Capitalizing On Australia’s Ageing Population

Australia’s population is much older today than it has been in the past, and both the number and proportion of older people is growing steadily. In 1964, the median age in Australia was 28.5 years, and 8% of the population (948,100 people) were aged 65 and over. Only 0.4% of the population (50,100 people) were aged 85 and over.

In 2014, the median age had increased by almost a decade to 37.3 years, and the number of people aged 65 and over had more than tripled to 3.4 million. Older people now account for an increasing share of the population—15% of Australians were aged 65 and over in 2014, compared to 8% in 1964. In addition, there has been a ninefold increase in the number of people aged 85 and over, up to 456,600 or 1.9% of the population in 2014.

These trends are predicted to continue into the future, particularly as the baby boomer generation ages. The first baby boomers were born in 1947 and turned 65 in 2012, and will slowly be moving in to the ‘old old’ cohort—those aged 85 and over. Based on population projections by the Australian Bureau of Statistics, by 2064 there will be 9.6 million people aged 65 and over, and 1.9 million aged 85 and over, constituting 23% and 5% of Australia’s projected population respectively Source

Continue reading “Capitalizing On Australia’s Ageing Population”

How Would One Trade QAF?

QAF Ltd, formerly known as Ben and Company Limited, was incorporated in Singapore on 3 March 1958 as a private company. The Company was converted into a public company on 30 June 1967 and its stock units were quoted on the SGX on 25 August 1967.

The principal activities of the Company are those of an investment holding and management company. The principal activities of the Group consist of the manufacture and distribution of bread, bakery and confectionery products; operations of supermarkets; cold storage warehousing; trading and distribution in food, beverages, food related ingredients and commodities; production, processing and marketing of pork and feedmill production; and investment holding.  Currently, QAF is conducting a strategic review of its primary production business in Australia to enhance shareholder value. QAF said that the review is in its preliminary stages, and may result in a listing of the business segment in Australia or a complete sale of that business.

Continue reading “How Would One Trade QAF?”

Applying The PEG Ratio

The Price-to-Earnings to Growth (PEG) ratio is calculated easily and represents the ratio of the P/E to the expected future earnings growth rate of the company. In theory, a PEG ratio of above 1.0x seems to suggest that the stock is overvalued and vice versa. Let’s apply a modified PEG ratio to 4 countries: Malaysia, Singapore, Thailand and Indonesia.

Continue reading “Applying The PEG Ratio”

Stable Dividend Yield?

In search of yield in Singapore

Singapore Post Limited (SGX: S08), commonly abbreviated as SingPost, is an associate company of Singapore Telecommunications Limited and Singapore’s designated Public Postal Licensee which provides domestic and international postal services.

It also provides logistics services in the domestic market and global delivery services. SingPost also offers products and services including postal, agency and financial services through its post offices, Self-service Automated Machines (SAMs) and vPOST, its internet portal. Its headquarters is located in Geylang, Singapore.

Today, Singapore has 62 post offices, 299 Self-service Automated Machines (SAMs) and SAMPLUS, around 40 postal agencies and more than 800 licensed stamp vendors. There are also 8,907[2] posting boxes are installed at various locations throughout the island. See Link

Historically, SingPost offers a decent yield at 4.61% (currently), with a historical average dividend yield of 3.87% (since Sep 2014). There may even be a potential capital upside if there is a mean reversion in the dividend yield.

SGPost_DivYield_Oct 2016.png

As shown below, SingPost demonstrates stable annual financial performance, with DPS of SGD0.07 per share for the latest financial year ending 31 March 2016.

SGPost_Historical Financials_Oct 2016.png

Should there be a mean reversion in dividend yield from 4.61% to 3.87%, there may be potential upside from its current price of SGD1.52 to a trading price range of between SGD1.61 and SGD1.89. At current yield or higher required yield of 5.28% (i.e highest yield since Sep 2014), we may potentially see a trading price range of between SGD1.18 and SGD1.59.

SGPost_ForecastPriceRange_Oct 2016.png

The above analysis is a brief high-level desktop analysis and this does not substitute the need for a detailed fundamental analysis of the Company. The working / computation shown above is strictly for illustrative purposes.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Sorry, none as of now….

We apply a similar screening methodology (see link) to the Singaporean equities. Unfortunately, the screening process returns nil result.

SG_Sep16_RateSG_MY_Sep16_Results

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR INSTRUMENTS MENTIONED ABOVE.

Tougher Times Ahead

As we expect tougher times ahead, companies that may have less optimum financials may face potential challenges. We intend to scan for these companies based on the following criteria via CIMB iTrade filter tool:

  • Selected exchange: Malaysia & Singapore
  • Current ratio <0.85x
  • Total Debt / Total Equity >125%
  • EPS<=0.0 (i.e breakeven or loss-making)
  • Past revenue growth rate <=0% (negative or no growth)

The summary of results is shown as below (as of 24 Aug 2016: 4 companies from Malaysia, 11 companies from Singapore):

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Boustead Heavy / Boustead Holdings (MY)

We do not foresee any potential issue for this conglomerate as it has the backing of a strong institutional fund ( i.e LTAT) as its major shareholder. Further, it is on the path of de-leveraging process (Read More).

NPC Resources (MY)

NPC RESOURCES BERHAD is principally an investment holding company while its subsidiaries are involved in investment holding, provision of management services, operation of oil palm plantations and palm oil mills, trading of fresh fruit bunches (“FFB”), provision of transportation services, property letting and operation of hotel. The Company was listed on the Main Board of the Kuala Lumpur Stock Exchange on 7 May 2002. NPC has been raising proceeds from the divestment of its land assets for development of its planting capital expenditure. It is important for NPC to manage its gearing and working capital requirements whilst waiting for the maturity of its plantation assets.

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Perdana Petroleum

The fall in crude oil has taken a toll on many O&G companies, especially with the offshore support vessel (OSV) sector. Perdana Petroleum Bhd. engages in the provision of offshore marine support services for the upstream oil and gas industry in the domestic and regional markets. It owns and operates vessels to support offshore activities from exploration, development, facilities installation, hook-up and commissioning, production, operation, and maintenance. The company was founded on December 28, 1995 and is headquartered in Kuala Lumpur, Malaysia. Analysts are waiting for further streamlining and restructuring of this company after it has been taken over by another Malaysian-listed company, Dayang Enterprise (Read more). Nevertheless, it has recorded a substantial loss for Q2, FY2016:

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Kencana Agri

Kencana Agri Limited (“Kencana” or the “Group”) is a fast-growing producer of Crude Palm Oil (“CPO”) and Crude Palm Kernel Oil (“CPKO”) in Indonesia, with oil palm plantations strategically located in the Sumatera, Kalimantan and Sulawesi regions. Again, for palm oil companies, it is important to manage working capital requirements whilst waiting for maturity of its plantation assets.

Kencana.png

Linc Energy

Singapore-listed oil and gas company Linc Energy Ltd owes creditors A$289.4 million ($210.28 million) and should be wound up, according to its administrators.The company entered into voluntary administration a month ago, suffering from debt woes amid a slump in energy prices. Administrators PPB Advisory released a report on Friday recommending the company be liquidated.

Read more

Novo Group

Novo Group is a global steel trading, distribution, processing and manufacturing company that provides comprehensive services throughout the steel value chain. There has been a change in shareholding, paving way for a new business direction for the company:

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EMS Energy

EMS Energy posted a net loss of S$2.9 million for the first six months ended June 30, 2016. This was a reversal from a net profit of S$1.2 million a year ago.The engineering firm, which serves the marine, oil and gas industries, said the revenue decline was due to lower revenue from its “engineering, procurement and construction management – marine and offshore & trading” segment, which contributed S$9.9 million, compared to S$38.9 million in the previous year. the group plans to streamline its core operations, which include amongst other, cutting costs and manpower and building up its businesses to ensure steady stream of recurring income to weather the storm

Read more

Cedar Strategic

This property investment company has a history of corporate governance issues. On 9 April 2015, the Company announced that it has requested for mandatory trading suspension over the Company’s shares from the Singapore Exchange Securities Trading Limited (“SGX-ST”). On 14 April 2015, the Company announced that it will be engaging an independent auditor to conduct a special audit to, inter alia, review and/or ascertain (as the case may be) the accounts and transactions of the Group, and whether there are any irregularities in the accounts and transactions of the Group for the financial years ended 31 December 2013 and 2014. On 3 July 2015, the new Board (being all new directors unrelated to the previous Board, the “Board”) announced that the Company has appointed Baker Tilly Consultancy (Singapore) Pte Ltd as its independent auditor (“Special Auditor”) to carry out an independent review of the disbursements of the Company and its subsidiaries, namely Trechance Holdings Limited and Futura Asset Holdings Pte Ltd (“Futura”), for the financial years ended 31 December 2013 and 2014.

Read more

KS Energy

THE auditors of KS Energy have raised concerns over the ability of the firm to continue as a “going concern”. The energy services provider had incurred a net loss of S$260.4 million in the 2015 financial year, noted KPMG.

Read more

Renewable Energy

S-Chip company. Suspension due to lack of funds.

Read more

Attilan Group

Formerly known as Asiasons Capital.

Read more

CNA Group

Currently, under judicial management.

Read more

Mencast Holdings

Mencast Holdings: The maintenance, repair and overhaul solutions provider for the global offshore, marine and oil & gas sectors on Aug 19 entered into banking facility agreements with UOB to redeem its outstanding bonds. These include a secured loan of up to S$50 million and secured facilities of up to S$24.9 million comprising term loan facility, trade facility and money-market credit facility.

The funds from these banking facilities will be used for the redemption of the outstanding bonds of S$50 million issued by the group and due on Sept 12, the refinancing of certain existing loan facilities, general trade purposes and general working capital purposes.

Read more

Mary Chia

The company is closing its outlet in Tampines, which was the last directly-run branch of the company. The company had failed to pay about $570,000 in rent and compensation charges to landlord Tinifia Investment dating back to February 2009 for its Orchard Road outlet. 

Read more

In summary, detailed fundamental analysis is required to ascertain the financial health of the companies.

 

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR INSTRUMENTS MENTIONED ABOVE.