Wednesday, May 6, 2020

The unfortunate case of Mapletree North Asia Commercial Trust - A deep analysis

Hi all, this is really a long post (warning), here are the subtopics I will be discussing.
  1. History of MNAC Trust
  2. Determine the Discount Rate via Capital Asset Pricing Model (CAPM)
  3. Determining Net Profit Margin (NPI)
  4. Derive the ratio of NPI to Distributable Income to Shareholders
  5. Analysis of Japan Properties Acquired in 2018
  6. Analysis of MBP and OPB (Japan Properties Acquired in Dec 2019)
  7. Analysis on Sandhill Plaza
  8. Analysis on Gateway Plaza
  9. Analysis of Festival Walk
  10. Summing up altogether+ Intrinsic Value



1. History of MNAC Trust

Festival Walk
Festival walk was developed jointly in 1998 by Swire and Citic Pacific and back then it was once the biggest shopping mall in HK once opened. It was then owned by Swire Properties and bought over by MNAC’s current sponsor Mapletree Investments @ 18.8 Billion so Swire Pacific could focus on investments in Mainland China in 2011.

Gateway Plaza
It was used to be known as Beijing Gateway Plaza and it’s situated at one of Beijing’s core business district. The building was completed in 2005 by Bestride and sold to HK Gateway in 2006. About a year later, Tin Lik, sold shares of Beijing Gateway Plaza (BVI) Limited which holds HK Gateway to RREEF China Commercial Trust. In April, Gateway Plaza was then acquired by Mapletree India China Fund at RMB 2.1bil, a private real estate fund belonging to Mapletree Investments Pte Ltd (MIPL).

In 2013, the Sponsor launched Mapletree Greater China Commercial Reit in 2013, consisting of the above two properties. In 2015, the Reit acquired Sandhill Plaza at RMB 1,881mil, which is located Zhangjiang HiTech Park, better known as Silicon Valley of Shanghai. The acquisition was yield accretive.

In March 2018, the Reit acquired 98.47% of 6 freehold commercial real estate in Japan from MJOF, a wholly owned subsidiary of Mapletree Investments Pte Ltd. The acquisition was also yield accretive and funded via equity through private placement and debt issuance.

A year later, protests broke out in Hong Kong after Carrie Lam introduced the extradition Bill. The bill was then suspended in June but it did little to restore calm in the city. Finally, in early Sept, she announced a formal withdrawal of the much-despised extradition Bill. However, it was too little too late, as protestors are calling for ‘five key demands, not one less’. 

On the 13th Nov, a peaceful gathering of protestors turned violent in the Festival Walk and they broke glass and ceiling, and set fire on Christmas tree. The building was closed for repair and reopened on 16th January, while its commercial office was reopened on 26 November. It was a very unfortunate that of all the shopping centre, the protestors chose to storm into the suburban shopping Mall in Kowloon Tong. Rents were not collected during the major recovery and repair works till its official opening. 

On 4th Dec, its sponsor, injected 2 more freehold yield accretive properties into MNAC Trust to reduce asset and income concentration in Hong Kong. The manger has also kindly waived the acquisition fee. It was seen as a positive move as it is yield accretive and improves its overall Weighed Asset Lease Expiry (WALE).

A few weeks after its opening come the Corona Virus, and Hong Kong was officially hit by a double whammy of  protests and Corona Virus outbreak. The current situation not only affects Festival Walk but across its portfolio in Japan and China.

So what should investors do with their investment under current situations?


Festival Walk mainly serves the day to day residents of Kowloon Tong and has been a very resilient mall that has withstand crisis such as SARS and GFC with growing Net Property Income (NPI) during such times. It is less dependent on tourist trade like Times Square, Landmark, Elements, Harbourcity. While operations in FW remains challenging, its NPI may not be much impacted by the gloomy outlook of tourism in HK hence a direct comparison in earnings with such properties may not be useful in forecasting it’s impact on FW’s future NPI.



My view is that the closure of Festival Walk is just one off and it’s just so unfortunate that of all malls, the protestors decided to protest in Festival Walk to mourn the death of a protestor and vandalized the building causing extensive damage that it has to be closed till January 2020.

Unfortunately, I was not able to calculate it’s Passing Rent to calculate the NPI (except Gateway Plaza) unlike how I analysed Champion Reit in the past because the figures are not released in annual report or quarterly report except in the IPO Prospectus. I emailed the management to enquire about Festival Walk's passing rent, but she seemed to suggest that the rent varies much between the different trade type. After some calculation, it’s NPI Yield is pretty stable at 80%, dipping to 75% during times like this, hence it’s possible to do some future projection of FW’s DPU if the ratio of NPI to distributable income is stable over the years, including the current FY 20/21.

I like analysing Reits with less profile of properties because it makes it easy to segment each property group to analyse it’s earnings. We will begin by looking at the overall numbers and start with Japan Properties, followed by the two properties in China and FW. Our focus here is about its earnings rather than the asset valuation. My only concern on property valuation is its revaluation loss affects the gearing, hence I will touch on this abit as well.

2. Determine the Discount Rate via CAPM

We will be using the CAPM model to determine the discount rate in this case.

Discount Rate= E(R)= Rf + β (Rm - Rf )

β= 0.97



Rf = 0.884% 

Rm= 5.34




Discount Rate= E(R)= Rf + β (Rm - Rf )
= 0.884 + 0.96 (5.34-0.884)
=5.21%

3. Determining NPI Margin

By dividing NPI/ Gross Revenue we get Net Property Income Margin.


The HK Protest started in June 2019 and then come the Covid 19 this year so the 2Q 2019 onwards its financials would be in distress. So let’s dive in to the last 3 quarters. June-Sept (2Q), Oct- Dec (3Q), Jan- Mar (4Q)


It’s NPI Margin fluctuated between 70% to 80% range, hence its more accurate to assess NPI margin of geographical breakdown or segment revenue, since the NPI of each segment is provided in the quarterly earnings report.


4. Derive the ratio of NPI to Distributable Income to Shareholders



The ratio is fairly stable at low 70% range, from 2015 to 2018, with the exception of 2019, where ratio was 82%. If we remove the distribution top up, the ratio would be 70.28%.
Hence for this exercise, we can use a 5 year average.



For simplicity lets use 0.72

Japan Properties

I will split to 2 sections: Properties acquired in 2018 & Properties Acquired in 2019.

5. Analysis of Japan Properties Acquired in 2018

Of the six properties acquired, four are single tenanted.


While there’s tenant concentration risks in each of the four buildings, I tend to see it positively since these tenants have undergone a few financial crises in the past and have been occupying the building since it was built. Relocating office is not an overnight decision and some single tenanted offices may have purpose-built facility for its daily operations. Despite Japan’s economy being affected by Covid-19, I still expect the properties to achieve 100% occupancy or close to full occupancy.

Furthermore, all four tenants have good credit ratings and three of four are three of the four single tenants are listed companies and I doubt they will be defaulting their rent in such a time as this.



Moreover, the properties have long WALE, and with 75% expiring in 2024/2025. 2024 is still sometime away and the covid-19 would have fade off. Hence, leasing risks is minimal for the next three years when economy is uncertain.


To project total distributions coming from these freehold properties, we assume a zero-growth rate from 2020 to 2024 and a 2% perpetual growth rate.

NPI (Japan Properties) for FY 2019/2020= S$39.937mil.

NPI (Japan Properties acquired in 2019)= S$1.8mil (derived from calculation in 6. Analysis of MBP and OPB (Japan Properties Acquired in Dec 2019)

NPI (6 Japan Properties) = S$39.937mil- S$1.8mil = S$38.137 mil.

Distributable income per unit from 6 Japanese Properties= (NPI of six Japan Properties* 0.72 ratio)/ (Discount rate * No. of units in issuance)

Sum of all PV= $797.464.5 mil

Per share Value from six Japan Properties= $797.464.5 mil/ 3,342,916,300 units

S$ 0.23855

6. Analysis of MBP and OPB (Japan Properties Acquired in Dec 2019)

To reduce concentration risks and geopolitical risks, on 4th Dec, management decided to acquire two more properties in Japan from its Sponsor Mapletree Investments. This move is DPU accretive, improved its WALE, and having more freehold properties in the portfolio.

The two properties started contributing to its NPI from 28th Feb 2020 for a month with MBP contributing 87.2% of Gross Rental Income and OBP contributes the remaining 12.8%.

The quarterly report doesn’t disclose the NPI contributed from the two properties, but I managed to get some information from the acquisition announcement report.

There is no projection on the gross revenue, but I managed to find the 6 months NPI for the two Japan properties ending Sep 2019.


Assuming zero growth and one month of contribution of NPI from mBay Point Makuhari Building & Omori Prime Building, NPI= S$ 10.8 m/6= 1.8mil.

If both properties contributed to NPI for the full 3 months,

5.4m/56.9m *100%= 9.5% that’s about right which should be higher than the relative figure of 6.4% considering significantly lower NPI from Festival Walk the past three months.

MBP
Prior to its acquisition in Dec, the committed occupancy is 84.8% which is above the average vacancy rate of 7.7-9%. One of the catalysts for this acquisition is for Reit manager to grow its NPI by improving the vacancy and capture rental reversion. In view of this Covid-19 impact on economy and comments from the REIT manager (see below), the base case would be that current occupancy to remain at 84.8%. I won’t expect further reduction in occupancy as it’s occupancy is already below average and it’s major tenants are big companies.
MBP currently contributes 87.2% of the Gross Monthly Rental



Top tenants:

  • NTT Urban Development, one of the world’s largest telecommunication companies with market cap in excess of US98billion listed on Tokyo Stock Exchange.
  • AEON Group ,with a market cap in excess of US$18 bil, listed on Tokyo stock exchange.

OPB

According to report, Vacancy rate expected to maintain low-level between 1.4% to 3.2% from 2019-2023. It was at 100% occupancy prior to acquisition in Dec.

Although it is a multi-tenanted building with smaller sized companies, the sectors which major tenants are belonging in: Eighting (Video Games Developer), Isuzu Linex (Transportation & Logistics) and Brillnics (Information Technology) seemed to be unscathed by the Covid 19 situation. In fact, IT and Video Gaming firms may even thrive during Coronavirus.

 I also did some Googling and guess what I saw. – No available space office at the moment


According to APAC office report outlook, gross face rental growth projected to be -1.1% in 2020 and 2.6% in 2021. If percentage directly translates to a -1.1% dip in NPI for 2020 and -2.6% dip for 2021, and staying constant till 2025 and perpetual growth of 2% from 2025 onwards.



Sum of all PV= $422.8749 mil

Per share Value from six Japan Properties= $422.8749 mil / 3,342,916,300 units
=S$ 0.1264988

7. Properties in China: Analysis on Sandhill Plaza

The latest quarterly report suggested that Sandhill Plaza benefitted from the current Covid 19 crisis, as cost sensitive tenants are inclined to shift to decentralized areas.  Moreover, the tenants are mainly TMT- Technology, Media and Telecom, which are less affected from the current situation.
The latest results speak for itself. Although occupancy dipped slightly, average rental reversion has increased 10%. 



While management commented that the performance is expected to be resilient, there’s not much room left to grow its occupancy as it has already hit 98%. The only way is to grow its average rent.
After tabulating the NPI over the past 4 years, it’s earnings are not very stellar, but growing slowly year on year at CAGR of 0.8%. Hence let’s use a perpetuity model of 0.8%.


CAGR = 0.8%

Using a perpetual CAGR of 0.8%,

Distributable Income for FY 2020/21 = 16,848 * 1.008 = 16.984784 mil.

Per share Value= 388.22 mil / 3,342,916,300 units = S$0.11613322

8. Analysis on Gateway Plaza

Similar to Sandhill Plaza’s analysis, I have done up the table for it’s NPI and distributable income from FY 2015-2019
And management commented:




There is a dip in NPI in 2017 as there’s a change in Property Tax derived for China. Hence additional property tax of $5.4mil.

I wrote to management to enquire on the passing rent and she replied that the passing rent is in the range of 320-350 RMB per sq/m. After digging into some past analyst reports, it was also recorded at 320-350 RMB per sq/m.

Using 320 RMB as passing rent & NLA of 106,456 sqm, Annual Gross Revenue =320 RMB per sm *106.456 *12 months = RMB 408.791040 mil.

Let’s assume that passing rent stays at 320 and slowly recovers to 350 by 2023 and occupancy rate increases from 85% to 96% by 2023.


SGD 1= RMB 5
Sum of all present value= $$ 915.282 mil
Per share Value= $$ 915.282 mil / 3,342,916,300 units =$0.2737975

9. Analysis of Festival Walk

I have to be honest that it’s very hard to analyse on this one. Even as Covid 19 situation improves, Hong Kong may have to brace for more protests. Even protestors are getting smarter; to maintain social distancing during protests and standing 1.5m apart. It’s currently double whammy for HK government, having to face Covid 19 with the protestor’s situation.

Although the current protests and Covid 19 may exert pressure on Festival Walk’s rent, there are two ways to see it. First scenario is that rental and occupancy will drop drastically like Gateway Plaza. Another scenario is that Festival Walk could still maintain at high 90% occupancy rate with only slight dip in passing rent. Reason being that Festival is a suburban mall and serves the residents in Kowloon Tong and its passing rent is lower than Champion Reit. Hence, tenants may be looking to locate their shops near residential malls like Kowloon Tong knowing that shopping centre is less tourist dependant and cheaper rental, driving up overall demand in suburban mall.
Initially I would want to project it’s NPI through passing rent psf but realized that it would not be accurate as there are rental reliefs extend throughout the next few months. 

I have also written an email to Elizabeth of investor relations to enquire on the passing rent psf. She replied me within 2 days and mentioned that rental rates differ among trade types, but yet to give me an answer on the average passing rent.

I did a comparison between Q2-Q4 for FY2019/20 vs FY2018/19 to assess its impact on the NPI. I included the rental topup as I wanted to remove impact on Festival Walk’s closure as I see it as a one time even and not a recurring one.



In fact the worst is yet to come, considering that April 2020’s NPI is not included and there will be more handing out of rental rebates.

I will use Q2-Q4 2019-2020’s result, and project a one time 20% reduction for 2021 Revenue due to rental reliefs, followed by a 5% increment from 2022-2025 (based on 2019-2020’s NPI) & 2% growth perpetually. I don’t think I am being over optimistic here, considering that it will take another 3 years to go back to FY 2018/2019’s NPI.




Sum of all present value= $$ 4,510.8379 mil
Per share Value= $$ 4,510 mil / ,342,916,300 units =$1.349372

However, many have doubts on it’s earnings after 2047 the year when ‘one country, two systems’, expires. Your guess is as good as mine, but Xi Jinping spoke in 2017 once that the principle of one country, two systems should remain unchanged. In my opinion, the CCP will extend the status of one country two systems, and property owners can extend the lease of ownership subject to a fee.

If the worst case scenario plays out, where Festival Walk will continue to collect earnings up to 2047,




Sum of present value from 2020 to 2047 
= $$ 4,510.8379 mil- 2,811.324 mil
= 1,699.513 mil.

Per share Value= 1,699.513 mil / 342,916,300 units= S$0.50839

10. Summing up altogether+ Intrinsic Value



What are your views about MNAC Trust. Do you think it's worth more compared to current prices?



Monday, October 21, 2019

Recent Action- Mapletree NAC Trust


I added 5,000 shares of Mapletree NAC Trust on 1st Oct at $1.31 and another 5,000 shares on 15th Oct at $1.26 against the backdrop on the current situation in Hong Kong. It’s a share counter that I had been wanting to add for a long time but couldn’t manage to catch the price and the current unrest in Hong Kong gave me the opportunity to buy on weakness.

It used to be known as Mapletree Greater China Commercial Trust (MGCCT) and got its new name after acquiring Tokyo freehold properties in May 2018. Despite having a portfolio of properties in China and Japan as well, 62% of its Net Property Income comes from Festival Walk, a suburban shopping Mall in Hong Kong which explains the drop in share price recently.



While the protests in Hong Kong continues with no end in sight send many Hong Kong shares tumbling, especially hospitality sector, and property counters; yet I see it as an opportunity to explore some defensive counters which are beaten down and MapletreeNAC Trust is one of them. Here are some of my thoughts and I will be focusing more on the Retail side of Festival Walk.

Resilient in the face of economic headwinds
Before Festival Walk was listed as a REIT, it was owned by Mapletree Investment since 2011. During the SARS incident in 2003, Asian Financial Crisis in 2008 and Occupy Central Movement in 2004, it managed to register revenue growth year on year, and I think management deserves a lot of credit for that. Its occupancy ratio stands at 100% since 2000. While Festival Walk isn’t immune to the political instability, its occupancy ratio track record and its ability to grow its sales and revenue during times of economic slowdown indicates its stability and resilient through economic cycles. Personally, I believe that the current political unrest in Hong Kong will be resolved eventually though recovery may take a long time. Hence, when bearish sentiment emerges, the sell down of this REIT presents an opportunity for me to ‘buy on weakness’.


Not so Touristy

Tripadvisor's customer review of Festival Walk

Festival walk is located near Kowloon Tong MTR station which caters to the daily needs and lifestyle of locals – Supermarket, F&B, cinemas, and a massive ice skating rink. Regular visitors to Hong Kong will be well aware that Kowloon Tong is a residential area above Kowloon City, and there is actually not much tourist attractions along the area. It serves as a heartland mall, a neighbourhood shopping centre that caters more for the locals. While locals would exercise more caution out in the streets, life still has to go on. They would still have to do their groceries in supermarkets, replenish their personal care products in Watson/Mannings and catch the latest movies during the weekends.
According to the news, recent protests are prevelant in CBD and touristy areas like Mongkok, Tsim Sha Tsui, CauseWay Bay and Central. The only incident I recently came to know about in Kowloon Tong is where protesters shone laser pointers at PLA Barracks. This should point to the fact that Festival Walk has limited impact by the protests.

Because the sponsor is Mapletree

Mapletree North Asia Commercial Trust also has the advantage of a strong sponsor, Mapletree Investments with aligned interest with unitholders. Its alignment is evident in its management fee structure, which consists of a base fees- 10% of distributable income for financial year and performance of 25% of difference in DPU in the preceding financial year instead of Net Property Income (NPI). In instances where fees are pegged to its NPI, there may be incentive for them to acquire more properties to artificially boost its income to earn a higher fee. Such structure only incentivises the manager to grow its assets rather than improving its distribution per unit.
 In the case of Mapletree NAC’s payout structure, the REIT manager will earn a higher performance fee by acquiring more properties which are yield and DPU accretive.

One of the hallmarks of having a reputable and good sponsor also its potential to grow its portfolio by acquiring properties from its sponsor through its right of first refusal. Having a credible sponsor also eliminates the possibility that the REIT is seen as a dumping ground for the sponsor to divest their unwanted properties to raise additional cash. While there’s certain degree of concentration risks with 62% of NPI derived from a single country, the REIT manager has diversifying the risks over the years by actively acquiring properties from China and Japan, which are yield accretive and improving the DPU at the same time; Not to mention a pipeline of properties from the sponsor that could be injected into the Reit to further diversify the portfolio.

Distribution and Risks- Foreign Exchange Risks and Regulatory Risks








I have done up the above charts for its quarterly distribution since 2013 till present. Unfortunately, unlike Mapletree Industrial Trust, there are some quarters which DPU was lower than its previous quarter year-on-year. The lower distributable income was attributed to a lower gross revenue and higher property expenses: lower gross revenue due to a weaker HKD and RMB, and higher property expenses due to additional property tax from Gateway Plaza imposed by local authorities with effect from July 2016. This affected the 3Q DPU as well, due to a higher property tax of $3.2mil.

For the FY2017/18 4Q, there was a significant dip in DPU compared to its previous year which is mainly due to reversal of VAT payable in 4Q FY2016/17 which was assumed a higher rate hence giving that previous quarter a slight boost in DPU.

You may notice that SGX listed Reits with majority of assets in Singapore are traded at a premium compared to their peers with more overseas exposure (i.e. higher yield, lower p/b) as the market perceives them to be safer and subject to lesser risks i.e. currency risks, regulatory risks and political risks. In the case of Mapletree NAC Trust:



From a layman’s perspective, because a Reit that higher exposure to overseas market is riskier than a domestic reit, you need a higher return to compensate the risks you are taking.

I have skimmed through many news articles about hospitality sector in HK experiencing sharpest downturn since 1997/SARS. The slowdown in tourism is one thing, but the actual consumer spending and impact on Reits are hard to guage. The earnings season is up and as Mapletree NAC REIT will be releasing its 2Q financial results on 25th Oct, I will be keeping an eye on its earnings as this will be the first quarter where we will be able to gauge the extent of Hong Kong protests affecting its rental income and to decide my next move.

If you are keen to follow my posts or get updates, do like/follow my FB page here where I will update it when there's a new post and when I buy/sell shares.

Monday, August 12, 2019

Personal & Portfolio Update


Hi!

It’s been so long since I blogged! Since my last post, I kept telling myself I should start blogging soon but procrastinated about it all the time and 1.5 years like passed like that. Part of the reason why I stopped blogging for awhile was that I committed most of my days at work, including many weekends and I just wanted to do nothing when I reach home and just wanted some rest.

Though I stopped blogging for awhile, I regularly kept myself updated on the stock market: particularly in SG, HK and US, but lacked time to do research on individual stocks. (more macro then micro) I have been watching the HK updates like weather report these days, since I loved HK and it's my favourite holiday destination with no jet lag and good food. Another reason why I have been keeping up with the HK news was that I also invested in HK shares which started well this year but underperformed recently due to protests. The local market didn’t fare well either these few weeks due to the uncertainty in US China trade war. There’s a saying to be greedy when others are fearful; hence I have been trying to identify good stocks which were sold off steeply.

Since it’s 1.5 years since you last heard from me; I shall start off with personal and portfolio updates.
There isn’t much personal changes; I am still staying at the same place, same job, same hobby, same height and weight etc. The only change is that I have bought a car last month. I used to take public transport for meetings and take cab/grab when I am in a rush. However, as my business grows, it makes more sense to own a car. It’s an investment to my business, in a sense to trade money for time. With a car, I can go for more meetings, contact my clients and reply some emails along the way. During the weekends, I can explore nice food places which may not be easily accessible by public transport. 

The drop in COE also gave me another reason to purchase it at the point in time. I bought Hyundai Avante 1.6S, with a 27k COE. My initial plan was to get a Toyota because Japanese cars are always known to be reliable; which costs about $97k but what stopped me from going ahead was the prerequisite is to take a 5-year loan. A car loan uses the Flat Rate method, the interest you pay is fixed based on the original principle. Hence, I suggest not to be fooled by its low advertised interest rates but focus on the effective interest. You can read more here: https://www.singsaver.com.sg/blog/car-loan-interest-secretly-double-seems I went ahead with Hyundai Avante 1.6S with a two-year loan of $30k (because that’s their min loan size) and paid off $50k. 






As for portfolio updates, there has been much transactions in my portfolio as I took profits/partial profits on Singtel, SATS, First Reit, SGX, MicroMechanics, M1, ComfortDelgro and 800Super.




SGX Portfolio with CDP
Total Value= $285,034






I added HKLand, Mapletree Industrial Trust, Parkway Life Reit, and UOB and increased my position in three local banks over the months. I still see much value in local banks as they are traded 1 to 1.3X book value, with dividend yield around 4% with less than 50% payout ratio.

Along the way, I came out with an investment strategy for my equity portfolio. Moving forward, I will be focusing on US and HK stock market for growth stocks and SG stock market for dividend income. For SG dividend stocks I am referring more to Banks and REITS.

Low interest rate environment and Federal Reserve's decision to lower interest rate gave REIT a boost and had a good run this year. With the tightening yield spread, I don't see much value in local Reits and many investors are exploring Reits with property overseas with higher yields such as Sasseur REIT, Prime  REIT or Business trust such as ARA and Eagle Hospitality.

I have opened a DBS Treasures Accounts to enjoy lower trading fees (no min charges) and since then transferred some of my SG shares which I planned to sell in the next 12 months.


DBS Treasures Securities= $84,129



I have changed the monthly purchase of ST Engineering to Singtel late last year. I then sold away the shares which I bought, (yet I still hold STI ETF). Now I am setting aside $1,000/month in DBS shares. At. It is paying a dividend of, and with a payout ratio of, it is attractive in my opinion compared to Reits.

ShareBuilder = $1,945



I started buying US stocks early this year via StanChart Online Trading with more focused on growth companies with long term plans to own about 15-20 US stocks. Most of them are trading at high pe ratio, or no pe ratio at all as they are in their stage of growth but loss making. Hence, I invested in small amount each time, and plan to add them in batches during market correction.

StanChart Portfolio Value= $52,219


The Standard Chartered Statement is updated as of 31 July. I have added 3,000 shares of Champion Reit and 10 more shares of Twilio.


I have closed my MayBank KimEng account as some of you may know they stopped the monthly investment plan. I transferred my Tencent Holdings Shares to Standard Chartered and the staff are kind to waive off the transfer fees.

For Nikko AM STI ETF under POSB InvestSaver, not much changes so far. I decided to keep it that way.

As for my HK portfolio with HSBC, there has been no changes too other than adding Xiaomi and PingAn Insurance. Looking at current situation in Hong Kong, I am having second thoughts if I should continue investing in 2800.HK. I will update this again in the next post.

POSB InvestSaver= $12,634


HSBC Portfolio= $35,749


80 Shares of Tencent 0700
600 Shares of Xiaomi 1810
250 Shares of Ping An Insurance 2318
4,102 Tracker Fund of HongKong 2800


One of my favourite shares in my watchlist is Hang Seng Bank. If you have been to Hong Kong, you will see Hang Seng ATM machine like you see POSB/DBS ATM in Singapore. It's actually HK's local bank, and owned by HSBC. 

I briefly looked through their financial statement and I thought that their results were more impressive than DBS. Their managed to achieve a higher ROE of 16%,vs DBS of 12.1%, Cost/Income ratio is 36% compared to DBS of 43%. Common Equity Tier 1 Ratio if 16.% and 13.9% for DBS. The only reasons which stopped me from investing is it's high valuation in terms of pb ratio of 2 times and pe ratio of 16. Recently the pe ratio has eased to 13 due to higher quarterly earnings reported and the sell down of it's shares but with the situation in HK I am having second thoughts now to invest.

Cash Available for investment= $57,000

Total= $528,710

I am sorry if this post doesn't really add much value other than showcasing my portfolio. Reason being that I hadn't been doing much stock research these days due to lack of time. I am trying to restart the blogging momentum. Will update when I find interesting stocks to invest.

If you are keen to follow my posts or get updates, do like/follow my FB page here where I will update it when there's a new post.