan17@bloomberg.net</a>; Jonathan Burgos in Singapore at <a density="mailto" href="mailto:jburgos4@bloomberg.net" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" title="Send E-mail">jburgos4@bloomberg.net</a></div>
<div style="background-color: white; box-sizing: border-box; color: #2d2b2c; font-family: akzidenz-grotesk-std-bloom, Arial, Helvetica, sans-serif; font-size: 1.1em; line-height: 1.3125em; margin-bottom: 28px;">
To contact the editors responsible for this story: Douglas Wong at <a density="mailto" href="mailto:dwong19@bloomberg.net" style="box-sizing: border-box; color: #003399; cursor: pointer; font-weight: 700; outline: none; text-decoration: none;" title="Send E-mail">dwong19@bloomberg.net</a>Dave McCombs, Terje Langeland</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-19641766583249352252014-09-12T03:20:00.003-07:002014-09-12T03:20:51.041-07:00Blumont takes 43% stake in uranium miner<u><b>Source: </b></u><a href="http://www.businesstimes.com.sg/premium/companies/others/blumont-takes-43-stake-uranium-miner-20140912">http://www.businesstimes.com.sg/premium/companies/others/blumont-takes-43-stake-uranium-miner-20140912</a><br />
<br />
<span style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 24px; font-weight: bold;">Blumont takes 43% stake in uranium miner</span><br />
<span style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 24px; font-weight: bold;"><br /></span>
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<div style="background: rgb(255, 255, 255); border: 0px; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px; padding: 8px 0px; vertical-align: bottom;">
BLUMONT Group now holds a 43.08 per cent stake in privately held uranium miner Azarga Resources after converting US$19.1 million worth of convertible notes.</div>
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The notes were converted into Azarga stock at 50 US cents per share. Azarga is not listed, so there is no open-market price available for the shares.</div>
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The notes were issued as part of a convertible facility provided by Blumont's wholly-owned subsidiary Powerlite Ventures to Azarga, under which Azarga could draw up to US$21 million in cash.</div>
<div style="background: rgb(255, 255, 255); border: 0px; font-family: Arial, Helvetica, sans-serif; font-size: 13px; line-height: 19.5px; padding: 8px 0px; vertical-align: bottom;">
As part of the facility, Azarga will issue convertible notes to Powerlite upon drawing down the facility, with the notes to be eventually converted to Azarga shares at 50 US cents per share.</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-31644478632940148042014-09-11T21:54:00.001-07:002014-09-11T21:55:49.909-07:00Follow Up On JAPFA<div style="text-align: center;">
<u><b>Follow Up On JAPFA</b></u></div>
<div style="text-align: center;">
<u><b><br /></b></u></div>
<div style="text-align: center;">
<b>This post is drafted for a friend who followed me on JAPFA</b></div>
<div style="text-align: left;">
<b><br /></b></div>
<div style="text-align: left;">
<b><br /></b></div>
<div style="text-align: left;">
<b>My Message to him is as follow:</b></div>
<div style="text-align: left;">
<b><br /></b></div>
<div style="text-align: left;">
</div>
<ol>
<li><div style="text-align: justify;">
I have not sold any of my 25 lots of Japfa. And I will formal post a performance review if I ever sell it.</div>
<div style="text-align: justify;">
<br /></div>
</li>
<li><div style="text-align: justify;">
Japfa reached a height of 94cents before plunging back to current price, and I see 2 main reasons for this:</div>
<div style="text-align: justify;">
<br /></div>
</li>
<ul>
<li><div style="text-align: justify;">
Japfa posted 34% decline in profit in 1H. This is pretty much expected for a newly listed firm. Most business prior to listing would manage their earning to secure the best possible valuation after which they will take a big bath to write down all previous losses. But longer term wise, this is still a profitable business due to a favorable industry setup. More analysis on the industry is available from <a href="http://www.thejakartapost.com/news/2014/09/11/analysis-poultry-sector-hatching-golden-eggs.html">this article </a>.</div>
<div style="text-align: justify;">
<br /></div>
</li>
<li><div style="text-align: justify;">
Fear of Fed might be hiking interest rate, which might cause a currency crisis in developing countries. A few nations and Indonesia who have weak reserve become the likely target. I have already mentioned this risk in my earlier assessment of Japfa (refer to it <a href="http://rosesyrupresearch.blogspot.sg/2014/08/valuing-japfa.html">here</a>). Despite the fact that Indonesia was attacked several times in the recent years, I do not foresee a full scale currency flight happening in Indonesia as Fed is pretty responsible this time round. At least it has the courtesy to announce the date at which QE program would be tapered. According to Economic Theories, such announcement allows investors in developing nations to retreat orderly instead running for exit.</div>
<div style="text-align: justify;">
<br /></div>
</li>
</ul>
<li><div style="text-align: justify;">
I am usually a longer term investor with time frame ranging from 3 months to 1 year. Thus shorter term fluctuation usually isn't much of a problem to me.</div>
<div style="text-align: justify;">
<br /></div>
</li>
<li style="text-align: justify;">I am a price taker:My portfolio size is small and diversified, that means I can't move the market. My strategy only entails the following:</li>
<ul>
<li style="text-align: justify;">Trying to foresee possible prospects which the market fails to foresee. </li>
<li style="text-align: justify;">Picking the right counters</li>
<li style="text-align: justify;">Wait for the market to see what I saw. (usually only when news start to report)</li>
<li style="text-align: justify;">Let the market push the price to where I am aiming</li>
<li><div style="text-align: justify;">
I take the profit.</div>
<div style="text-align: justify;">
<br /></div>
</li>
</ul>
<li style="text-align: justify;">Short term market fluctuation tend to base upon sentiment which I have no control on. Take First Sponsor as an example, I have shorted at $1.44 and expected it to fall till $0.94 within 2 weeks (You can refer to my call on <a href="http://rosesyrupresearch.blogspot.sg/2014/07/first-sponsor-initial-assessment.html">First Sponsor here</a>). As soon as the counter got listed, price indeed moved down quickly and decisively. The management soon came in to shore up confidence by buying shares from the market. While First Sponsor's bad fundamental does not improve just because of their actions, they do improved the market sentiment and prevented the share price from falling further. As a result price now stuck at $1.27 and the only thing I could do is to wait for market to return to its rationality.</li>
</ol>
<div>
<br />
Fundamental always prevail in long term.</div>
<div>
<br /></div>
Cheers<br />
<br />
<br />
<br />
<br />
<div style="text-align: left;">
<b><br /></b></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com5tag:blogger.com,1999:blog-2458082384614117898.post-42191880881910731282014-09-11T00:55:00.002-07:002014-09-11T00:55:28.866-07:00Guest post: China’s problem is not property oversupply, but too few modern homes<u><b> Source:<a href="https://www.blogger.com/goog_1354624567"> </a></b></u><a href="http://blogs.ft.com/beyond-brics/2014/09/10/guest-post-chinas-problem-is-not-property-oversupply-but-too-few-modern-homes/">http://blogs.ft.com/beyond-brics/2014/09/10/guest-post-chinas-problem-is-not-property-oversupply-but-too-few-modern-homes/</a><br />
<br />
<h2 class="entry-title" style="background-color: #fff1e0; font-family: Georgia, 'Times New Roman', Times, serif; font-size: 1.563em; font-weight: 400; line-height: 32px; margin: 0px 0px 0.25em; padding: 0px;">
Guest post: China’s problem is not property oversupply, but too few modern homes</h2>
<div class="entry-meta byline clearfix" style="background-color: #fff1e0; color: #777777; font-family: Arial, Helvetica, sans-serif; font-size: 0.75em; line-height: 1.4; margin-bottom: 4px; position: relative; zoom: 1;">
<span class="posted-on entry-date" style="display: block; float: left; height: 20px; margin-right: 7px;">Sep 10, 2014 6:36pm</span><span class="author_byline"><a href="http://blogs.ft.com/beyond-brics/author/guestwriter/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">by guest writer</a></span></div>
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display: block !important; float: left !important; height: 18px !important; margin-right: 4px !important; padding-right: 4px !important;"><span class="IN-right" id="li_ui_li_gen_1410475996251_1-inner" style="background-color: transparent !important; background-image: url(https://static.licdn.com/scds/common/u/images/apps/connect/sprites/sprite_connect_v14.png) !important; background-position: 0px -60px !important; background-repeat: no-repeat !important; display: block !important; float: left !important; padding-left: 8px !important;"><span class="IN-right" id="li_ui_li_gen_1410475996251_1-content" style="color: rgb(4, 85, 139) !important; display: inline !important; font-family: Arial, sans-serif !important; font-size: 11px !important; font-weight: bold !important; line-height: 18px !important; padding: 0px 5px !important;">0</span></span></span></span></span></span></span></span><span class="inferno-counter social-counter" style="display: block; float: left; margin-right: 10px; padding-bottom: 18px;"><a class="livefyre-commentcount" data-lf-article-id="02d9039d-2b99-372d-a9a8-139f335c7d1c" data-lf-site-id="350840" href="http://blogs.ft.com/beyond-brics/2014/09/10/guest-post-chinas-problem-is-not-property-oversupply-but-too-few-modern-homes/#respond" style="-webkit-font-smoothing: antialiased; background: url(http://blogs.ft.com/wp-content/themes/falcon/img/socialcounters/inferno-counter.png) 0px 50% no-repeat; border-width: 0px; color: #2e6e9e; display: block; font-weight: 700; height: 20px; line-height: 20px; padding-left: 78px; text-align: center; text-decoration: none; width: 32px;" title="Comment on Guest post: China’s problem is not property oversupply, but too few modern homes">1</a></span></div>
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<a href="http://blogs.ft.com/beyond-brics/files/2014/09/raf.png" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;"><img alt="" class="alignnone size-full wp-image-1850882" height="224" src="http://blogs.ft.com/beyond-brics/files/2014/09/raf-e1410368715484.png" style="border: 0px; float: left; margin: 5px 10px 5px 0px; max-width: 100%;" width="220" /></a><em>By Rafael Halpin, <a href="http://www.ftchinaconfidential.com/" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">China Confidential</a></em></div>
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For a sector regularly called “the most important in the universe”, there is a remarkable lack of consensus over the Chinese housing market. Much of the debate boils down to whether China is currently under- or over-supplied with homes.</div>
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The absence of any comprehensive data on just how many houses there are in China, has led to wildly divergent views. But, as we will seek to demonstrate in this article, despite the lack of any solid data on the total number of homes in China, it is still possible to present a <a href="http://www.ftchinaconfidential.com/Report-Archive/2014-08-28-Report/China-s-housing-shortage-persists?ct=true" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">strong statistical case that the market is currently under-supplied with modern housing.<span id="more-1850852"></span></a></div>
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While data on the housing market is patchy in many areas, China’s National Bureau of Statistics (NBS) does publish information on the number of ‘commodity’ houses that the country has. Commodity homes are independent, modern units, built after reforms to establish a private housing market were introduced in the late-1990s. According to the NBS, by the end of 2012 (the most recent year for which data has been published), China had built 60m of these units.</div>
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The remainder of China’s housing stock can be split into two areas. Firstly, there are ‘legacy’ homes, which were built by the state before the introduction of a private housing market. They are generally of poor construction; China’s own housing ministry admitted that “houses built between 1979 and 1999 cannot meet the demands of modern living”. The second area is off-market houses; units built after the private housing market was established, but not sold on the market. These are mainly small-scale affordable houses (with an average unit size of around 60 square metres) or temporary worker dormitories.</div>
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According to the NBS, China’s permanent urban population (residents with an urban<em>hukou</em>) was 480m by the end of 2012. The NBS also publishes data on the average urban household size, which in 2012 was 2.86 persons per household. This implies that by the end of that year, there were 168m permanent urban households. This figure doesn’t include migrant workers, a still marginal source of housing demand in China; only 1 per cent owned their own home in 2012, according to the NBS.</div>
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<span style="font-weight: 700;">Quality is key in the housing supply</span>A straight forward comparison of this data with the number of commodity houses available suggests that, by the end of 2012, there were only enough commodity houses for 36 per cent of the permanent urban population.*By implication, the remaining 64 per cent lived in sub-standard off-market or legacy housing.</div>
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By focusing on the quality of China’s housing stock – and sidestepping the contentious question of its size – there is, therefore, a strong case that the market is currently under-supplied, with a chronic shortage of modern homes. If, as some are predicting, construction activity in China was to collapse, the remarkable improvement in the standard of living of China’s urbanites over the past 30 years would be hobbled, with the majority of the urban population remaining in substandard accommodation.</div>
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How does this square with the current slowdown in the housing market? That a large part of demand for housing in China is from people looking to move to bigger and better accommodation, in fact, goes some way to explaining this downturn. Upgrading demand is highly opportunistic in nature. If, as is the case at the moment, price expectations are negative or mortgages are expensive, much of this potential demand will withdraw from the market. In the absence of these buyers, less opportunistic demand from newly-created households is not on a large enough scale to prop up the market. Since 2008, the number of new commodity houses has, on average, exceeded the net increase in permanent urban households by 2m units per year.</div>
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In theory, this upgrading demand will, at some stage, return to the market. In particular, lower home prices should put bigger and better accommodation within the reach of more people, and resolve the problem of affordability which is currently holding back some of these potential buyers. This suggests that fears of an imminent collapse in China’s housing market may be overblown.</div>
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<span style="font-weight: 700;">Property vulnerabilities mount as the market cools</span>The problem, however, is that as the Chinese housing market cools, its vulnerabilities intensify. Chief among these is the vast number of empty houses, particularly in smaller cities. Speculation in the housing market is rife: we estimate that by 2013, <a href="http://www.ftchinaconfidential.com/Report-Archive/2014-08-28-Report/China-s-housing-shortage-persists" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">20 per cent of the urban housing stock was vacant</a>, with more than 90 per cent of these empty units purchased by individuals for investment purposes. As we have demonstrated, there is sufficient demand to absorb these houses– even if these units were fully occupied, there would still only be enough modern homes for 36 per cent of the urban population – but a sudden influx, rather than steady drip of these properties onto the market would be disastrous.</div>
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Such is the danger of a prolonged downturn in China’s housing market; holders of empty units panicking and trying to sell their properties en-masse, leading to a price rout and further discouraging potential buyers. With the real estate sector estimated to account for <a href="http://www.ftchinaconfidential.com/Report-Archive/2014-06-19-Report/Shadow-finance-slowdown-intensifies" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">over 40 per cent of shadow bank lending</a>, a prolonged slowdown also threatens to destroy a fragile web of financing, with repercussions for the entire economy.</div>
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In China’s housing market, strong underlying fundamentals, therefore, coexist with equally substantial risks. The government may well be able to stimulate upgrading demand to mitigate these risks, but home buying sentiment is notoriously difficult to dictate, and a market panic can quickly become self-perpetuating. The issue of whether China’s housing market is currently under- or over-supplied is perhaps much clearer than many think, but the future of the sector is still wide open to debate.</div>
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*In reality, part of the increase in the permanent urban population over the past decade has been due to the expansion of towns and cities into rural areas. Arguably, this has not generated demand for urban houses given that these rural residents, who have been reclassified as urban, already have homes. Up to 30 per cent of the increase in the number of permanent urban households is due to this reclassification, according to academic studies. Even if this part of the urban population is excluded from our calculations, there are still only enough commodity houses for 39 per cent of the remaining households.</div>
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<em>Rafael Halpin is Head of Quantitative Research at FT Confidential, a research service at the Financial Times</em></div>
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<a href="http://blogs.ft.com/beyond-brics" style="-webkit-font-smoothing: antialiased; border-width: 0px; color: #2e6e9e; text-decoration: none;">Back to beyondbrics</a></div>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-52552301150719617842014-09-09T21:44:00.005-07:002014-09-09T21:54:37.367-07:00Performance Review: POSH (PACC)<h3 class="post-title entry-title" itemprop="name" style="color: #29aae1; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 18px; font-stretch: normal; margin: 0px; position: relative;">
<u style="background-color: white; color: #333333; font-size: 13px; line-height: 18.2000007629395px;"><b>Performance Review On POSH (PACC)</b></u></h3>
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<a href="http://3.bp.blogspot.com/-zqFn8ufrw04/VA_W9bMboyI/AAAAAAAAAEc/bRT866UWDX4/s1600/bandicam%2B2014-09-10%2B12-29-50-522.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-zqFn8ufrw04/VA_W9bMboyI/AAAAAAAAAEc/bRT866UWDX4/s1600/bandicam%2B2014-09-10%2B12-29-50-522.jpg" /></a></div>
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<b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Shorted Price: </b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">$1.13 on 22nd July 2014 (<a href="http://rosesyrupresearch.blogspot.sg/2014/07/posh-pacc-initial-assessment.html">refer to my sell call here</a>)</span><br />
<br style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;" />
<b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Target price: </b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">$0.86</span><br />
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<b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Buy-Back Price: </b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">$0.890 Today</span><br />
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<b style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Profit / Loss (after deducting Comm and Script borrowing cost):</b><span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;"> 25.47% over the tenure of 9 weeks</span><br />
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<u style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;"><b>Comment:</b></u><br />
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">I have covered all my short position on POSH (PACC). </span></div>
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;"><br /></span></div>
<div class="post-body entry-content" id="post-body-3357050370952614506" itemprop="description articleBody" style="position: relative; width: 926px;">
<span style="background-color: white;"><span style="color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: x-small;"><span style="line-height: 18.2000007629395px;">My buy-back price of $0.89 is near my target price of $0.86. Although I could have waited it to reach my Target price before closing, 3 cents is negligible and the additional higher script borrowing cost might not be worthwhile. Meanwhile the marine industry has started to show sign of recovery, it is safer to cover any short position now to avoid any head wind.</span></span></span></div>
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;"><br /></span></div>
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Overall profit of 25.47% is good considering it was made over a mere tenure of 9 weeks.</span></div>
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<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Cheers.</span></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com2tag:blogger.com,1999:blog-2458082384614117898.post-42045181513986677332014-09-07T22:07:00.000-07:002014-09-07T22:07:01.098-07:00Busy Till December Hi Friends,<br />
<br />
I am currently busy with a 3 months project which will impact my year end bonus.<br />
<br />
I will still try to reply any email or request ASAP but my apology for not being able to do it immediately.<br />
<br />
Meanwhile I look forward for more sharing from readers.<br />
<br />
<br />
<img height="514" src="http://tropeonarope.files.wordpress.com/2011/10/sadpenguin.png?w=300&h=240" width="640" />Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-91444616367686851012014-09-05T05:40:00.002-07:002014-09-05T05:41:36.170-07:00Follow Up On IREIT Global<div style="text-align: center;">
<b><u><span style="font-size: x-large;">Follow Up On IREIT Global</span></u></b></div>
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<br />
Hi Friends,<br />
<br />
<br />
In my previous post, I sold my IREIT Global at 89.5cents (Refer to<a href="http://rosesyrupresearch.blogspot.sg/2014/08/performance-review-ireit-global.html"> performance review here</a>). Although I made a small gain of 0.58%, the price at which I sold was still a far cry from my original target price of $1.06 (Refer to <a href="http://rosesyrupresearch.blogspot.sg/2014/08/rosesyrup-research-comprehensive.html">initial analysis here</a>). As I had said in my performance review,<i> the reason for selling prematurely was to take shelter from Quantitative Easing (QE) from European Central Bank (ECB).</i><br />
<i><br /></i>
Today is the 8th day since I sold my IREIT Global, as expected ECB announced its decision to cut benchmark rate from the current 0.15% to 0.05% (Refer to the <a href="https://sg.finance.yahoo.com/news/asian-shares-euro-fall-dollar-rallies-ecb-move-085422854--finance.html">news here</a>). As a result of the QE, Euro dollar depreciated deeply aganist SGD (refer to the following chart).<br />
<br />
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<a href="http://1.bp.blogspot.com/-1cK432G7byg/VAmteiALsCI/AAAAAAAAAEM/Tt2U8UA7pMk/s1600/bandicam%2B2014-09-05%2B08-36-35-445.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-1cK432G7byg/VAmteiALsCI/AAAAAAAAAEM/Tt2U8UA7pMk/s1600/bandicam%2B2014-09-05%2B08-36-35-445.jpg" /></a></div>
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The consequence of depreciating Euro is a fall in yield and net worth of IREIT Global. If the market is efficient, we should see this being reflected in the price of IREIT Global. I am glad that I made the right decision to sold my shares earlier.<br />
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While most the recommendations made by this blog involve betting against the market (with the believe that market is inefficient), it is never the aim of Rosesyrup Research to bet against Macro-Economic forces.<br />
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Cheers to those who follow this blog.Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com5tag:blogger.com,1999:blog-2458082384614117898.post-17892776112484490232014-09-04T07:17:00.001-07:002014-09-04T07:17:29.829-07:00Exclusive high-end realty market bucks China's housing problems<b><u><br /></u></b>
<b style="text-decoration: underline;">Source: </b><a href="http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140904000090&cid=1202">http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140904000090&cid=1202</a><br />
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Exclusive high-end realty market bucks China's housing problems</h1>
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A model of apartments in Hangzhou, Sept. 2. (File photo/Xinhua)</div>
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Despite the government lowering restrictions to unprecedented levels, the high-end realty market has continued to boom while the low-end market flounders, according to the Chinese-language Global Entrepreneur magazine.</div>
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In the first seven months this year, 3,885 new houses priced at 5 million yuan (US$810,000) or above were sold in Beijing at an average price of 41,242 yuan/square meter (US$6,720), up 7.4% year-on-year. Furthermore, 232 houses priced 20 million yuan (US$3.3 million) or higher were bought, up 13.7% year-on-year. The average transaction price for new houses in the city, on the other hand, dropped 8.2% to 13,623 yuan/square meter (US$2,220).</div>
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China's housing market has been weighed down by an overwhelming number of residences against a tight credit policy. Fortunately, this has not deterred the purchasing power of those interested in the luxury house market. Buyers are able to fork over as much as 60% of their own funds in a purchase, compared with 35% for buyers at the medium- and low-end sectors.</div>
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Zheng Haiyian, analyst at Landz Estate, a luxury-housing broker, noted that with many municipal governments having eased the restriction on housing purchases, the overall housing market has picked up. Luxury housing, with limited supply, has retained a stable demand, according to the magazine.</div>
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Zhu Jia, chairman of Sun Real Estate in Beijing, said the most popular luxury houses are those featuring a high price/performance ratio and unique resources, on top of low carbon emissions, low environmental impact and a layout conducive to social gatherings. Price is a less sensitive issue for buyers in this segment, according to the report.</div>
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In general, the luxury housing market is stable and thwarts the price fluctuations normally damaging to the rest of the country's real estate.</div>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-73504094807812492722014-09-02T23:04:00.002-07:002014-09-02T23:05:08.994-07:00Another Chinese Article (On Ying Li International Real Estate)<span style="background-color: white; color: #333333; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 13px; line-height: 18.2000007629395px;">Found this article written in Mandarin (sorry can't find any English version of the article)</span><br />
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<b>Source: </b><a href="http://cq.focus.cn/news/2014-09-02/5477870.html">http://cq.focus.cn/news/2014-09-02/5477870.html</a><br />
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<h1>
首席新加坡风情社区 英利狮城花园将圆梦山城</h1>
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每每说到花园城市,人们首先想到的一定是新加坡。新加坡又叫做狮城,因其干净、自由、阳光的生活氛围而闻名于世。而能生活在新加坡一样的美丽花园国度,则是众多现代城市精英人群孜孜以求的优居梦想。近日,有着城市地标专家美称的英利国际置业荣耀降临北部新区机场路,以26万方低密度花园品质社区——英利狮城花园,圆全城名流一个生态宜居梦。<!-- adv_tag --><br />
<b>雄踞“奥宜麦”千亿商圈核心</b><br />
<b> 圆精英一个繁华梦</b><br />
“随着各大国际性大卖场的投入使用,麦德龙—宜家-奥特莱斯国际商圈完美成型,其核心区域以英利狮城花园为代表的稀缺物业价值将得到进一步提升。”一业界人士认为,今年3月27日宜家家居已经开业。“奥宜麦”千亿商圈已经繁华呈现,将为重庆人提供高品质的国际化生活,随着商圈进一步发展和扩容提质,该区域也将成为重庆主城最时尚、最潮流的国际生活圈。<br />
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西部奥特莱斯实景图</div>
该人士介绍,英利狮城花园位于“奥宜麦”商圈核心,区位位置极其优越。该区域素有重庆“首席富人区”的美称,聚集了上百万的高端富裕人群。土地的稀缺性与旺盛高端住宅消费需求不成正比,占据黄金地段的风情洋房更是成这一区域的“香饽饽”。此次英利狮城花园的面世,将为高富菁英打造一个坐享千亿商圈的繁华宜居梦。<br />
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英利狮城花园中庭湖心效果图</div>
<b>低密度新加坡风情社区绽放</b><br />
<b> 圆山城一个花园梦</b><br />
据了解,不负花园城市美名的英利狮城花园可谓未售先火,吸引广大高富阶层的关注。因为有着纯正新加坡血统,项目自设计初始就以新加坡为蓝本打造。园林景观上,以鱼尾狮风情园、裕廊湖、丘吉尔庄园、桑菲尔庄园、海德花园五大景区演绎璀璨花园城市风情。以超高绿化率、海量车位匹配,打造低密度宜居原味新加坡风情社区。物业上,以国际一流的新加坡物管为典范,让业主尊享极致的物业服务。<br />
“之前在新加坡有留过几年学,回来后就一直念念不忘。主要是那边干净的空气、花园般的城市街道深深的吸引了我。这次真没想到重庆也有这么高品质的新加坡风情洋房社区,楼盘只要一上市,我应该就会去认购。”有着新加坡留学背景的赵小姐向记者说道。<br />
据悉,英利狮城花园套内88-166㎡新加坡风情洋房近期将荣耀面世,届时,售楼部与样板示范区也将同步对外开放。</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-43153852782214295252014-09-02T02:24:00.004-07:002014-09-02T02:31:51.642-07:00Ying Li looks to widen property portfolio to Beijing, Shanghai<span style="background-color: white; font-family: Arial, Helvetica, sans-serif;"><b>Source</b>: </span><span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://www.businesstimes.com.sg/breaking-news/singapore/ying-li-looks-widen-property-portfolio-beijing-shanghai-20140902">http://www.businesstimes.com.sg/breaking-news/singapore/ying-li-looks-widen-property-portfolio-beijing-shanghai-20140902</a></span><br />
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<span style="background-color: white; font-family: Arial, Helvetica, sans-serif; font-size: 24px; font-weight: bold;">Ying Li looks to widen property portfolio to Beijing, Shanghai</span><br />
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INGAPORE-LISTED Chongqing commercial developer Ying Li International Real Estate could begin diversifying its property portfolio to Shanghai and Beijing by the end of this year.</div>
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Said James Pan, Everbright head of real estate investment and fund raising: "Chongqing is a very important market especially for Ying Li, where it has built up a strong reputation and a brand name.</div>
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"On the other hand, the market is providing us with a window, because it has slowed down and developers are cautious on land acquisitions.</div>
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"With Everbright's network, capital and strong execution, and with significantly reduced gearing and fresh capital for Ying Li, we will have a chance to enter Tier 1 cities."</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-72292905346376633542014-09-02T01:19:00.001-07:002014-09-02T01:19:27.617-07:00Alternative View On JapfaHi All,<br />
<br />
A fellow blogger sent me the following link to his alternative view on JAPFA.<br />
<br />
<span style="background-color: white; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.2000007629395px; text-align: justify;"><u><b><span style="color: red; font-size: x-large;"><br /></span></b></u></span>
<span style="background-color: white; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.2000007629395px; text-align: justify;"><u><b><span style="color: red; font-size: x-large;">http://chemiccapital.blogspot.sg/</span></b></u></span><br />
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<br />
I thank the contributor for his effort.<br />
<br />
<br />
And I look forward for more sharing from everyone.<br />
<br />
<br />
For JAPFA !Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-88535464789807598982014-08-31T22:34:00.000-07:002014-08-31T23:36:11.184-07:00How Cheap Is STATS ChipPac?<div style="text-align: center;">
<u><b><span style="color: red; font-size: x-large;">Rosesyrup Research</span></b></u></div>
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<u><b><span style="font-size: large;">How Cheap Is STATS ChipPac?</span></b></u></div>
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<u><b><span style="color: red;">Target price: $1.64 + (Possible Control Premium)</span></b></u></div>
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<u><b><span style="color: red;">Upside: 124%</span></b></u></div>
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<u><b><span style="color: red;">Call: Buy for Risk Arbritage Only !</span></b></u></div>
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I received 7 requests to value this firm, STATS ChipPac, which has a business in packaging processor chips. The company has recently received 2 potential takeover offers from two Chinese firms, though one of them has already dropped out from the negotiation (read the news <a href="http://www.straitstimes.com/news/business/companies/story/stats-chippac-says-chinese-bidders-have-approached-it-acquisition-2014">here</a>). As a result of the potential M&A, the company share price has nearly doubled after the news was released. </div>
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<b><u>Valuation</u></b></div>
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The purpose of this write up is to value STATS ChipPac and estimate the potential price the Chinese acquirer is likely to pay in the event of an agreement is reached on the M&A.</div>
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<b><u>Model: </u></b>FCFF</div>
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Assume growth of 8% till 2016 and 3.9% therefore. Growth rates are forecast by Chips industry experts.</div>
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<a href="http://4.bp.blogspot.com/-KBBYQhx7gkI/VAQB4NTAl3I/AAAAAAAAAD8/wOM4gpahlZ8/s1600/bandicam%2B2014-09-01%2B01-23-38-742.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-KBBYQhx7gkI/VAQB4NTAl3I/AAAAAAAAAD8/wOM4gpahlZ8/s1600/bandicam%2B2014-09-01%2B01-23-38-742.jpg" /></a></div>
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The result of my calculation is pretty reasonable and conservative due to the following reason: </div>
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<li>The growth rate of 8% and 3.9% are really estimate for the European and US market. According to the experts, Asia firm will do much better and STATS ChipPac's business is largely located in Asia. Thus the growth rates I used are conservative.</li>
<li>Temasek Holding paid $1.75 for STATS ChipPac in 2007. This is pretty much close to our target price of $1.64. It was higher than our target price probably due to control premium Temasek paid for owning majority (83%) share in the company.</li>
<li>Like Temasek, the China Acquirer would need to pay a control premium above $1.64 in order to acquire huge amount of STATS ChipPac share from Temasek.</li>
<li>China Huatian, one of the potential acquirer dropped out of the bid citing "<span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;">acquisition conditions were not favourable" as the reason (read the news article <a href="http://www.reuters.com/article/2014/08/29/hua-tian-chippac-idUSL3N0QZ3OV20140829">here</a>). Being "not favourable" probably mean that the acquisition price quoted to Huatian is much higher than what the share is currently trading now. This is in line with our target price which show that STATS ChipPac is really worth 124% than currently price.</span></li>
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<b><u><span style="font-size: 15px; line-height: 23px; text-align: justify;"><span style="font-family: georgia, times new roman, serif;">Recommendation</span></span><span style="font-family: georgia, times new roman, serif;"><span style="font-size: 15px; line-height: 23px;"> </span></span></u></b></div>
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<li><b><u>Risk Arbritage strategy:</u></b> Buy the counter now in expectation that <span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;"> Jiangsu Changjiang </span><span class="mandelbrot_refrag" style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;"><span style="cursor: pointer;">Electronics</span></span><span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;"> Technology Co will ultimately accept Temasek Holding's offer and buy STATS ChipPac.</span></li>
<li><span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;">If the negotiation fails and no longer any party is interested in STATS ChipPac, sell the stock and cut losses. </span></li>
<li><span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;">Do not hold for long term, because the industry STATS ChipPac is in is highly competitive and often more favourable to new entrant than incumbents. You can read more about the industry dynamics from <a href="http://www.fool.sg/2014/08/29/is-there-any-value-left-in-stats-chippac-ltd/">Motley Fool Article here</a>.</span></li>
<li><span style="background-color: white; font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; text-align: start;">For me personally, I will only put in small amount of capital (10k or less) and I am prepared to cut once the talk fails. </span></li>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-14690272255162813882014-08-31T06:02:00.000-07:002014-08-31T06:02:34.540-07:00(Chinese Article On) Ying Li International Real EstateFound this article written in Mandarin (sorry can't find any English version of the article)<br />
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Source: <a href="http://cq.focus.cn/news/2014-08-29/5463578.html">http://cq.focus.cn/news/2014-08-29/5463578.html</a><br />
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<h1>
26万方新加坡风情洋房受热捧</h1>
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在重庆,一提到英利地产,大多数人脑海会浮现出未来国际、纽约纽约等一栋栋城市商业地标建筑。作为重庆首家新加坡上市的品牌房企,英利地产一直以载入史册的建筑作品书写着地标专家的商业传奇,在业内更是有着“商业教父”的美誉。近期,英利地产再次聚焦了全城都市精英的目光,以26万方新加坡风情洋房社区的创新之作——<a data-tip="" href="http://cq.focus.cn/votehouse/3024.html" p_id="3024" style="position: relative; z-index: 2;" target="_blank">英利狮城花园</a><br />
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<a data-tip="" href="http://cq.focus.cn/votehouse/3024.html" p_id="3024" style="position: relative; z-index: 2;" target="_blank"><s></s></a><div class="bd">
<a data-tip="" href="http://cq.focus.cn/votehouse/3024.html" p_id="3024" style="position: relative; z-index: 2;" target="_blank"></a><div class="tit">
<a data-tip="" href="http://cq.focus.cn/votehouse/3024.html" p_id="3024" style="position: relative; z-index: 2;" target="_blank"></a><a href="http://cq.focus.cn/votehouse/3024.html" style="z-index: 2;" target="_blank">英利狮城花园</a></div>
<a class="bd_txt" href="https://www.blogger.com/null" style="cursor: default; z-index: 2;">均价:<em>待定</em><br />
位置:<b>重庆渝北区北部新区金石大道(三亚湾市场旁)</b><br />
热线:<em>400-888-2200 转 63961</em></a><a class="go_info" href="http://cq.focus.cn/votehouse/3024.html" style="z-index: 2;" target="_blank">楼盘详情</a></div>
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惊艳亮相北部新区奥宜麦商圈。<!-- adv_tag --><br />
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英利狮城花园项目效果图</div>
21年造数座地标<br />
英利铸就商业地产传奇<br />
在地产开发业界,流传着一句俗话:做住宅是小学生,做别墅是中学生,做商业地产、写字楼则需要大学生、研究生水平。而打造世界级企业总部的高端写字楼,更要求开发企业必须具备行业翘楚的领袖气质。<br />
英利地产深耕重庆二十一载,被业界誉为“城市商业地标专家”。始终坚持以“第一流的地段,打造第一流的产品,服务第一流的客户”开发理念,建筑了一座座汇聚全球经济巨擘目光的顶尖城市地标。民生大厦、邹容广场、纽约•纽约、未来国际、英利国际金融中心等超级地标写字楼荣耀问世,见证了英利地产助力城市繁华升级的宏伟进程。此次,英利地产携洋房领域的诚意之作,26万方新加坡风情洋房项目---英利狮城花园亮相北部新区,不仅代表了其最雄厚的开发实力与前沿设计,也是英利国际置业在获得光大控股17.6亿港币注资后又一大动作。<br />
地标专家诚意之作<br />
英利狮城花园礼赞北部新区<br />
据了解,英利狮城花园从规划设计起,就融合了英利地产数十载的地产开发经验与新加坡国际人居理念。以超高绿化率、清澈灵动的湖面景观,真实还原花园城市风情。以24小时安保、特色管家服务,效法国际一流的新加坡物管服务,以多种稀缺石材、时尚设计美学,勾勒出典雅的建筑外墙。如此精工品质,再加上是重庆首个新加坡风情洋房社区,使得其未售先火,更是被业内外誉为北部新区的加冕之作。<br />
“我一直很信赖英利的品牌,现在就在未来国际写字楼办公。对于英利即将要推出的狮城花园很早之前就有关注,不出意外的话,我应该会很快入手。一来是看好北部新区的发展潜力,二来就是项目独特的新加坡风情,也是吸引我一大原因。”某连锁餐饮企业的董事长李先生向记者这样说道。</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-88306223680144240142014-08-29T02:33:00.001-07:002014-08-29T02:33:11.621-07:00Why Rosesyrup Research Focus On LED Business Of Valuetronic?<div style="text-align: center;">
<i><b><u>Question: Why Rosesyrup Research Focus On LED Business Of Valuetronic?</u></b></i></div>
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<i><b><u><br /></u></b></i></div>
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A reader of my report (<a href="http://rosesyrupresearch.blogspot.sg/2014/07/valuetronic-too-much-risks-to-ignore.html">click here for the report</a>) on Valuetronic sent me the following question:</div>
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<a href="http://1.bp.blogspot.com/-oU0fw_oGzb8/VABFHXjL9UI/AAAAAAAAADA/wfmCD6gjOso/s1600/bandicam%2B2014-08-29%2B05-21-00-117.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-oU0fw_oGzb8/VABFHXjL9UI/AAAAAAAAADA/wfmCD6gjOso/s1600/bandicam%2B2014-08-29%2B05-21-00-117.jpg" /></a></div>
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And so I start digging the answer from <a href="http://www.valuetronics.com.hk/ir/doc/20140704_AR_FY2014.pdf">Valuetronic 2014 annual report</a> to justify my analysis:</div>
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<ol>
<li>Consumer Electronic segment made up 68% of the company revenue. Refer to the following business segments financial report:</li>
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<a href="http://1.bp.blogspot.com/-ztDlrAcZAVg/VABG5sVtt9I/AAAAAAAAADQ/OWFEHJyOs6A/s1600/bandicam%2B2014-08-29%2B05-18-20-974.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-ztDlrAcZAVg/VABG5sVtt9I/AAAAAAAAADQ/OWFEHJyOs6A/s1600/bandicam%2B2014-08-29%2B05-18-20-974.jpg" /></a></div>
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2. Although there weren't further break down of revenue into products line, the company's operation review describe LED business is a big contributor of revenue in Consumer Electronic Segment. Refer to the following extract from Valuetronic's 2014 Operation Review:</div>
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<a href="http://3.bp.blogspot.com/-m0-FwLX_hRY/VABILh2kVGI/AAAAAAAAADY/P3s3zGmyFx0/s1600/bandicam%2B2014-08-29%2B05-15-02-795.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-m0-FwLX_hRY/VABILh2kVGI/AAAAAAAAADY/P3s3zGmyFx0/s1600/bandicam%2B2014-08-29%2B05-15-02-795.jpg" /></a></div>
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<b>Conclusion:</b> LED Business contribute to most of Valuetronic revenue which is why I chosen to focus on the LED industry in my analysis.</div>
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Hope this clarify the doubt, thanks for reading.</div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-77482663769408392022014-08-28T07:44:00.002-07:002014-08-28T07:45:47.498-07:00Rosesyrup View On When will Singapore property market bottom out?<div style="font-family: sans-serif, Arial, Verdana, 'Trebuchet MS'; line-height: 20.7999992370605px; text-align: center;">
<u><b><span style="color: red; font-size: x-large;">Rosesyrup Research</span></b></u></div>
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<u><b><span style="color: red; font-size: x-large;"><br /></span></b></u></div>
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<u><b>Rosesyrup's View On When will Singapore property market bottom out?</b></u></div>
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<u><b><br /></b></u></div>
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For the last two months whenever I flip open the money of my newspapers, I can read many "experts" giving their forecasts and predictions on how low Singapore property price will go before rebouncing. But the question on local property market isn't about WHAT(price), it is more about WHEN.</div>
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We got to understand:</div>
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<li> Local property prices are falling due to gov not removing the cooling measure.</li>
<li>Those measures are not meant to lower property prices to a specific level (if that was the case, those analysts' attempt on predicting "how low price would get" would be appropriate)</li>
<li>Rather Gov kept those cooling measures on because it is worried that the low interest rate level (which depends mainly on Fed and not under the control of MAS) will spur irration speculation and ultimate property bubble.</li>
<li>Understanding Point 3, means that Gov will only remove cooling measures (and therefore property price will only rise) only when interest starts rising.</li>
<li>Simply put, those experts' predictions on WHAT PRICE are basically irrelevant. </li>
<li>A better prediction would be on when will interest rate start rising.</li>
<li>Lastest minute on Fed's meeting in Jackson Hole already revealed that the US only plan to raise rate earliest by end of 2015.</li>
<li>So conclusion=====>>>>><u><b> Enter properties and construction related counters at (or 1-2months before) Dec 2015 to catch the bottom out in the property market.</b></u></li>
</ol>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-33570503709526145062014-08-28T03:29:00.000-07:002014-08-28T03:32:13.659-07:00Performance Review: IReit Global<u><b>Performance Review</b></u><br />
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<b>Purchase Price: </b>$0.885 on IPO Debut<br />
<br />
<b>Target price: </b>$1.06<br />
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<b>Sold Price: </b>$0.895 Today<br />
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<b>Profit / Loss (after deducting Comm):</b> 0.58% over the tenure of 2 weeks<br />
<br />
<br />
<u><b>Comment:</b></u><br />
<br />
I have liquidate all my holding of IReit Global. The profit is negligible and the counter was sold while it was still far from fair value.<br />
<br />
Rationale for selling prematurely is:<br />
<br />
<ul>
<li>Price wasn't moving much from IPO price. As a result I believe speculators are looking to quickly liquidate their holding too. </li>
<li>There is a need to take shelter from the coming ECB (Euro Central Bank)'s Quantitative Easing (QE) program which will depreciate the Euro, reduce the yield and therefore price of IReit.</li>
</ul>
<div>
<br /></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-5673386082374242014-08-22T03:27:00.004-07:002014-08-22T03:47:47.602-07:00Coal gas boom in China holds climate change risks<div class="yom-mod yom-art-hd" id="mediaarticlehead" style="background-color: white; border-color: rgb(52, 78, 127); border-top-style: none; font-family: arial, helvetica, clean, sans-serif; line-height: 16.0029983520508px; margin: 12px 0px 20px; padding: 0px; zoom: 1;">
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<span class="entry-title"><span style="font-size: small;">Source: <u style="font-weight: normal;"><a href="https://sg.finance.yahoo.com/news/coal-gas-boom-china-holds-071937077--finance.html">https://sg.finance.yahoo.com/news/coal-gas-boom-china-holds-071937077--finance.html</a></u></span></span></h1>
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Coal gas boom in China threatens to spew greenhouse gases as world tries to curb emissions</h2>
<a data-rapid_p="1" href="http://www.ap.org/" rel="nofollow" style="color: #005790; font-size: 13px; text-decoration: none;" target="_blank"><img alt="Associated Press" class="logo" src="https://s.yimg.com/bt/api/res/1.2/RHLc2e38u7icwEI6amZAfQ--/YXBwaWQ9eW5ld3M7Zmk9Zml0O2g9Mjg-/http://l.yimg.com/os/672/2012/11/30/ap-logo-png_062424.png" style="background-repeat: no-repeat; border: 0px; display: inline !important; margin-bottom: 15px;" title="" /></a><cite class="byline vcard" style="color: #777777; display: block; font-family: Georgia, Times, 'Times New Roman', serif; font-size: 12px; font-style: normal; vertical-align: middle;">By <span class="author vcard">Jack Chang, Associated Press</span> | <span class="provider org">Associated Press</span> – <abbr class="updated" style="border: 0px;" title="2014-08-22T07:19:37Z">2 hours 48 minutes ago</abbr></cite></div>
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<table class="yui3-accordion" id="yui_3_9_1_1_1408714286784_1044" style="border-collapse: inherit; border-spacing: 0px; border: none; font-size: inherit; padding: 0px; position: relative; width: 190px; zoom: 1;"><thead>
<tr><th class="first" style="border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; color: #999999; font-size: 10px; margin: 0px; padding: 0px 0px 4px;">Symbol</th><th style="border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; color: #999999; font-size: 10px; margin: 0px; padding: 0px 0px 4px; text-align: right;">Price</th><th style="border-bottom-color: rgb(153, 153, 153); border-bottom-style: solid; border-bottom-width: 1px; color: #999999; font-size: 10px; margin: 0px; padding: 0px 0px 4px; text-align: right;">Change</th></tr>
</thead><tbody>
<tr class="yui3-accordion-item yui3-accordion-item-hd yui3-accordion-item-trigger yui3-accordion-item-active" id="yui_3_9_1_1_1408714286784_1046" style="border-bottom-color: rgb(128, 128, 128); border-bottom-style: solid; border-bottom-width: 1px; cursor: pointer;"><td class="first" style="border-bottom-color: rgb(214, 231, 242); border-bottom-width: 3px; border-style: none none solid; color: #005790; font-size: 11px; font-weight: bold; margin: 0px; padding: 6px 0px; vertical-align: top;"><span class="symbol"><a data-rapid_p="1" href="https://sg.finance.yahoo.com/q?s=f" style="color: #005790; text-decoration: none;">F</a></span></td><td style="border-bottom-color: rgb(214, 231, 242); border-bottom-width: 3px; border-style: none none solid; font-size: 11px; font-weight: bold; margin: 0px; padding: 6px 0px; text-align: right; vertical-align: top;"><span class="streaming-datum" id="yfs_l84_f">17.40</span></td><td style="border-bottom-color: rgb(214, 231, 242); border-bottom-width: 3px; border-style: none none solid; font-size: 11px; font-weight: bold; margin: 0px; padding: 6px 0px; text-align: right; vertical-align: top;"><span class="streaming-datum yfi-price-change-red" id="yfs_c63_f" style="color: #cd171c;">-0.01</span></td></tr>
<tr class="yui3-accordion-item-bd yui3-accordion-item-bd-active"><td colspan="3" style="border-color: rgb(128, 128, 128) rgb(128, 128, 128) rgb(214, 231, 242); border-style: solid; border-width: 0px 0px 3px; font-size: 11px; font-weight: bold; margin: 0px; padding: 8px 0px 0px; text-align: right; vertical-align: top;"><div style="border: 0px; height: auto; margin: 0px; overflow: visible; padding: 0px; visibility: visible;">
<a data-rapid_p="2" href="https://sg.finance.yahoo.com/q?s=f" style="color: #005790; text-decoration: none;"><img alt="" src="https://ichart.finance.yahoo.com/t?s=f&lang=en-SG&region=SG" style="background-repeat: no-repeat; border: 0px; margin-bottom: 8px;" title="" /></a></div>
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<li class="photo first last" style="color: #444444; font-size: 11px; line-height: 1.45em; list-style: none; margin: 0px 0px 20px; padding: 0px; vertical-align: top;"><a class="media" data-rapid_p="1" data-ylk="pkg:561f73b4-375b-3a89-ad4a-2baa3c520ade;ver:08677570-29cd-11e4-bfbb-b88e51b5034c;ct:p;" href="https://sg.finance.yahoo.com/photos/coal-gas-boom-china-holds-photo-071937686--finance.html" style="background-color: black; color: #005790; display: inline-block; font-weight: bold; margin-bottom: 2px; overflow: hidden; position: relative; text-decoration: none; zoom: 1;"><img alt="In this Friday, Aug. 8, 2014 photo, a sheep herder looks over sheep near a state-of-the-art power plant that turns millions of tons of coal every year into methane in northern China's Inner Mongolia province. Deep in the hilly grasslands of remote Inner Mongolia, twin smoke stacks rise more than 200 feet into the sky, their steam and sulfur billowing over herds of sheep and cattle. Both day and night, the rumble of this power plant echoes across the ancient steppe, and its acrid stench travels dozens of miles away. (AP Photo/Jack Chang)" class="" height="125" src="https://s3.yimg.com/bt/api/res/1.2/4KzvQuGRxoDrEmNiOO86XQ--/YXBwaWQ9eW5ld3M7Y2g9MzY0Mjtjcj0xO2N3PTU1NDM7ZHg9MDtkeT0wO2ZpPXVsY3JvcDtoPTEyNTtxPTg1O3c9MTkw/http://globalfinance.zenfs.com/images/SG_AHTTP_AP_FINANCIALTIMES/46dd01ddf4f77f205d0f6a7067000b98_original.jpg" style="background-repeat: no-repeat; border: 0px; display: block;" title="In this Friday, Aug. 8, 2014 photo, a sheep herder looks over sheep near a state-of-the-art power plant that turns millions of tons of coal every year into methane in northern China's Inner Mongolia province. Deep in the hilly grasslands of remote Inner Mongolia, twin smoke stacks rise more than 200 feet into the sky, their steam and sulfur billowing over herds of sheep and cattle. Both day and night, the rumble of this power plant echoes across the ancient steppe, and its acrid stench travels dozens of miles away. (AP Photo/Jack Chang)" width="190" /><span class="action enlarge" style="background-color: rgba(0, 0, 0, 0.701961); background-image: url(https://s.yimg.com/os/mit/media/themes/teal114b60/images/map-theme_ltr-1093407.png); background-position: 5px -1542px; background-repeat: no-repeat; bottom: 0px; color: white; display: block; font-size: 12px; left: 0px; padding: 7px 7px 7px 29px; position: absolute; width: 190px;">View Photo</span></a><div style="font-family: arial; padding: 0px;">
In this Friday, Aug. 8, 2014 photo, a sheep herder looks over sheep near a state-of-the-art power plant that turns millions of tons of coal every year …</div>
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HEXIGTEN, China (AP) -- Deep in the hilly grasslands of remote Inner Mongolia, twin smoke stacks rise more than 200 feet into the sky, their steam and sulfur billowing over herds of sheep and cattle. Both day and night, the rumble of this power plant echoes across the ancient steppe, and its acrid stench travels dozens of miles away.</div>
<div style="margin-top: 11px; padding: 0px;">
This is the first of more than 60 coal-to-gas plants China wants to build, mostly in remote parts of the country where ethnic minorities have farmed and herded for centuries. Fired up in December, the multibillion-dollar plant bombards millions of tons of coal with water and heat to produce methane, which is piped to Beijing to generate electricity.</div>
<div style="margin-top: 11px; padding: 0px;">
It's part of a controversial energy revolution China hopes will help it churn out desperately needed natural gas and electricity while cleaning up the toxic skies above the country's eastern cities. However, the plants will also release vast amounts of heat-trapping carbon dioxide, even as the world struggles to curb greenhouse gas emissions and stave off global warming.</div>
<div style="margin-top: 11px; padding: 0px;">
If all of the plants start up, the carbon dioxide they'd release would equal three-quarters of all energy-related carbon emissions in the U.S., according to U.S. government data and energy experts from Duke and Stanford universities. That is far more than now produced in China by burning coal, the country's main source of power.</div>
<div style="margin-top: 11px; padding: 0px;">
So far, China is running only two pilot plants to produce methane, which is also known as synthetic natural gas, in the provinces of Inner Mongolia and far western Xinjiang, with another 21 approved. Building all 60 plants would cost an estimated $65 billion.</div>
<div style="margin-top: 11px; padding: 0px;">
"Once you have invested in it, China will have locked itself in a high water-consuming, high carbon-emitting path," said Chi-Jen Yang, the Duke energy researcher. "This short-term mistake will become a mistake that will be hard to turn around for decades."</div>
<div style="margin-top: 11px; padding: 0px;">
Chinese leaders are under intense pressure to meet rising energy needs spurred by economic growth but are hampered by insufficient reserves of natural gas and oil. At the same time, China's massive cities are contending with air pollution so intense it can shut down schools and airports and, studies show, shorten life expectancy by as many as five years.</div>
<div style="margin-top: 11px; padding: 0px;">
Central to the appeal of the coal-to-gas plan is that it moves polluting energy production far away from cities while also turning the country's vast coal reserves into more valuable natural gas.</div>
<div style="margin-top: 11px; padding: 0px;">
Yet scientists at Tsinghua University and Ford Motor Co. estimate the process emits between 36 and 82 percent more greenhouse gases than burning coal to produce electricity. The resulting methane can also be used to power vehicles, heat homes and cook food.</div>
<div style="margin-top: 11px; padding: 0px;">
Already, China emits more heat-trapping carbon into the atmosphere than any other nation and twice that of the U.S., the world's second biggest carbon emitter. Even without the new plants, China's carbon emissions are projected to double over the next 25 years, while U.S. emissions stay steady, U.S. Energy Information Administration data show.</div>
<div style="margin-top: 11px; padding: 0px;">
"Everybody wants to find a path forward to solve the problems of (synthetic natural gas) and at the same time solve China's pollution problems," said Yanling Gong, editor-in-chief of the government-affiliated China National Chemical Information Centre.</div>
<div style="margin-top: 11px; padding: 0px;">
While less directly polluting than burning coal, the Inner Mongolia plant run by state-owned company Datang has already transformed this corner of rural Hexigten county famous for its long-maned horses and sun-burnt vistas.</div>
<div style="margin-top: 11px; padding: 0px;">
As a boy growing up there, farmer Adiya could ride his horse through waist-high grass for miles without meeting another person. Now, the 32-year-old says he stays indoors some mornings because of the industrial stench.</div>
<div style="margin-top: 11px; padding: 0px;">
Since the plant started running in December, it has obscured the blue skies above Adiya's home with smoke while black pools of wastewater have turned up in the grasslands.</div>
<div style="margin-top: 11px; padding: 0px;">
"I only wish they could build this factory in Beijing," said Adiya, who uses only one name, as is Mongolian custom.</div>
<div style="margin-top: 11px; padding: 0px;">
First developed during World War II, coal gasification breaks down coal into a fuel-gas mix called syngas and then into carbon dioxide and methane. The carbon is often released into the air.</div>
<div style="margin-top: 11px; padding: 0px;">
The only other gasification plant in the world outside China to commercially produce synthetic natural gas sits in the coal-rich plains of North Dakota.</div>
<div style="margin-top: 11px; padding: 0px;">
However, that plant became a financial black hole as soon as it began commercial operations in 1984. Natural gas prices leveled off and oil prices fell around the time it launched, knocking askew the plant's economics.</div>
<div style="margin-top: 11px; padding: 0px;">
Despite that history, China has seized on the technology as a convenient bridge between its coal surplus and natural gas needs. But warnings about coal gasification appear to be getting through to at least some in China's government.</div>
<div style="margin-top: 11px; padding: 0px;">
In a rare show of transparency, the chemical industry group mounted a three-day conference in August to debate the technology's future, sparking the kind of robust public discussion almost never seen among Chinese policymakers.</div>
<div style="margin-top: 11px; padding: 0px;">
From the bustling Inner Mongolian city of Chifeng, Datang senior engineer Ge Wei said the facility's toughest challenge was properly disposing of the rivers of waste water it produces.</div>
<div style="margin-top: 11px; padding: 0px;">
"We just want to make this run more smoothly," Ge said. "We don't want to say who's right and who's wrong. There's a lot we can just adjust."</div>
<div style="margin-top: 11px; padding: 0px;">
However, Zhou Xueshuang, the director of China's petrochemical industry regulator, said he wasn't sold yet on the coal-to-gas boom. He warned of unchecked pollution and the plants' voracious use of water in some of China's driest regions.</div>
<div style="margin-top: 11px; padding: 0px;">
"From the environmental standpoint, it doesn't make sense," Zhou said at the conference. "To turn coal into gas and from gas to electricity, I think most of the projects aren't worth supporting."</div>
<div style="margin-top: 11px; padding: 0px;">
During a visit to the Datang site, Associated Press reporters saw evidence of air and water pollution from the plant, two days before visitors from the conference arrived.</div>
<div style="margin-top: 11px; padding: 0px;">
Although the facility's waste water evaporators, which produce much of its stench, didn't appear to be running, a sharp odor still filled the site. Adiya said the smell was usually much worse but had been diminishing in the days leading up to the official visit. By the time the tour buses showed up, the stench had disappeared. Reporters also saw a large pool of black waste water beside the plant's west wall, with no lining or other protection preventing it from contaminating groundwater.</div>
<div style="margin-top: 11px; padding: 0px;">
While pollution problems are being scrutinized, few in China are talking about greenhouse gas emissions as part of the synthetic natural gas debate, said Gong from the chemical industry group.</div>
<div style="margin-top: 11px; padding: 0px;">
"I think the carbon emissions issue isn't as serious as China's energy problems," she said.</div>
<div style="margin-top: 11px; padding: 0px;">
Yet operating just 40 of the new facilities at 90 percent capacity would emit around 110 billion metric tons of carbon dioxide over 40 years, according to a study by Yang and Stanford University energy and environment professor Robert Jackson. The world emitted 36 billion metric tons of carbon dioxide last year from burning fossil fuels, according to the research group the Global Carbon Project.</div>
<div style="margin-top: 11px; padding: 0px;">
Jackson said China could blunt some of the carbon impact by installing expensive technology at the plants that would capture carbon and bury it underground. He said none of the Chinese plants are set up to capture carbon. The North Dakota plant buries or reuses up to half of the carbon it emits.</div>
<div style="margin-top: 11px; padding: 0px;">
Yang, however, said that even with the technology, the Chinese plants would capture only a third of the greenhouse gas emissions from synthetic natural gas because more carbon is released when the gas is later burned to produce electricity. What China really needs to focus on is spurring cleaner energies such as non-coal based natural gas, he said.</div>
<div style="margin-top: 11px; padding: 0px;">
"If they have only built these two plants, the impact is not that big," Yang said. "If you build 30 or 40, the effect will be extremely serious. To stop that development, the time to do that is now."</div>
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Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com0tag:blogger.com,1999:blog-2458082384614117898.post-39642168549425164242014-08-22T01:22:00.000-07:002014-08-22T01:23:22.049-07:00Mirach Energy: Jack In The Box<div align="center" class="MsoNormal" style="text-align: center;">
<b><u><span style="color: red;"><span style="font-size: x-large;">Rosesyrup Research</span><o:p></o:p></span></u></b></div>
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<b><u><br /></u></b></div>
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<b><u><br /></u></b></div>
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<b><u>Mirach Energy: Jack In The Box<o:p></o:p></u></b></div>
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<b><u><br /></u></b></div>
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<b><u><br /></u></b></div>
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<b><span style="color: red;">Current Price: $0.197<o:p></o:p></span></b></div>
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<b><span style="color: red;">Target price: $0.018<o:p></o:p></span></b></div>
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<b><span style="color: red;">Call: Short<o:p></o:p></span></b></div>
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<b><span style="color: red;">Potential Return: 10.73X<o:p></o:p></span></b></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="color: red;">Before we
proceed to the analysis, readers need to understand all the following is my
opinion only and in no way represents fact of any kind. No allegation of any
kind is made here.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
As a fundamentalist, I can never
stress enough how important an annual report is. In fact accounting figures in
the report are the only way we know how well a company performed for the past 1
year or quarter. For this reason, regulators over the world have placed strong
legal burden on directors and auditor to ensure the financial statements
present a <u>true and fair view</u> of the company economic affair.</div>
<div class="MsoNormal" style="text-align: justify;">
Although Mirach's report has the
assurance of its directors and auditor, I choose not to place any faith in what
I read from the report due to the following red flags:</div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<br />
<ul>
<li><b style="text-indent: -0.25in;">1.<span style="font-size: 7pt; font-weight: normal;">
</span></b><b style="text-indent: -0.25in;">Change
of CFO</b></li>
</ul>
<!--[if !supportLists]--></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
With effect from
1 July 2014, Dr Hu Xiao Ying will be replaced by Mr Cheah Soon Ann Jeremy as
CFO. The former was appointed as CFO in
2012 September and held office for about 1 year 10 months. Due to the strategic
natural of the position, the average term of CFO is about 3-5 years. It is very rare for CFO to step down in less
than 2 years.</div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
The company did
not proceed to give any further reason as to why the CFO stepped down but
claimed that Dr Hu will continue to serve as Supervisor of Prisma Kampung
Minyak oil field under the company. This is mind blogging. Definitely the
remuneration package of supervisor can't compare to that of a CFO, and Dr Hu his
PHD and experience as CFO could have seek employment elsewhere. But this sound
like a good way to dismiss Hu's service without the need to give any explanation.
</div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<br />
<ul>
<li><b style="text-indent: -0.25in;">2.<span style="font-size: 7pt; font-weight: normal;">
</span></b><b style="text-indent: -0.25in;">Change
in Auditor</b></li>
</ul>
<!--[if !supportLists]--></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
Right after the
previous CFO stepped down, Mirach proceeded to change its auditor from RT LLP to Ernst & Young LLP. I did a quick check on
RT LLP and it is still in business. So why is there a need to change auditor? </div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
Annual report is
like the report card of the management and auditor is like the examiner. It
takes time for the new auditor to fully understand and appreciate the business
before deciding to gives its management some leeway, whenever appropriate, in
accounting. So what makes the management abandon the old teacher who tend to
give lenient grade and choose a new teacher who is more stringent? Management
is just acting in contrary to its incentive and it does sound dubious.</div>
<div class="MsoListParagraphCxSpMiddle">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<br />
<ul>
<li><b style="text-indent: -0.25in;">3.<span style="font-size: 7pt; font-weight: normal;"> </span></b><b style="text-indent: -0.25in;">Accounting Quality : Revenue</b></li>
</ul>
<!--[if !supportLists]--></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
If the abrupt
change in CFO and auditor weren't enough to raise alarm, the annual report
should do the job. The following is an extract of Mirach's Operation Review (Pg
08 of 2013 annual report):</div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpLast" style="text-align: justify;">
<i>" For the financial year ended 31
December 2013 (“FY2013”), <u>Revenue of USD5.1 million was derived from the
Group’s continuing operations </u>compared to that of USD1.05 million <o:p></o:p></i></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="text-align: justify;">
<i>in the financial year ended 31 December 2012
(“FY2012”). <u>The main revenue of USD4.0 million was derived from providing
the investment advisory service</u>s to the Group’s partner in their oil field
acquisition in Indonesia</i>."</div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
By claiming that
the $5.1M is from the company continuing operation (note the word continuing),
Mirach is trying to imply that it is recurring in natural. But can we really
expect such revenue to recur in the future? If we read further, we find that
$4M (of the $5.1M) is derived from providing acquisition advice to another
company. Can we expect that same company to do acquisition every year and
therefore engage Mirach's service annually? </div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
The last time I
check, such revenue is usually one off instead of "continuing" ! To
think that management have the cheek to even "fool around" with how
the top line of the income statement is perceived already signal some governance
problem.</div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<br />
<ul>
<li><b style="text-indent: -0.25in;">4.<span style="font-size: 7pt; font-weight: normal;"> </span></b><b style="text-indent: -0.25in;">Goverance Issue: Interest free Loan</b></li>
</ul>
<!--[if !supportLists]--></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
As of the end of
2013, the company is effectively providing an interest free loan to its
associate CPHL cambodia in which it has
48% stake. Quantum of the loan amount to around 35% of the company total
asset. </div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-YinhG-v3nJw/U_b9LCqrWuI/AAAAAAAAAB4/esoSaCf4YLY/s1600/assocaaite.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-YinhG-v3nJw/U_b9LCqrWuI/AAAAAAAAAB4/esoSaCf4YLY/s1600/assocaaite.jpg" height="515" width="640" /></a></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
Since Mirach has
minority stake in CPHL, why did the company give interest free loan to the
associate? By doing so it is benefiting other shareholders of CPHL more than
benefitting Mirach shareholders. Can't
the associate apply for bank loan?</div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
Although the
company believes that the loan is highly recoverable but CPHL is a highly leveraged loss making
company.</div>
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<br /></div>
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<br /></div>
<div align="center" class="MsoListParagraphCxSpMiddle" style="text-align: center;">
<b><u>Valuation<o:p></o:p></u></b></div>
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In the face of such poor accounting quality and possible
"jack in the box" (governance issue) down the road, I placed little
faith in whatever I see in the accounting statement and therefore prefer to
value the firm with NAV, with the following adjustment to the 2013 December book value of course:</div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: .75in; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->Assume default of associate (USD$18512000)</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: .75in; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->Removal of intangible asset which is mainly made
up of <b><u>Unproved</u></b> Concessionary
right in Cambodia. (USD$8696000)</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: .75in; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->Loss in H2 2014 (USD$2817000)</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: .75in; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">
</span></span><!--[endif]-->Exchange rate of USD$1 to SGD$1.249</div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<b><span style="background-attachment: initial; background-clip: initial; background-color: yellow; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: red;">Adjusted NAV per share
= $0.018 (My target price)</span><span style="color: red; text-decoration: underline;"><o:p></o:p></span></b></div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
Well, not all readers are convinced that the company has
weak governance, in that case they might want to value the company with the
usual P/B ratio.</div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
Average P/B ratio of oil company now = 1.72</div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<b><span style="background-attachment: initial; background-clip: initial; background-color: yellow; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: red;">Price = 0.032
(aggressive target price)</span><span style="color: red; text-decoration: underline;"><o:p></o:p></span></b></div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
From the following chart, the market seems to agree with me
that NAV is a good way to value the company. As we can see, before the usual
price movement which was queried by SGX, Mirach had been pretty stable at 0.05
cents (NAV claimed on the company website). </div>
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<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-EKN5jRMkEFY/U_b9ehCNQyI/AAAAAAAAACI/ssZMl4RE_bQ/s1600/chart.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-EKN5jRMkEFY/U_b9ehCNQyI/AAAAAAAAACI/ssZMl4RE_bQ/s1600/chart.jpg" height="440" width="640" /></a></div>
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<br /></div>
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<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
I personally suspect that the usual price movement is a
designed attempt by big buyers to lure small investors in. As we can see from
the huge increase in volume (before price movement), a very bullish signal
sufficient to lure retailers using technical analysis. After the manipulation,
price has been falling as the big buyers take profit and market comes to its
sense that Mirach isn't worth that much. T<u>herefore my call is to short Mirach
and take advantage of the market irrationality! Potential return = 10 times.</u></div>
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<br /></div>
<br />
<div class="MsoListParagraphCxSpLast" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<o:p> Oh yeah one more thing I learnt from my experience in the energy sector. Energy companies are deemed to be very risky business and to limit that risk to shareholders, companies usually rely on huge amount of debt financing in order to take advantage of the limited liability natural of a company. But for Mirach case, the level of liability is really low in comparison to peers and there is nearly no bank loans taken up. Is it because the company can't obtain any loan from bank? Afterall all banks would request to examine the firm business and financial statements in detail before promising to make any loan.</o:p></div>
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<o:p><br /></o:p></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 0in; text-align: center;">
<o:p>Happy shorting this Jack in the box!</o:p></div>
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<o:p><br /></o:p></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-MYhM-GWrD5s/U_b8_9ggtsI/AAAAAAAAABw/bRwl5r4G1l0/s1600/jack.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://3.bp.blogspot.com/-MYhM-GWrD5s/U_b8_9ggtsI/AAAAAAAAABw/bRwl5r4G1l0/s1600/jack.jpg" /></a></div>
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<o:p><br /></o:p></div>
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<o:p><br /></o:p></div>
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<o:p><br /></o:p></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com1tag:blogger.com,1999:blog-2458082384614117898.post-79343789412775362162014-08-14T10:10:00.000-07:002014-08-14T10:13:23.336-07:00Valuing JAPFA<div align="center" class="MsoNormal" style="text-align: center;">
<b><u><span style="color: red; font-family: Arial, sans-serif; line-height: 115%;"><span style="font-size: x-large;">Rosesyrup Research</span><span style="font-size: small;"><o:p></o:p></span></span></u></b></div>
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<br /></div>
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<b><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%;"><span style="color: red;"><br /></span></span></b></div>
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<b><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%;"><span style="color: red;">TARGET PRICE: $1</span></span></b></div>
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<b><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><span style="color: red;"><br /></span></span></b></div>
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<b><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%;"><span style="color: red;">Upside: 25%</span></span></b></div>
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<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></u></b></div>
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<b><u><span style="font-family: Arial, sans-serif; line-height: 115%;"><span style="font-size: large;">Valuing
JAPFA</span><span style="font-size: small;"><o:p></o:p></span></span></u></b></div>
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<b><u><span style="font-family: Arial, sans-serif; line-height: 115%;"><span style="font-size: large;"><br /></span></span></u></b></div>
<div class="MsoNormal" style="text-align: justify;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><span style="color: blue;">A
number of blogs and articles have done a good job providing qualitative
analysis on JAPFA. Rather than repeating their points all over again and risk
being redundant here, I will just quickly summaries their points and provide
the relevant link to their respective websites. <o:p></o:p></span></span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><span style="color: blue;">Instead
I will add value by expressing my views on JAPFA and end off by providing my
formal valuation. </span><o:p></o:p></span></i></div>
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<i><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal" style="text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Summary<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">As countries in ASEAN region
become richer, there is a real growth potential for JAPFA business. The
industry is also very fragmented in Indonesia and mostly run by families with limited capital. Therefore, a publicly
listed JAPFA with access to huge amount of funding has significant competitive
advantage over private limited competitors. Thus being a market leader in a
fast growing industry makes JAPFA business a very attractive investment
opportunity. (You can read more about JAPFA's attractiveness from <a href="http://singapore-ipos.blogspot.sg/2014/08/japfa-balloting-results.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+SingaporeIpos+(Singapore+IPOs)">MR IPO BLOG</a>).<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">However, JAPFA is highly
leveraged with 60% of its asset financed with debt and some of its credit are
charged as high as 16%. The fact that JAPFA is operating in Indonesia, a
country faced with twin deficit problem raise extra concern. (Read more about
credit risk from <a href="http://www.fool.sg/2014/08/11/what-investors-need-to-know-about-japfa-limiteds-initial-public-offering/">Motley Fool article</a>).<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">My
Opinion<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Credit risk concern raised
by Motley Fool might be overplayed a bit:<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
</div>
<ul>
<li><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">1.<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;"> </span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">Average interest rate of JAPFA stands at
around 6-7%. The 16% interest rate is most probably cost of small amount of revolving
credit, which typically much more expensive than line credit but necessary for
every business's day to day operation.</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">2.<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">It is an agriculture industry's norm to have
high leverage. For example, JAPFA debt to equity ratio stands at 1.4X while
Chaoren Food (direct competitor) has a ratio of 1.7X.</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">3.<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">While I agree that the volatile interest rate
and currencies in Indonesia post significant near term risk to JAPFA, a1997
Asian currencies crisis type of scenario is highly unlikely to happen due to
the improved cooperation among Central Banks and currency pegging system.</span></li>
</ul>
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<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">In
conclusion I think JAPFA is an attractive growth investment with
correspondingly high risk. In order to quantify that risk and attractiveness,
we will need to do a valuation on JAPFA.<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Valuation
by other websites and their flaws<o:p></o:p></span></u></b></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Before we move on to the calculation, it is worthy to
note that JAPFA has negative cashflow and does not pay dividend. This means
that absolute valuation models are inapplicable. Even if I could extrapolate
and assume JAPFA could achieve positive cashflow by X year, the assumption is
highly unreliable due to the highly uncertain political environment in
Indonesia.<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in; mso-add-space: auto; text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Motley Fool therefore attempted to value JAPFA using P/E
model (a relative valuation method comparing against competitors based in China),
which I do not think is appropriate in JAPFA case due to the following 2
reasons:<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l3 level1 lfo2; text-align: justify; text-indent: -.25in;">
</div>
<ol>
<li><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">1.<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">Peers in China operate under a very very
different business environment as compared to JAPFA. Some important differences
are in the legal system and capital flow, which have great impact on valuation.</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">2.<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">What P/E model really compares is the level
of market confident in a company's ability to translate each cent of earning into
ultimate returns to shareholders (usually through dividend policy). But as
mentioned, JAPFA does not have any dividend policy as of yet.</span></li>
</ol>
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<div class="MsoNormal" style="text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">My
valuation<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">My valuation model entails
using justified P/B ratio and only comparing against Thailand Chaoren Food
which operates in environment much similar to that of JAPFA. I have attached a
screenshot of my modeling as follow:<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-5g8Egb3a7Wc/U-zsyrBFg_I/AAAAAAAAABg/pq5lSrR4kb0/s1600/haha.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://2.bp.blogspot.com/-5g8Egb3a7Wc/U-zsyrBFg_I/AAAAAAAAABg/pq5lSrR4kb0/s1600/haha.jpg" /></a></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<br /></div>
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<div class="MsoNormal" style="text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Things
to Notes<o:p></o:p></span></u></b></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo3; text-align: justify; text-indent: -.25in;">
</div>
<ul>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">I assume an ROE of 15.37% (average of past 3
years ROE) in FY 2014. Up to you to assess is this a realistic assumption.</span></li>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">Target price is $1 with 25% upside from IPO
price.</span></li>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">Target price is just a maximum price <u>an
economic person</u> is willing to pay for JAPFA's risk and reward, it does not
mean that actual market price will move to 99.5cents due to reasons like market
sentiments.</span></li>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">JAPFA is highly recommended for institutional
investors looking to invest in counters that form growth portion of their
portfolio.</span></li>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">JAPFA is NOT recommended for most individual
investors, except high risk growth investors. Such individuals are also advised
to limit their portfolio exposure to JAPFA.</span></li>
</ul>
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<div class="MsoNormal" style="text-align: justify;">
<b><u><span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Rosesyrup's
Trading Strategy on first day of listing<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Since JAPFA is too risky for
the appetite of most value investors who supported the share price in the
market, whether JAPFA float or sink on debut rest completely on whether institutional
investors will come in and grab some shares in the open market. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Therefore my personal
strategy is to wait for signal. <o:p></o:p></span></div>
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<ul>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">If price sink, I will wait till it stabilize
before buying in to gain higher return. Matter of time institutional investors
will come in, as it is indeed a very attractive stock to have in a large and
diversified portfolio.</span></li>
<li><span style="font-family: Symbol; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">·<span style="font-family: 'Times New Roman'; font-size: 7pt; line-height: normal;">
</span></span><span style="font-family: Arial, sans-serif; font-size: 12pt; line-height: 115%; text-indent: -0.25in;">If price float with quick and large
volume=> I would enter quickly and exit at target price + 10% ($1.10) (Institutional
investors are armed with tools to do shrewd valuation, better not to push my luck too far).</span></li>
</ul>
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<span style="font-family: "Arial","sans-serif"; font-size: 12.0pt; line-height: 115%;">Goodluck to all.<o:p></o:p></span></div>
Anonymoushttp://www.blogger.com/profile/11407748841700677984noreply@blogger.com7