Wolf Money(portfolio update end June 2021)
Lone Wolf Fund(LWF)
Portfolio as at end of June 2021.
*Just for sharing. Not an inducement to buy or sell.
Commentary
STI index has the distinction of the worst performing market in June. Index is down just slightly under 3 percent. It is puzzling given the fact other markets like Kospi and the S&P 500 are making new highs in June. The underperformance shown by STI is shockingly glaring. The market sentiment turned decisively negative towards the end of the month. I suspect the heavy cash call and rights issue by some TLC(Temasek Link companies) taking a toll on investors sentiment. Dark days continue for investors of TLCs. I continue to stay clear of most TLCs which are facing falling profit from unprecedented disruption from all front. With only old economy companies making up STI index. Future look bleak in the short term for STI index to stage a quick turnaround.
Lone Wolf Fund is almost flat in June with Nam Lee Pressed Metal continuing its slow and steady up trend after the excellent 1H result reported in May. Pico Far East had basically done nothing over the course of June even thou the company reported 138% rise in earning. Singapore Medical Group was down about 3 percent.
I had reduced my holding in Nam Lee pressed metal by more than half. I didn’t get top price for my shares. I have to live with the fact Nam Lee share is not going to move up like Tesla space x. It remains an undervalued share with good dividend. All been said can’t complain, a profit is a profit. 15% inclusive of dividend is what I got. If the share go higher, I wouldn’t be unhappy since I continue to hold shares in company.
I had eliminated my holding in Singapore Medical Group from LWF with a slight loss (< 2%) due to weak general market sentiment. I use some profit from Nam Lee Press Metal to eliminate the underperforming SMG. Taking profit, cutting losses on underperforming keep the portfolio fresh, freeing capital for future redeployment. With the reduction in stocks, cash in portfolio had reached a 5 years high.
Rex international was added into my punter’s bowl. Market wisdom has it, the company oil production in Oman is in full swing. Given the price of Brent now, they are going to make decent profit in next reporting season in Aug. Given E&P share price are volatile in nature and fortunes are tied to price of oil , I urge caution ⛔️. Punter’s bowl bet where no serious money are involved with very tight cut loss level to follow. Rex international is not for everyone.
Pico Far East 1H 2021 result was up a commendable 138%. The recovery in China mice sector is underway which help Pico in its partial recovery in profitability. Earning came in at HKD58m which is more than double of HKD24m earned last year. Greater China business account for more than 60% of Pico revenue. I am expecting them to do a better second half as bigger contracts fulfilment for Dubai Expo(the biggest contact win since their participation in expo since 1988),Oman museum and Tokyo Olympic are underway. There are also provincial and local government events in celebration of the 100 years founding of communist party in China which might lead to more events. The feel good factor can be a key driver for more exhibitions in the coming months. Pico is expecting greater China business to grow as more enquiries (some contract are 25 % more as compare to last year edition) turn into actual events due to last year cancellation during covid 19 lockdown. ASEAN business to stage a slow recovery due to slow progress in vaccination. The breakdown of geography revenue as follow Greater China 60% with Asean and Middle East market contributed 15% each . UK and US contributing another 10 percent. I am guesstimating their full year earning to come in around HKD130-140m which is approx. HKD10-11c earning per share provided China covid 19 situation continue to show stability. They should be able to at least double the dividend they paid last year if partial recovery continue to hold. I continue to maintain my holdings in Pico.
I gave a trivial question in my May portfolio update. How do I know Pico Far East business is actually improving? True enough the business did indeed show good improvement for their latest half yearly result. Answer is right in social media. Pico been in the business of marketing and public relation has a Twitter account showcasing actual projects they did for their customers. They are certainly busier on Twitter compare to last year. We had a winner. Dennis, the Ya Kun toast set goes to you. I was asked why toast set only ? Lone Wolf investor is a non profit with no budget for better makan. Haha 😆
(Pico showcasing their projects done on Twitter source Pico Twitter account)
I continue to take a cautious approach towards deployment of capital with an occasional eye for value situational play. Till we meet again, have a profitable trading month of July. God Bless🙏
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Disclaimers
All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for information only. Buyer beware,do you own due diligence.
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