Sunday, 10 May 2020

Portfoilo Update: Addition of more Companies

Given the recent market weakness, I have added three new companies company to my stocks with the proceeds of FSL Divestment

I have added KSH Holdings, China Everbright and Suntec Reit.

The addition of KSH was due to my viewpoint that as part of the government strategy to prime pump the economy, the public sector would add construction infrastructural projects to offset the downturn. KSH is a A1 graded contractor which allows it to undertake any public project of any value. The company also has an A2 civil engineering grading which allows it to bid for civil engineer projects for up to $85million. Construction forms a major revenue component for KSH and even among its projects, most of it belongs to the Public Sector.

In addition, KSH has a property development arm which has a few projects that are pre sold. For example, its Riverfront Residence project is 80% sold. However due to accounting standards, KSH is not able to pre book the revenue/profits and will recognise such revenue/profits in the next few years.

China Everbright was purchased at 0.205 because of the resiliency of its water projects across China. However, I did not add as aggressively as KSH due to my worries of its negative cashflow business.

Suntec REIT was a purchase as I feel the dividends is worth at  current low price of 1.30ish  I forsee further dividend cuts until the REIT yields about 5-6 cents annual dividends. However, in 1-2 years time, should the Covid situation improve, we should see a return to profitability for its exhibition hall segment and a return of 9-10 cents dividends.

As of now, my portfolio looks a bit more diversified across various industries. It is unlikely I will add more stocks for now. This is to ensure a sufficient war chest should another downturn persist.

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