Wolf Money(portfolio update end July 2021) long post!
Lone Wolf Fund(LWF)
Portfolio as at end of July 2021.
Commentary
I am testimony of a living dinosaur. Who on earth still write or read such a long blog? Unfortunately I am not good at video making and I was not born with handsome good look to attract millions on Tik Tok. I choose to write because that is one way to express my thought better with my readers. The other ways are through quotes in the press and public speaking which I had done it a couple of times at sgx events during my days as a broker. I hope to convey as much thoughts given it is the only chance of the month to communicate extensively with you. I hope you bear with me for the next 5 mins.
What are the similarities between Loki(the marvel super hero) and Covid-19 virus? They are both sneaky and both come with different variants. The covid delta variant is very contagious. It is a possibility that it can’t be control (it is like trusting Loki to speak the truth). Some government are downgrading the status of virus from pandemic to endemic(sorry the virus win,I give up). UK government had declared freedom day on 19 July, knowing that vaccination required to prevent the virus had already been administered and there are only so much the UK government can do with 87 percent of the population had at least one shot of vaccine and 68 percent with two. Boris Johnson had rolled the dice on reopening their economy. Singapore are likely to follow the footsteps of the British to open our economy once full vaccination rate hits 70 percent. We are at 55 percent with two doses. Singapore hope to join the club of freedom by Sept. Just like marvel Avengers movie, the endgame of lockdown is near.
STI continue to be uninspiring amid another lockdown. Singapore market focus me look upon the US market with great envy which tested another new high in July. STI is going to struggle until the final reopening take shape. No more HA 3.0, no more ktv or satay induced lockdown, everyone is free to walk in public without mask. The covid situation had been play out many times over, the selling effect on the market seem to be weaker with every passing lockdown. STI are more likely to be affected by what the politicians did in US and In China than covid related incidents. I can see the light at the end of the tunnel. Singapore onward and upward.
Lone Wolf Fund had a profitable month of July with realised profit from Nam Lee and Rex Int(punter’s bowl). Capital are mostly reallocated to potential beneficiary in a post covid world.
I did some adjustment to my portfolio. I sold my last batch of Nam Lee Pressed Metal for good profit. Nam Lee is one of the beneficiary of this covid 19 crisis with demand for refrigeration containers going through the roof. This year they are likely to earn a record profit. I have decided to shift capital from Nam Lee for some reopening play. I had eliminated Rex Int from my punter’s bowl with profit. The share was sold due to selling pressure hitting my trailing stop. I had sized down the number of stock owned to just two companies so as to focus solely on news flow of those companies. I am also cautious with the over valuation in the US market experiencing a sharp pull back. When the US market sneezed, the Asian market catch a cold.
I wanted both a defensive bet just in case the covid situation drags on and a bet which can also benefit from reopening. Is it possible to have my cake and eat it? Thai Beverage PCL is what I found. My addiction for “liquidity” continue this month after oil related Rex Int in June. This time in form of Chang beer. Thai Bev share hit this year low in July due worsening covid 19 situation in Thailand and Vietnam. The share is trading close to 15x forward p/e which had provide the stock with good support for the past 14 years. I do felt the stock is attractively priced given their market dominance in Thailand,Vietnam and Myanmar. The market seem to focus solely on the slight weakness in beer consumption in Thailand even though profit did went up 8 percent for first half 2021 due to better cost control. The beer division only contributed about 15 percent profit to Thai Bev overall profit. Close to 85 percent profit did actually come from their Spirits business which is incredibly resilience with consumption staying almost unchanged. Most of the spirits are off trade consumption(95 percent are off trade sale with drink at home as default). Even if there is a lock down in Thailand, consumers are still buying their spirits which Thai Bev had an insane 90 percent market share. I can only think of one other company with that kind of market domination, The Singapore Pools.
I actually think the lockdown in thailand might even be beneficial to Thai Bev business. You can’t do much in a lockdown, you drink to get drunk. Just like my habit of having coffee every morning. Since the start of lockdown(HA 2.0) I have been drinking more coffee given there isn’t much thing to do beside sipping a few cups of coffee while writing my blog. I presume it applied to people who drink alcoholic beverage, good time you drink, lockdown you drink more. Raising a glass can be habitual. As Warren Buffett famous quote goes “Habits are too light to be felt and too hard to be broken”.
I am also betting on Thai Bev potentially relaunching their Beer Co listing which had postponed twice in the last 20 months. Interest in the stock may come back if they revisit their ipo aspiration for their Beer Co which can be worth up to USD 10b once covid situation in Thailand turn better. It will be a major corporate action given the size of the listing amounting to 13b SGD vs current market cap of 16b SGD. Thai Bev is a reopening play on Thailand tourism sector. Who doesn’t like a Chang beer when they visit Thailand? The Thai authority had piloted a sandbox reopening in Phuket allowing foreign visitors to visit the island with some degree of success. Do refer to my past write up on Thai Bev. All been said I will be moderating my return expectation on the Thai Bev given the big capitalisation of the company. Capital preservation is the first order of the day. Thai Bev will be coming out with a 3Q update around mid of Aug.
I continue to maintain my holding in Pico Far East. Share of the company is weaker in July due to weakness in the Hong Kong market in the aftermath of Chinese government crackdown on tech and education sector. I still believe partial recovery in Pico business is underway baring any sudden flare up in covid 19 case in China which account for 60 percent of their business. With the reopening of Singapore economy from Sept, I am expecting them to receive more enquires for events in Singapore. The second half is likely to be stronger in term of earning given major events like Tokyo Olympic Games and Dubai Expo are held in the later half of the year. Pico had won multiple contracts to provide services in those events.
Let me also take this opportunity to welcome the new and current readers to my blog. I am glad you took an interest in my blog. I hope you have an enjoyable time reading as much as I enjoy writing. I hope to do better. You can send me an email if you have any suggestion, feedback or question. Girlfriend boyfriend wife husband cat dog problem don’t email me. Just joking 😁. I wish you all the best in your investment journey. Stay safe and God bless. 🙏
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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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