MacGyver Site Visit to China

MacGyver
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11 years 4 months ago #12667 by MacGyver

Replied by MacGyver on topic Re:MacGyver Site Visit to China

Dear Forummers,
If you breakup their revenue and profitability, you will find the cargo business is not too profitable. The port business is used to create the stickiness with the cargo customers. As a result, the margins in the cargo business are extremely low.
Too much inefficiency compared to Portek business. However, it remains profitable compared to NOL, Courage Marine, Mermaid etc.... This is a plus point for the Company.
Their passenger ferry business is doing well and looks likely to improve with the inclusion of media advertising in their ferries.
In addition, they owned a portion of their Chu Kong Shipping Tower in Sheung Wan. I did a rough revaluation of these properties. These properties are carried at book value in their balance sheet. I estimated that these properties alone could make up 25-40% of their current market cap.
Lastly, going by their track record, this Company is likely to acquire new assets from their parent company in the coming year. Each time, they execute this corporate action, the share price has a positive response.
Hence, I am buying the stock based on the above factors. Should these factors change, then I will reconsider the status of my purchases.

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Free Soul
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11 years 4 months ago #12672 by Free Soul

Replied by Free Soul on topic Re:MacGyver Site Visit to China

It doesn't sound like a great business. The investing story is not compelling and hangs on the stock being at a discount to NTA and on some possible injection of asset. In the absence of specifics about the asset which could be injected, it's mainly speculation that
a) the injection would take place,
b) there would be a big impact on the financial outcome for CKS.

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MacGyver
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11 years 4 months ago #12676 by MacGyver

Replied by MacGyver on topic Re:MacGyver Site Visit to China

A post Merry-Christmas to all;
As mentioned earlier, I have no duty of care to anybody who reads my posting. Everybody has his/her own view and I fully respect them.
Every investor has his/her own style. I am no good with turnaround stories or concept plays. I tend to focus on businesses with strong recurring incomes with catalysts in the coming near term. The catalysts will provide the capital gain while i sit back and enjoy the dividends. I am not looking for values in these companies but a stable consistent profit base with a reasonable safe comfort zone.
I am equally lousy with value plays as i find most of them turn out to be value-traps.
I may turn out to be wrong in the end but at least, I decide my own destiny.

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MacGyver
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11 years 4 months ago #12677 by MacGyver

Replied by MacGyver on topic Re:MacGyver Site Visit to China

Regarding the investment in property stocks.
In the end, I did make a small investment into Sing Holdings around 35 cents but I have exited at 41 cents after achieving my target returns.
The reason for my investment in Sing Holding --- Management track record.
They have a proven track record of changing their strategy when it matters.
High-end luxury may continue to struggle in end term while mass-market will come in for some deep correction at mid-end 2013 / early 2014.
If you see Sing Holdings, they were bidding for mass-market projects in recent weeks. Mass-market projects can be market off rapidly. I believe you will see them selling the Punggol project as early as CNY 2013 as they try to get buyers in asap and secure profit for 2014.
To the other property stocks, they may be good but they do not suit my investment portfolio hence i avoid them for the time being.

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MacGyver
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11 years 4 months ago #12678 by MacGyver

Replied by MacGyver on topic Re:MacGyver Site Visit to China

To Sean,
If you have spoken to hotel operators before, they will tell you that hospitality industry is one of the worst to make money.
If you don't sell the rooms out before the night, you have loss of revenue. Similar to an airline business. But in the case of airlines, they have last minute booking for travellers. Hotel? There are some customers in the night of course.
That is why you see so many hotel operators selling their hotels recently. This wave of interests came because of the huge increase in tourism. Hotel rates are going crazy in Singapore and the operators hope to make the most of it.
However, good things seldom last long.
Tourism in Singapore rose because of the 2 integrated resorts and the good efforts by the Singapore government.
But Phillipines are building 4 integrated resorts now and Taiwan is also considering to build 1 casino in 2014.
Good things don't last. Hiap Hoe will be in the market to sell off its hotel assets once they can hit enough occupancy rates. However, there are also many more operators doing there in the near term.
I do not know Hiap Hoe management well enough to gauge how they will react. But it will be an interesting case to study.

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MacGyver
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11 years 4 months ago #12679 by MacGyver

Replied by MacGyver on topic Re:MacGyver Site Visit to China

I will write more about my visit to China after Boxing Day. I had interesting time at Shandong's red wine and apple farms as well as a visit to Beijing technology park.
Have a good Boxing Day!

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