134 Singapore Property Stocks with Discounted NAV Strategy (为善最乐)

In recent Ein55 Charity Course on Global Discounted NAV (DNAV) Stocks, we have raised fund of $24,488 to help needy families in Singapore. Under the spirit of charity, Dr Tee decides to share 134 Singapore Property Stocks and 3 global DNAV stocks in 3 countries with readers (detailed strategies including Ein55 Optimism levels, Ein55 intrinsic values and DNAV will be shared):

1) Singapore DNAV Stock – Hongkong Land (SGX: H78)

2) Malaysia DNAV Stock – Paramount (Bursa: 1724)

3) Hong Kong / China DNAV Stock – Yuexiu Property (HKEx: 123)

Dr Tee, Ein55 Mentors & Graduates have together organized 11 charity investment courses (REITs in Nov 2015, May 2017 and May 2019, High Dividend Stocks in Mar 2016, Oct 2017 and Nov 2019, Global Growth Stocks in Apr 2018 and Nov 2020, and Discounted NAV Stocks in Sep 2016, Nov 2018 and May 2021) in the past 6 years, donating net income of around $222,000 to Tzu Chi 慈济 Singapore.

We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future (为善最乐).

Discounted Net Asset Value (DNAV) Strategy is valuation of company business, firstly based on the Net Asset Value (NAV) listed in current Balance Sheet. Then, we determine the net cash that would be received if all assets were sold and liabilities paid off.  Various discounts will be applied based on different quality of asset classes.  It is safer to buy stock with share price below the Discounted NAV (much more conservative than price below NAV or Price-to-Book ratio, PB < 1). Unlike PB method mainly applied for asset rich company (eg. property stocks), DNAV method can be applied in non-property or not cash-rich stocks. However, Ein55 Optimism strategies have to be integrated to avoid value trap, i.e. Buy Low Get Lower for undervalue stocks.

The best time to buy global DNAV stocks and 134 Singapore property stocks is always during global stock crisis (eg. Year 2020-2021 during pandemic, 2008—2009 during subprime crisis, etc), not only able to maximize the dividend yield (due to lower entry share price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). Singapore property stock investing is not based on undervalue strategy (Buy Undervalue Sell Overprice) alone, may be integrated with dividend investing, growth investing, swing trading, momentum trading, cyclic investing, defensive investing and other Ein55 strategies.

There are 134 Singapore property stocks (not all are giant stocks with Dr Tee criteria), based on the last price traded (7 May 2021), sorted by 3 key Fundamental Criteria:
1) ROE (a criteria for growth stocks, eg. ROE > 5%),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 3%),
3) Price-to-Book (PB) ratio, Price/NAV (a criteria for undervalue stocks, eg. PB < 1).

From the table sorted below, over 75% (101/134 stocks) are undervalue (Price to Book ratio, PB < 1), mainly due to COVID-19 stock crisis, affecting property construction business with bearish share prices but property asset valuation remains stable.  There are only 20% (27/134 stocks) have growing businesses (over 5% ROE, Return on Equity) while over 50% (72/134 stocks) were making losses during pandemic in Year 2020. There are nearly 50% (62/134 stocks) were paying dividend but only 22 stocks (16%) having dividend yield over 3%, potential for dividend investing.

No134 SG Property StocksROE (%)PBDY (%)
13Cnergy (SGX: 502)1.1
2A-Smart Holdings (SGX: BQC)0.8521.8
3AEI Corporation (SGX: AWG)2.6
4Aims Property Securities Fund (SGX: BVP)0.41.9
5Asia-Pacific Strategic Investments (SGX: 5RA)0.8
6APAC Realty (SGX: CLN)10.621.15.1
7Abterra (SGX: L5I)50.492.1
8Acromec (SGX: 43F)1.9
9Alset International (SGX: 40V)53.451.1
10Amara Holdings (SGX: A34)0.5
11Amcorp Global (SGX: S9B)0.6
12AnnAik (SGX: A52)0.2940.31.8
13Astaka Holdings (SGX: 42S)5.5
14BBR Holdings (SGX: KJ5)0.5
15BRC Asia (SGX: BEC)7.6931.31.3
16Blackgold Natural Resources (SGX: 41H)
17Boldtek Holdings (SGX: 5VI)0.7
18Bonvests (SGX: B28)0.50.3
19Boustead Singapore (SGX: F9D)9.011.42.9
20Boustead Projects (SGX: AVM)7.4691.10.8
21Bukit Sembawang Estates (SGX: B61)5.7480.90.9
22Bund Center Investment (SGX: BTE)2.1970.97.3
23CSC Holdings (SGX: C06)4.5310.4
24CapitaLand (SGX: C31)0.82.5
25CASA Holdings (SGX: C04)2.6380.35.6
26Chemical Industries (Far East) (SGX: C05)2.7820.42.1
27China International Holdings (SGX: BEH)14.620.39.1
28China Yuanbang Property Holdings (SGX: BCD)5.9910.1
29Chip Eng Seng Corporation (SGX: C29)0.44.4
30City Developments (SGX: C09)0.91.0
31DISA (SGX: 532)4.3
32Debao Property Development (SGX: BTF)0.1
33ETC Singapore (SGX: 1C0)0.3
34Edition (SGX: 5HG)1.6
35Engro Corporation (SGX: S44)8.5630.62.0
36Fraser and Neave – F & N (SGX: F99)5.0260.73.5
37Far East Orchard (SGX: O10)0.1240.42.6
38Figtree Holdings (SGX: 5F4)0.52.9
39First Sponsor Group (SGX: ADN)5.9960.82.2
40Fragrance Group (SGX: F31)0.1330.6
41Frasers Property (SGX: TQ5)1.4770.50.9
42GYP Properties (SGX: AWS)0.4
43Gallant Venture (SGX: 5IG)0.9
44Golden Energy and Resources (SGX: AUE)2.1010.7
45Goodland Group (SGX: 5PC)0.31.0
46GuocoLand (SGX: F17)2.2340.53.6
47HL Global Enterprises (SGX: AVX)0.2630.4
48Hatten Land (SGX: PH0)0.9
49Heeton Holdings (SGX: 5DP)0.2
50Hiap Hoe (SGX: 5JK)0.40.8
51Hiap Seng Engineering (SGX: 510)
52Ho Bee Land (SGX: H13)3.7820.52.9
53Hock Lian Seng Holdings (SGX: J2T)2.080.61.0
54Hong Fok Corporation (SGX: H30)0.31.2
55Hong Lai Huat Group (SGX: CTO)0.3
56Hong Leong Asia (SGX: H22)5.3120.81.0
57Hongkong Land Holdings (SGX: H78)0.34.5
58Hor Kew Corp (SGX: BBP)0.8610.2
59Huationg Global (SGX: 41B)0.2
60Hwa Hong Corporation (SGX: H19)2.2211.03.3
61IPC Corporation (SGX: AZA)0.2
62ISOTeam (SGX: 5WF)1.1
63Imperium Crown (SGX: 5HT)0.2
64Jasper Investments (SGX: FQ7)
65KOP (SGX: 5I1)0.4
66KSH Holdings (SGX: ER0)4.7570.66.0
67Keong Hong Holdings (SGX: 5TT)0.4
68Keppel Corp (SGX: BN4)0.91.9
69Keppel Reit (SGX: K71U)0.94.4
70King Wan Corporation (SGX: 554)0.7530.2
71Koh Brothers Group (SGX: K75)0.2
72Koon Holdings (SGX: 5DL)
73KORI Holdings (SGX: 5VC)0.8520.3
74LHN (SGX: 41O)19.850.94.7
75Ley Choon Group (SGX: Q0X)1.1
76Lian Beng Group (SGX: L03)4.060.32.0
77Low Keng Huat (Singapore) (SGX: F1E)7.0070.55.1
78Lum Chang Holdings (SGX: L19)0.63.3
79Luminor Financial Holdings (SGX: 5UA)0.5
80MYP (SGX: F86)0.4
81Metro Holdings (SGX: M01)2.150.42.7
82OIO Holdings (SGX: KUX)
83OKH Global (SGX: S3N)0.3
84OKP (SGX: 5CF)2.6960.53.8
85OneApex (SGX: 5SY)1.1
86Oxley Holdings (SGX: 5UX)1.03.3
87PSL Holdings (SGX: BLL)0.3
88Pacific Century Regional Development (SGX: P15)1.08.7
89Pacific Star Development (SGX: 1C5)
90Pan Hong (SGX: P36)15.440.52.4
91Pavillon Holdings (SGX: 596)0.4
92Pollux Properties (SGX: 5AE)0.0960.6
93PropNex (SGX: OYY)34.44.94.9
94Raffles Infrastructure Holdings (SGX: LUY)13.350.5
95Regal International Group (SGX: UV1)15.284.3
96Renaissance United (SGX: I11)0.3
97Rich Capital Holdings (SGX: 5G4)1.4
98Roxy-Pacific Holdings (SGX: E8Z)1.0
99Ryobi Kiso (SGX: BDN)2.2
100SHS Holdings (SGX: 566)0.8
101SLB Development (SGX: 1J0)6.8380.63
102SP Corporation (SGX: AWE)2.4590.38
103Sasseur Reit (SGX: CRPU)4.2541.017.06
104Second Chance Properties (SGX: 528)1.7860.781.61
105Sin Heng Heavy Machinery (SGX: BKA)1.0630.331.54
106Sinarmas Land (SGX: A26)3.5450.430.32
107SingHaiyi (SGX: 5H0)0.46
108SingHaiyi Group (SGX: 5IC)5.3190.492.63
109Singapore Land Group (SGX: U06)1.230.531.28
110Sinjia Land (SGX: 5HH)0.95
111Soilbuild Construction (SGX: S7P)0.75
112Straits Trading (SGX: S20)3.3470.712.22
113Sysma Holdings (SGX: 5UO)2.1210.59
114TA Corporation (SGX: PA3)0.38
115T T J Holdings (SGX: K1Q)0.4212.614
116Tai Sin Electric (SGX: 500)5.3640.8164.348
117Thakral Corporation (SGX: AWI)4.4180.4076.522
118Thomson Medical Group (SGX: A50)4.946
119Tiong Seng Holdings (SGX: BFI)0.2991.562
120Top Global (SGX: BHO)0.531
121Tosei Corporation (SGX: S2D)6.1090.5832.585
122Tritech Group (SGX: 5G9)1.063
123United Overseas Australia – UOA (SGX: EH5)6.4010.7292.678
124UOL Group (SGX: U14)0.1340.6562.3
125USP Group (SGX: BRS)0.204
126Vibrant Group (SGX: BIP)2.4560.307
127Wee Hur Holdings (SGX: E3B)6.810.4512.439
128Wing Tai Holdings (SGX: W05)0.0880.4541.593
129Yanlord Land Group (SGX: Z25)8.3060.4284.857
130Yeo Hiap Seng (SGX: Y03)0.8922.21
131Ying Li International Real Estate (SGX: 5DM)0.391
132Yoma Strategic Holdings (SGX: Z59)0.405
133Yongmao Holdings (SGX: BKX)7.6820.3590.309
134Yongnam Holdings (SGX: AXB)0.308

However, not all the 134 Singapore property stocks listed are giant stocks. A growing business in the past may not be sustainable during COVID-19 period and an undervalue stock may remain lagging in share prices for many years, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a low PB or low PE or high dividend yield stock may be a value trap as this may be the result of lower share price with weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies. 

Let’s learn these 3 global Discounted NAV giant stocks in 3 countries, understanding the business nature, investment clock and unique strategy.

1) Singapore DNAV Stock – Hongkong Land (SGX: H78)

Hongkong Land is part of Jardine Group with over 100 years of history. It has property businesses mainly in Hong Kong, China and Singapore with 61% in investment properties (main source of rental income) and 39% in development properties. The West Bund project in Xuhui Shanghai of China would be major revenue contributor in the next few years.

Hongkong Land is still at low Ein55 Optimism (<25%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $9/share. This stock has Discounted NAV of $15/share (close to NAV, implying very high quality of its asset), providing high safety of margin for long term investors with stable dividend payment (about 4-5% dividend yield, depending on entry price). Assuming extreme devaluation of Hong Kong property market by 50%, Hongkong Land would still have $7.50/share value for very conservative investors.  The “loss” of Hongkong Land in Year 2020 is mainly accounting loss due to devaluation of property but cashflow is still strong to support the dividend payment, behaving as if a REIT.

Recent acquisition of parent company, JSH (SGX: J37) by JMH (SGX: J36), has helped to support the prices of other stocks in Jardine group including Hongkong Land.  Jardine Group may have more corporate actions in future to release the hidden value of subsidiary stocks including Hongkong Land, Jardine Cycle & Carriage – JCC (SGX: C07), Dairy Farm International (SGX: D01) and Mandarin Oriental Hotel (SGX: M04). However, the recovery pattern of share prices for undervalue stock can be different from growth stocks. Hongkong Land is more suitable for long term investors with patient, positioning as a mid-fielder stock, good balance between capital gains and dividend as passive income.

Readers may read earlier articles (during pandemic with low optimism prices) by Dr Tee for more details on Jardine Group of stocks including Hongkong Land:
https://www.ein55.com/tag/jardine/

2) Malaysia DNAV Stock – Paramount (Bursa: 1724)

Paramount is a Malaysia property development stock with 50 years of history in businesses. After divestment of education segment business, Paramount has drawn up a new 5-year (2020 – 2024) strategic roadmap to focus on Property development and concentrate on landed developments and integrated developments in Malaysia. In the next 5 years, Paramount plans to venture into overseas property development projects, expecting to contribute approximately 10% of the Group’s revenue. It enjoys recurring income from investment property and minority interest in education business.

Paramount is still at low Ein55 Optimism (<25%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $1.20/share. This stock has Discounted NAV of $2.17/share (20% lower than NAV, partly due to lower value of non-property business), providing high safety of margin for long term investors with stable dividend payment (about 4-5% dividend yield, depending on entry price). Assuming extreme devaluation of Malaysia property market by 50%, Paramount would still have $1.08/share value for very conservative investors.

Malaysia property stock investing is complicated by worse pandemic condition, political instability and weaker consumer purchasing power. Paramount is more suitable for long term investors with patient, positioning as a mid-fielder stock, good balance between capital gains and dividend as passive income.

Readers may read earlier article (during pandemic with low optimism prices) by Dr Tee for more details on other Malaysia stock affected by pandemic:
https://www.ein55.com/tag/malaysia-stocks/

3) Hong Kong / China DNAV Stock – Yuexiu Property (HKEx: 123)

Yuexiu Property is a China property developer company (state-owned enterprise), originated in Guangzhou, expanding property businesses to other 19 cities in China. In 2019, Guangzhou Metro (another state-owned enterprise) becomes the second largest investor of Yuexiu Property, deepening the strategic collaboration between 2 giants (transportation and property).

Yuexiu Property is at moderate low Ein55 Optimism of about 40%, near to Ein55 intrinsic value of $2.20. This stock has Discounted NAV of $1.27/share (much lower than its NAV), higher than its current share price, therefore no safety of margin for very conservative investors. Yuexiu Property may still be considered for growth investing with dividend payment (about 6-7% dividend yield, depending on entry price). Trend-following strategy with S.E.T. (Stop Loss, Entry, Target Prices) trading plan may be integrated into stock investing without DNAV protection.

Yuexiu Property belongs to Yuexiu Group, which also owns 2 other subsidiary stocks, Yuexiu Reit (HKEx: 405) and Yuexiu Transport Infrastructure (HKEx: 1052) which may also be considered for dividend stock investing. Major shareholder and sponsor is Guangzhou local government, providing strong support to Yuexiu Group of stocks.

Readers may read earlier articles by Dr Tee for more details on other global and local property stocks including but not limited to Yuexiu Property:
https://www.ein55.com/category/property-market/

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There are over 1500 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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Latest 30 STI index Stocks Strategies (卧虎藏龙)

30 STI index stocks represent the overall Singapore stock market performance. The list is dynamic, recent new comers are Keppel DC Reit (replacing SPH) and Frasers Logistics and Commercial Trust (replacing Jardine Strategic Holdings). During the COVID-19 stock recovery, there is a sector rotation, investors start to pay more attention to cyclical stocks (eg. bank, properties and transportation sectors, etc), which are main businesses of 30 STI stocks.

In this article, you will learn from Dr Tee on the Latest 30 STI Index Stocks Strategies, some may be considered for longer term investing and / or short term trading with COVID-19 recovery stock rally. Bonus for readers who could read every words of the entire article, learning unique strategy to position in 30 STI Index stocks for both passive incomes (dividend) and capital gains with potential share price appreciation. Both Ein55 Optimism levels and intrinsic values will be shared for 6 groups of STI stocks with potential. Learn key applications of ALL 30 STI stocks with 1 article here:

4 Banking & Finance STI Stocks (35% of STI):
– DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Singapore Exchange (SGX) (SGX: S68)

4 Property STI Stocks (9% of STI):
– CapitaLand (SGX: C31), City Development (SGX: C09), Hongkong Land (SGX: H78), UOL (SGX: U14)

7 REITs STI Stocks (11% of STI):
– Ascendas Reit (SGX: A17U), CapitaLand Integrated Commercial Trust (CICT) (SGX: C38U), Frasers Logistics & Commercial Trust (SGX: BUOU), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U)

4 Jardine STI Stocks (14% of STI):
– Jardine Matheson Holdings – JMH (SGX: J36), Jardine Cycle & Carriage (SGX: C07), Hongkong Land (SGX: H78), Dairy Farm International (SGX: D01)

4 Transportation STI Stocks (6% of STI):
– ComfortDelGro (SGX: C52), Singapore Airlines (SIA) (SGX: C6L), SATS (SGX: S58), Yangzijiang Shipbuilding (YZJ) (SGX: BS6)

8 Other Sectors STI Stocks (27% of STI):
– Genting Singapore (SGX: G13), Keppel Corp (SGX: BN4), ST Engineering (SGX: S63), Sembcorp Industries (SGX: U96), Singtel (SGX: Z74), Thai Beverage (SGX: Y92), Venture Corporation (SGX: V03), Wilmar International (SGX: F34)

Investing in stock index of a country with growing economy (eg. Singapore STI, China A50 / Hong Kong HSI, USA S&P500 and Nasdaq, Malaysia KLCI, etc) is a defensive strategy as the stock index is well diversified over a portfolio of large cap stocks (卧虎藏龙) from various sectors, able to minimize unsystematic risks due to uncertainties in businesses and sector cycles. An investor may invest in stock indices with ETFs (Exchange Traded Fund), eg. STI Singapore has 2 ETFs: SPDR STI  ETF (SGX: ES3) and Nokko AM STI ETF (SGX: G3B), can be traded like any stock.  This provides a way for small capital investor to diversify in investment with minimal capital, eg. 1 STI ETF equals to investing in 30 STI stocks at the same time with different weightages.

The best time to buy 30 STI stocks or index ETF is always during global stock crisis (eg. Year 2020-2021 during pandemic, 2008—2009 during subprime crisis, etc), not only able to maximize the dividend yield (due to lower entry share price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). STI Index stocks investing is not for dividend collection alone, may be integrated with growth investing, swing trading, momentum trading, cyclic investing, defensive investing, undervalue investing and other Ein55 strategies.

30 STI index stocks represent the 30 largest stocks by trading market capitalization (trading price x trading volume). Therefore, not all are giant stocks (based on Dr Tee giant stock criteria).  Below are the 30 STI index component stocks based on the last price traded (20 Apr 2021), sorted by 6 main groups with details of 3 key Fundamental Criteria:
1) ROE (a criteria for growth stocks, eg. ROE > 5%),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 3%),
3) Price-to-Book (PB) ratio, Price/NAV (a criteria for undervalue stocks, eg. PB < 1).

From the table sorted below, over 50% (18/30 STI stocks) have growing businesses (over 5% ROE, Return on Equity) while 7 stocks were making losses during pandemic in Year 2020. With recovery of pandemic, there are only 20% (6/30 STI stocks) are still undervalue (Price to Book ratio, PB < 1). There are over 50% (16/30 STI stocks) have dividend yield over 3%, potential for dividend investing. STI ETF has an average dividend yield of about 3%, may be considered as replacement for long term fixed deposit but it requires a stock crisis to start this saving scheme at lower Ein55 optimism level to minimize the potential capital loss due to emotional stock market.

However, not all the 30 STI index stocks listed are giant stocks. A growing business in the past may not be sustainable during COVID-19 period, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a high dividend yield stock may be a value trap as this may be the result of lower share price with weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies. 

No30 STI StocksROE (%)PBDY (%)
1Ascendas Reit (SGX: A17U)4.971.44.8
2CapitaLand Integrated Commercial Trust (CICT) (SGX: C38U)2.6831.14.0
3CapitaLand (SGX: C31)0.92.4
4City Development (SGX: C09)0.91.0
5ComfortDelGro (SGX: C52)2.3711.50.8
6DBS Bank (SGX: D05)8.6421.43.0
7Dairy Farm International (SGX: D01)20.54.43.9
8Frasers Logistics & Commercial Trust (SGX: BUOU)12.061.34.8
9Genting Singapore (SGX: G13)0.8841.41.1
10Hongkong Land (SGX: H78)0.34.4
11Jardine Matheson Holdings JMH (SGX: J36)1.62.7
12Jardine Cycle & Carriage (SGX: C07)8.0731.02.4
13Keppel Corp (SGX: BN4)0.91.8
14Keppel DC Reit (SGX: AJBU)8.6472.33.4
15Mapletree Commercial Trust (SGX: N2IU)9.3851.23.8
16Mapletree Industrial Trust (SGX: ME8U)10.311.64.1
17Mapletree Logistics Trust (SGX: M44U)8.2351.53.6
18OCBC Bank (SGX: O39)7.2271.12.7
19SATS (SGX: S58)10.413.01.4
20Singapore Exchange (SGX) (SGX: S68)37.98.92.9
21Singapore Airlines (SIA) (SGX: C6L)1.30.6
22ST Engineering (SGX: S63)22.765.43.8
23Sembcorp Industries (SGX: U96)1.21.8
24Singtel (SGX: Z74)4.0111.64.8
25Thai Beverage (SGX: Y92)15.962.93.4
26UOB Bank (SGX: U11)6.9021.13.0
27UOL (SGX: U14)0.1340.72.2
28Venture Corporation (SGX: V03)11.52.33.7
29Wilmar International (SGX: F34)8.1251.42.4
30Yangzijiang Shipbuilding (YZJ) (SGX: BS6)7.7810.83.3

Here, let’s focus on 30 STI Index Component Stocks in Singapore over 6 main groups (Hongkong Land is counted twice under both Jardine Stock & Property Stock), learning the unique positioning:

4 Banking & Finance STI Stocks (35% of STI):
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– DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Singapore Exchange (SGX) (SGX: S68)

3 major banks in Singapore (DBS, OCBC, UOB – all are giant stocks with close relative performance in medium term) are key pillars to STI, contributing to 33% or 1/3 of STI. Therefore, price movement and business changes in Singapore banks or financial sector would affect STI direction significantly. With improvement of pandemic condition, all 3 Singapore major banks reported better quarterly results. As a result, the share prices have recovered from lower optimism level, currently near to their respective intrinsic values.  This implies the cyclic upside potential of DBS, OCBC and UOB are limited (unless there is another global financial crisis to buy low in future), share prices would grow gradually along their intrinsic values with time.

Main current strategy for 3 bank stocks could be momentum trading (Buy High Sell Higher) with support of increasing bank interest rate (improving interest income with higher NIM, Net Interest Margin) over the next few years.  When Asian stock market are over-price (exceeding intrinsic values) with greedy market emotions, STI may achieve a new historical high, bank stock investors may need to plan for exit strategy at higher Ein55 Optimism level.  Meanwhile, Singapore bank stocks are still suitable for long term dividend investing, especially if 60% dividend payout cap (based on FY2019) may be lifted by MAS from Q2/2021, then dividend yield would increase by 50%, achieving normal dividend yield of nearly 5% (comparable with REITs), an excellent alternative to cash deposit in banks or even Singapore Savings Bond which has only 0.5% interest rate yearly, becoming negative return when inflation is over 1%.

Singapore Exchange (SGX) is a moderate growth stock due to a monopoly business model, regardless of bullish or bearish stock market, as long as there is higher demand to buy or sell stocks, earnings would increase.  With challenges from Hong Kong Stock Exchange (HKEX: 388) who wins the MSCI Future business, Singapore Exchange has to explore new derivatives and widen the customer base to more global investors. Intrinsic value of Singapore Exchange is about $13, still undervalue at the moment, having upside potential but patience is required due to moderate growth.

Even if an investor could not buy any Singapore bank stock, may follow Ein55 Optimism strategy to buy STI index at low optimism (<25%) during pandemic, recovery from 2200+ to 3200+ points, the reward could be 30% – 50% in 1 year, depending on the timing of entry when “others are fearful”.

Readers may read earlier article (June 2020 during pandemic with low optimism prices) by Dr Tee for more details on 30 Banking & Finance stocks in Singapore, not limited to STI:
https://www.ein55.com/2020/06/30-singapore-banking-and-finance-stocks/


4 Property STI Stocks (9% of STI):
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– CapitaLand (SGX: C31), City Development (SGX: C09), Hongkong Land (SGX: H78), UOL (SGX: U14)

4 major property stocks in Singapore (CapitaLand, City Development, Hongkong Land and UOL) are undervalue in nature (PB < 1), only contributing to 9% of STI. With recovery of pandemic, lower optimism levels of property stocks start to appreciate in share prices but still below their intrinsic values currently. For example, Hongkong Land has nearly 2X potential from current share price of $5 to its intrinsic value of about $9 but it has a new variable of stagnant Hongkong property market.  Despite Hongkong Land is listed in Singapore, main property business is located in Hong Kong, devaluation of Hong Kong properties results in accounting losses in FY2020 but cashflow is not affected, therefore able to pay consistent dividend as if a REIT (dividend yield of 4-5%).

Among all 4 STI property stocks, City Development has the weakest business fundamental (partly due to setback in China investment with Sincere Property), therefore even if share price has the most discount, this could be a value trap for longer term investor, therefore a lower quality of crisis stock.  UOL and CapitaLand are relatively stronger in businesses.  Despite Singapore property construction business was affected during pandemic, actual property price is growing up gradually.  Therefore, Singapore property stocks are likely to recover strongly after pandemic.

Temasek stock, CapitaLand, will be delisted in near future after recent restructuring, replacing with another potential new giant stock, CLIM (investment asset management company which focus on growth investing). In future, the undervalue CapitaLand may be listed again with higher premium price, a better option than continue the current listing with long term undervalue price under the theme of property stock.

Similar to bank stocks, Singapore property stocks are also cyclical in nature, more suitable with Buy Low Sell High strategy.  STI property stocks also could be a defender with dividend investing, especially for Hongkong Land, almost behaving like a Reit with steady dividend payment (except not required by law). Since Singapore property stocks are undervalue in nature, this is a layer of safety measure for long term investor as the asset value is more than its current share price.  However, if major shareholder decides to delist an undervalue property stock at low optimism level, then minority shareholders may not gain much after sharing the pain of holding in long term. Therefore, when Singapore stock market and property market rise to a higher optimism level, a property stock investor may consider the exit strategy (Sell High and Buy Low next time), no need to hold for long term.

Readers may read earlier article (June 2020 during pandemic with low optimism prices) by Dr Tee for more details on 47 Undervalue Property Stocks in Singapore, not limited to STI:
https://www.ein55.com/2020/06/47-undervalue-sg-property-stocks-for-privatization-including-perennial/


7 REITs STI Stocks (11% of STI):
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– Ascendas Reit – Areit (SGX: A17U), CapitaLand Integrated Commercial Trust – CICT (SGX: C38U), Frasers Logistics & Commercial Trust – FLCT (SGX: BUOU), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust – MCT (SGX: N2IU), Mapletree Industrial Trust – MIT (SGX: ME8U), Mapletree Logistics Trust – MLT (SGX: M44U)

The earlier 2 new comers of STI are MIT and FLCT, both are REITs, The 4 STI reserved list (for future consideration, eg. after replacement of CapitaLand after it is delisted) are all REITs or Trust related stocks, showing the increasing demand for defensive dividend investing: Keppel REIT, Suntec REIT, Frasers Centrepoint Trust and NetLink NBN Trust.

7 STI REITs in Singapore (Areit, CICT, FLCT, Keppel DC Reit  MCT, MIT, MLT) are all giant REITs for dividend investing, the ideal time to invest was during pandemic when “others are fearful” in 2020 with over 30% price correction at low Ein55 Optimism level, resulting in higher dividend yield over 4 to 7%. “Buy Low” is only applicable for giant stocks, otherwise “Buy Low” may become lower for weak fundamental stocks.

Most of these 7 STI REITs have recovered to near or even above their intrinsic values, except CICT is still at moderate low optimism, having over 20% discount below its fair value, growth is slow but steady.  MCT is close to its intrinsic value but slower growth. Both MLT and FLCT are at higher Ein55 Optimism levels, supported by logistics business with higher demand during pandemic.

Singapore REITs in general only have moderate dividend yield after recovery from pandemic so far. A few non-STI REITs with high dividend yield could be a value trap with weaker business, driving lower prices and therefore higher dividend yield).  Dividend yield should not be the main selection criteria of a giant REIT.

These 3 industrial STI REITs (Keppel DC Reit, MIT, Areit) have strong uptrend momentum during the early stage of pandemic (industry sector business was not much affected during circuit breaker time) but suffering in sector rotation when pandemic condition improves in later stage, share prices were corrected more than 20% over the past few months, currently under second round of price recovery, may be considered for medium term trading with trend-following strategies, applying S.E.T. (Stop Loss / Entry / Target Prices) in trading plan.  All these 3 STI REITs have partial business related to high growth data center (100% for Keppel DC Reit, 30% for MIT, 10% for Areit) with higher demand in internet applications during and post pandemic.

In summary, 7 STI REITs are excellent choices for dividend investing but the best time for investing is always when “others are fearful” during Global Financial Crisis with low Ein55 Optimism level. Currently these giant REITs are more suitable for medium term dividend investing or even trading with trend-following strategies. Unlike property market, REITs are hybrid of stocks and properties, therefore they are cyclic in nature, an investor could suffer significant capital loss when buying at high Ein55 Optimism level with downtrend prices, especially near to peak of stock market.

Readers may read earlier article (June 2020 during pandemic with low optimism prices) by Dr Tee for more details on 42 REITs and 16 Business Trusts in Singapore, not limited to STI:
https://www.ein55.com/2020/06/42-singapore-reits-16-business-trusts/


4 Jardine STI Stocks (14% of STI):
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– Jardine Matheson Holdings – JMH (SGX: J36), Jardine Cycle & Carriage – JCC (SGX: C07), Hongkong Land (SGX: H78), Dairy Farm International (SGX: D01)

Jardine group of stocks are influential to STI, even with delisting of JSH, these 4 Jardine giant stocks (JMH, JCC, Hongkong Land and Dairy Farm) still dominate 14% of STI by market cap.  Currently, all these 4 Jardine STI stocks are recovering together from very low Ein55 Optimism level, partly supported by the corporate news of acquisition of JSH by JMH, triggering speculation on potential next undervalue Jardine stock to acquire which may surge in prices.

In fact, acquisition of a giant stock at low optimism (eg. JSH) should be a nightmare for a long term investor, despite a premium price (typically about 20%) is given for the offer to minority shareholders.  For long term investor who bought a stock at higher optimism level, even could hold a stock for long term or lifetime, may not able to stop the major shareholder from leveraging on low optimism opportunity to delist a company at undervalue prices (including CapitaLand, JSH and many other good fundamental stocks), a few may even end up with losses as entry price at high optimism is higher than the acquisition price. 

Therefore, to minimize systematic risks (eg. global financial crisis, sector correction, etc), investing in a portfolio of 10-20 giant stocks at lower Ein55 Optimism with strong holding power could improve the probability of winning in investment. Stock market in short term is a voting machine (up and down daily, sensitive to news) but in a long term, it becomes a weighing machine (steady growth in years with support of growing business).

All the 4 Jardine STI stocks are aligned with recovery of share prices from low Ein55 Optimism levels. They are considered laggard stocks (slower in recovery from pandemic), limited number of giant stocks with higher upside cyclic potential. However, Jardine stocks are cyclical in nature, stock price volatilities may be beyond the risk tolerance level of some traders or even investors.

Readers may read earlier article (Apr 2020 during the worst time of pandemic with very low optimism prices) by Dr Tee for more details on 7 Jardine Group of Giant Stocks, not limited to STI:
https://www.ein55.com/2020/04/7-jardine-king-of-singapore-stocks/


4 Transportation STI Stocks (6% of STI):
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– ComfortDelGro (SGX: C52), Singapore Airlines (SIA) (SGX: C6L), SATS (SGX: S58), Yangzijiang Shipbuilding (YZJ) (SGX: BS6)

There are 4 transportation STI stocks: ComfortDelGro (land transportation), Singapore Airlines (airlines), SATS (partial airlines), Yangzijiang Shipbuilding (shipping). Transportation sector in general is badly affected during pandemic but strongly supported by government grants, therefore these stocks start to recover with slow business improvement in later stage of pandemic.  Stock market is always forward looking, most people believe pandemic would end sooner or later, therefore global vaccination starts to recover the share prices of transportation stock, despite their businesses are still weak.

ComfortDelgro is mainly on taxi business, also has bus / MRT / car inspection businesses through subsidiaries SBS Transit (SGX: S61) and Vicom (SGX: WJP).  The impact of pandemic is much less than the airlines sector, mainly affected during circuit breaker time (Q2/2020) when most people stay at home.  Share price of ComfortDelgro was cut by nearly half during pandemic, then share price starts to recover from low Ein55 Optimism. Intrinsic value of ComfortDelgro is about $2.50, there is cyclic upside potential in share price with diminishing fear, supported by low community cases of COVID-19 in Singapore, allowing land transportation business to go back to normal. Vicom as a more defensive dividend stock (but dividend yield is moderate after rising in share prices after 4-to-1 stock split) with stable and predictable car inspection business (nearly monopoly, sharing the pie with ST Engineering which has STA car inspection centers), supplying critical cashflow to major shareholder, ComfortDelgro (2/3 ownership of Vicom). SBS Transit has become an asset light company after LTA changes of its business model a few years ago (focusing as transport operator with lower expenses and more predictable incomes), gradually become a giant stock but Ein55 Optimism level is relatively high, more suitable for trading, not yet for investing.

YangZiJiang (YZJ) is in shipbuilding industry, relatively stronger than most shipping or marine related stocks with decade long of winter time in this sector. Pandemic in fact helps the shipping industry due to more intercontinental shipping activities. Baltic Dry Index (BDI, a measurement of inflation for shipping industry) has been surging since pandemic, a bullish business signal.  However, YangZiJiang is cyclic in nature, limited growth in long term with moderate dividend yield (3%), more suitable for short term trading, especially when there is rising interest in shipping related stocks.

SIA is a truly crisis stock as airlines passengers drop more than 90%, even parent shareholder, Temasek has to take the lead to help with rights and bonds issues, in additional to Singapore government financial aids.  However, the risk of SIA is not limited to pandemic, the gradual weakening of airlines business was shown even over the last 10 years before pandemic due to competitive airlines industry (eg. price competition for similar flight from City A to City B), similar to another “grandparents blue chip” stock, Singapore Press Holdings – SPH (SGX: T39) with declining business due to less readers (who access free info including news from internet) gradually over the decade.  Despite both SIA and SPH are no longer giant stocks for longer term investing, they may be considered for short term trading (with trend-following strategies) due to speculation of recovery in pandemic, especially after their stock prices were cut by half during pandemic.

SATS is a spinoff company of SIA about 3 decades ago with about 60% airlines gateway business and 40% F&B business.  SATS is indirectly affected by COVID-19 for airlines related business but it can still be compensated by F&B business, therefore a better financial position than most airlines stocks.  In fact, SATS is relatively a better investing choice than SIA, considering both have about 50% price discount during pandemic but SATS has higher growth potential than SIA, therefore may be considered for both longer term investing (current price is only 15% below its intrinsic value) or even shorter term trading.

In fact, even an investor has a lousy stock with weak business fundamental, could not accept the fact of capital loss with “long term investing”, may apply the powerful “Change Horse” strategy, i.e. selling weaker stock, using the remaining capital recovered to buy another stronger stock on the same day. This is a psychological strategy to strengthen the mind of an investor (as if a stock is never sold, just changing its name), despite mistake could be made in the past, there is a second choice, no need to keep on holding to the same weaker stock, changing its future with a giant stock.

Readers may read earlier article (Mar 2020 during the worst time of pandemic with very low optimism prices) by Dr Tee for more details of “Change Horse” strategy (SATS and SIA as examples, assuming an investor only prefers airlines stock):
https://www.ein55.com/2020/03/change-horse-strategy-sia-to-sats/


8 Other Sectors STI Stocks (27% of STI):
==================================
– Genting Singapore (SGX: G13), Keppel Corp (SGX: BN4), ST Engineering (SGX: S63), Sembcorp Industries (SGX: U96), Singtel (SGX: Z74), Thai Beverage (SGX: Y92), Venture Corporation (SGX: V03), Wilmar International (SGX: F34)

The remaining 8 STI stocks come from various industries: Genting Singapore (casino), Keppel Corp (property / oil & gas), ST Engineering (technology), Sembcorp Industries (utility / property), Singtel (telecommunication), Thai Beverage (F&B), Venture Corporation (technology, Wilmar (commodity).  They are aligned with average 3.3% weightage of each STI stock (100% / 30 stocks = 3.3% per stock), total 27% of STI by market cap for 8 stocks.  However, due to less STI stocks in these miscellaneous sectors, therefore changes in each sector do not significantly affect STI index.

For example, early stage of pandemic supports share prices of high-tech stocks globally but STI had little gain due to lack of high-tech stocks, lagging behind comparing with US NASDAQ or even Hong Kong HSI indices.  On the other hand, since global stock market currently value more on cyclic sectors (most of STI component stocks) with pandemic recovery, therefore STI is leading compared to global peers since early Year 2021.  So, it is a blessing in disguise for STI to be lagging, so that late comers still have chance to enter the stock market with higher reward to risk ratio.

Among these 8 other sectors STI stocks, Singtel and Wilmar have the largest market cap. Singtel is a Temasek stock, a defensive dividend stock but telco overseas business overseas (contributing to over 50% revenue) is not as stable as in Singapore, therefore share prices have been corrected lower over the past few years, even before pandemic. Before pandemic, telco industry has been too competitive, over-saturated market with lower profit margins, many global and local telco stocks are affected with declining business (Singtel is still relatively stronger than other telco stocks).  Although 5G technology could create a new wave of future business, most profits may go to smart phone / 5G leaders (eg. Apple, NASDAQ: AAPL) and semi-conductor (eg. TSMC, NYSE: TSM) supplier giant stocks. Singtel has started to recover from low Ein55 Optimism but not supported by growing business, may take more time to achieve intrinsic value of nearly $4.  “Buy Low” in share price without growing business may fall into value trap in longer term (Buy Low Get Lower), therefore careful monitoring of future Singtel business is required for long term investing. Singtel is more suitable for trading currently.

Wilmar is a strong fundamental commodity stock with steady growth in palm oil and sugar businesses, supported by PPB (KLSE: 4065) of Kuok Group as major shareholder (head of Kuok family is Robert Kuok, the richest person in Malaysia while nephew, Kuok Khoon Hong, is Wilmar Chairman), aligning with recovery of commodity market including palm oil and sugar prices from lower Ein55 Optimism (supported further by weakening of US dollar with QE during pandemic). Wilmar share price follows its intrinsic value closely, therefore little opportunity to Buy Low unless there is a global financial crisis in future. Wilmar subsidiary with cooking oil business, YKA, is a new IPO stock in China stock market (larger market cap than Wilmar now due to higher demand in China stock market), would help to support the parent stock in longer term. In general, Wilmar can be a steady defender stock but may not be suitable for those who aim for quick gains.

Remaining 6 other STI stocks, each has its own pros and cons. Genting Singapore is a crisis stock, share price is recovering well from low Ein55 Optimism but business is limited by lack of international tourists to Singapore (potential customers for gambling business which is the main profit generator).  Thai Beverage is a higher quality crisis stock, share price is recovering from very low optimism but beer business is not much affected by pandemic, short term price is affected due to recent news to delay IPO plan for its subsidiary, BeerCo. Thai Beverage’s intrinsic value is about $1, current price is about 30% below this fair value.

ST Engineering is a defensive technology stock, share price is recovering from low optimism in pandemic, near to its intrinsic value, more suitable for medium term dividend investing.  Venture is a cyclic technology stock, more suitable for Buy Low Sell High (currently at high Ein55 Optimism level), more suitable for trading, may not for long term investing. There is a potential of Version 2.0 Dotcom bubble (Version 1.0 was in Year 2000) due to over-price global technology giant stocks, therefore investing in high tech stocks require trend-following trading strategies due to very high optimism in many technology stocks which could be fine for a period of time with support of growing economy after pandemic is over.

Keppel Corp is not supported by Temasek partial acquisition last year but share prices recover gradually with improvement in oil prices during pandemic (after the worst time of negative oil price in May 2020), but business is still declining, mainly supported by property market (eg. Keppel Land and Keppel Reit). Despite Keppel Corp plans to exit from Oil & Gas sector eventually in future, it could still benefit from the recovery of oil market as Keppel Offshore & Marine division may be merged with Sembcorp Marine (SGX: S51), another Temasek crisis stock, which is demerged recently from Sembcorp Industries.  After demerging, Sembcorp Industries becomes a giant stock overnight (before demerging, 1/3 business was affected by subsidiary, Sembcorp Marine with losing business in oil & gas), share prices have recovered from low Ein55 Optimism in pandemic, near to its intrinsic value currently, supported mainly by growing land development business and defensive utility business.

Out of 30 STI Index stocks, there are 50% or 15 Temasek related stocks: DBS, Singtel, Sembcorp Industry, Keppel Corp, Keppel DC Reit, CapitaLand, CICT, SIA, SATS, ST Engineering, Singapore Exchange, Areit, MIT, MCT and MLT. Temasek as a major or significant shareholder, provides stability to business and even share prices to these Temasek stocks, especially during stock or business crisis (including non-STI stock such as Olam (SGX: O32) when it was attacked by Muddy Waters during shorting many years ago.

Readers may read earlier article (Aug 2020 during pandemic with low optimism prices) by Dr Tee for more details on 26 Temasek stocks, not limited to STI:
https://www.ein55.com/2020/08/temasek-giant-stocks-corporate-actions/

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Between knowledge (eg. reading this educational article of 30 STI stocks) and fortune (eg. making profits in stocks), there is a bridge to cross called Action (Buy, Hold, Sell, Wait or Shorting).  Before making any decision, reader may need to understand own personality, eg. short term trading or long term investing, risk tolerance level and reward expectation, etc, then aligned with the right strategies. Similar to each profession, stock trading and investment skills can be learned, even in a free way (you are doing the right way now) if one could put in effort consistently to learn and apply.

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There are over 1500 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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6 Wee Cho Yaw Singapore Giant Stocks (光宗耀祖)

Mr Wee Cho Yaw (黄祖耀) is the Top 10 richest person in Singapore for decades.  An easy way of being rich is to be a long term business partner of these proven rich people through stock investing, ideally entering during COVID-19 stock crisis with discounted prices.

In this article, you will learn from Dr Tee on 6 Wee Chow Yaw Family Giant Stocks in Singapore for longer term investing with COVID-19 recovery stock rally. Bonus for readers who could read every words of the entire article, learning unique strategy to position in each Wee family stocks. This investing strategy may be extended to any Top 10 richest person in any country.

1) UOB Bank (SGX: U11)

2) UOB Kay Hian (SGX: U10)

3) UOI (United Overseas Insurance) (SGX: U13)

4) UOL Group (SGX: U14)

5) UIC (United Industrial Corporation) (SGX: U06)

6) Haw Par Corporation (SGX: H02)

Wee Cho Yaw is the second generation of Wee Family, succeeding the bank business from his father (Wee Kheng Chiang), expanding the UOB Bank with multiple acquisitions of other banks (defeating DBS to acquire OUB Bank), becoming the third largest bank in Singapore.  Wee Cho Yaw has retired (91 years old but still engaging actively in businesses), distributing the family businesses to the third generation, 3 sons: Wee Ee Chong, Wee Ee Lim, Wee Ee Chao.

Unlike Chinese saying of “wealth does not last over 3 generations” (富不过三代) or English saying of “clogs to clogs is only three generations”, Wee Family has been training family members to be management since young, not simply inheriting the wealth.  As long as management is performing (regardless operated by family or external talent), giant stocks supported by strong businesses will continue to grow.

There are 30 STI index component stocks including Wee Cho Yaw Family giant stocks of UOB and UOL. Wee Cho Yaw has established an empire of businesses with 6 giant stocks over 3 key sectors in Singapore: Banking & Finance (UOB, UOB Kay Hian and UOI), Property (UOL and UIC) and Healthcare (Haw Par). Each of the 6 stocks is connected by a network of cross-shareholding structure (read past article by Dr Tee for details) with near simple majority (eg. A owns B & C, while B owns A & D, etc).

This is an efficient way to expand the businesses with limited capital in the early time but having potential risk of weaker control in overall shares ownership when there is a strong competitor.  In more recent years, instead of more acquisition of new businesses, Wee Cho Yaw family has been focusing on strengthening the control of these core businesses with more shareholding (eg. buying more shares of UOL, Haw Par, etc), establishing a more stable business structure for the third and future generations.

Let’s learn from Dr Tee on how to position in these 6 Wee Cho Yaw stocks over 3 promising sectors in Singapore, especially during COVID-19 stock crisis recovery rally:

1) Singapore Banking & Finance Giant Stocks

1.1) UOB Bank (SGX: U11)

Business performance of UOB Bank is aligned with other 2 major banks in Singapore, DBS Bank and OCBC Bank. In general, global and Singapore banks are at its low tide of business with higher NPL (Non-Performing Loan) during pandemic and lower interest income due to low bank interest rates globally.

UOB Bank stock is recovering steadily from low optimism during pandemic, currently about 41% optimism, still having discount in share prices. UOB is a moderate growth stock, suitable with Buy Low & Hold long term strategy.  In normal time (without MAS cap of 60% dividend payment), UOB stock investor could receive 5-6% stable dividend yield (depending on entry price), suitable for long term investing with Mr Wee Chow Yaw family (strong sponsor) core business.

Therefore, it may be smarter to be an UOB bank stock investor (sharing 5-6% dividend yield and potential capital gains) than being a client of UOB with cash deposit for long term (contributing cheap loan with less than 0.5% interest for UOB to invest or expand business).

1.2) UOB Kay Hian (SGX: U10)

Business performance of UOB Kay Hian is relatively weaker than other Wee family stocks in longer term, mainly due to stagnant and smaller Singapore stock market, resulting in less profits for stock brokerage business. However, during COVID-19 stock crisis, stock trading volume has increased for local and global stocks, therefore UOB Kay Hian is gaining momentum in both business and share price.

UOB Kay Hian stock is recovering from low optimism during pandemic, currently about 35% optimism, having higher potential in medium term share prices with more active traders who buy or sell local and global stocks. UOB Kay Hian is a cyclic stock, suitable with Buy Low & Sell High in medium term strategy, growing together in bullish stock market with pandemic recovery rally.

1.3) UOI (United Overseas Insurance) (SGX: U13)

Business performance of UOI (United Overseas Insurance) is relatively more stable in longer term (not much affected during COVID-19), mainly due to defensive nature of insurance industry (leveraging on probability of nature to make profits with calculated risks, diversifying over a large number of populations or policies).

UOI stock is corrected relatively less than other Wee family stocks during pandemic, currently near fair price of about 58% optimism, having lower potential in long term due to less discount in share prices. UOI may be considered for medium term cyclic trading with Buy Low Sell High strategy but it may not be as exciting as other Wee family stocks for short term traders.

There are 30 Banking & Finance Stocks in Singapore including UOB Bank, UOI and UOB Kay Hian (investor has to focus only on giant stocks for investing):

AMTD IB OV (SGX: HKB), B&M Hldg (SGX: CJN), DBS Bank (SGX: D05), Edition (SGX: 5HG), G K Goh (SGX: G41), Global Investment (SGX: B73), Great Eastern (SGX: G07), Hong Leong Finance (SGX: S41), Hotung Investment (SGX: BLS), IFAST Corporation (SGX: AIY), IFS Capital (SGX: I49), Intraco (SGX: I06), Maxi-Cash Finance (SGX: 5UF), MoneyMax Finance (SGX: 5WJ), Net Pacific Finance (SGX: 5QY), OCBC Bank (SGX: O39), Pacific Century (SGX: P15), Prudential USD (SGX: K6S), Singapore Exchange (SGX: S68), SHS (SGX: 566), Sing Investments & Finance (SGX: S35), Singapore Reinsurance (SGX: S49), Singapura Finance (SGX: S23), TIH (SGX: T55), Uni-Asia Group (SGX: CHJ), UOB Bank (SGX: U11), UOB-KAY HIAN HOLDINGS (SGX: U10), UOI (SGX: U13), ValueMax (SGX: T6I), Vibrant Group (SGX: BIP).

2) Singapore Property Giant Stocks

2.1) UOL Group (SGX: U14)

2.2) UIC (United Industrial Corporation) (SGX: U06)

Business performances of UOL and UIC (United Industrial Corporation) are aligned with other major Singapore property stocks (eg. CapitaLand, City Development, Hongkong Land, etc). In general, global and Singapore property prices are relatively stable during pandemic, partly due to low mortgage rate and slower response in property market (comparing to panic sell within weeks by global stock investors during early phase of pandemic in Mar 2020).  However, due to circuit breaker in Singapore and global lock down globally in Q2/2020, property businesses are still affected.

With recovery of local and global economy, both UOL and UIC are expected to gain more momentum in property market. Both stocks of UOL and UIC are recovering steadily from low optimism during pandemic, currently about 35% optimism (UOL) and 7% Optimism (UIC) respectively. UIC has more discount in share prices than UOL (over 50% discount with price-to-book ratio = 0.46 for UIC).

UOL is a growth stock, more suitable with Buy Low & Hold long term strategy.  UIC is a cyclic stock, more suitable with Buy Low & Sell High in medium term strategy. Both UOL and UIC could pay moderate dividend yield of nearly 2% (more than bank interest of 0.5%), suitable for positioning as midfielders for both capital gains in share prices appreciation and moderate passive income with stable dividend.

There are 140 Property Stocks in Singapore including UOL and UIC (investor has to focus only on giant stocks for investing):

3Cnergy (SGX: 502), A-Smart (SGX: BQC), AEI^ (SGX: AWG), AIMS Property (SGX: BVP), APAC Realty (SGX: CLN), Abterra (SGX: L5I), Acromec (SGX: 43F), Amara (SGX: A34), Amcorp Global (SGX: S9B), AnnAik (SGX: A52), Astaka (SGX: 42S), BBR (SGX: KJ5), BRC Asia (SGX: BEC), BlackGoldNatural (SGX: 41H), Boldtek (SGX: 5VI), Bonvests (SGX: B28), Boustead (SGX: F9D), Boustead Projects (SGX: AVM), Bukit Sembawang (SGX: B61), Bund Center (SGX: BTE), CSC (SGX: C06), CapitaLand (SGX: C31), Casa (SGX: C04), Chemical Industries (SGX: C05), China Great Land (SGX: D50), China International (SGX: BEH), China Real Estate (SGX: 5RA), China Yuanbang (SGX: BCD), Chip Eng Seng (SGX: C29), City Development (SGX: C09), DISA (SGX: 532), Debao Property (SGX: BTF), ETC Singapore (SGX: 1C0), Edition (SGX: 5HG), EnGro Corporation (SGX: S44), Fraser and Neave F&N (SGX: F99), Far East Orchard (SGX: O10), Figtree (SGX: 5F4), First Sponsor (SGX: ADN), Fragrance (SGX: F31), Frasers Property (SGX: TQ5), GYP Properties (SGX: AWS), Gallant Venture (SGX: 5IG), Golden Energy (SGX: AUE), Goodland (SGX: 5PC), GuocoLand (SGX: F17), HL Global Enterprises (SGX: AVX), Hatten Land (SGX: PH0), Heeton (SGX: 5DP), Hiap Hoe (SGX: 5JK), Hiap Seng (SGX: 510), Ho Bee Land (SGX: H13), Hock Lian Seng (SGX: J2T), Hong Fok (SGX: H30), Hong Lai Huat (SGX: CTO), Hong Leong Asia (SGX: H22), Hongkong Land USD (SGX: H78), Hor Kew (SGX: BBP), Huationg Global (SGX: 41B), Hwa Hong (SGX: H19), IPC Corp (SGX: AZA), ISOTeam (SGX: 5WF), Imperium Crown (SGX: 5HT), Jasper Investments (SGX: FQ7), KOP (SGX: 5I1), KSH (SGX: ER0), Keong Hong (SGX: 5TT), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), King Wan (SGX: 554), Koh Brothers (SGX: K75), Koon (SGX: 5DL), Kori (SGX: 5VC), LHN (SGX: 41O), Ley Choon (SGX: Q0X), Lian Beng (SGX: L03), Low Keng Huat (SGX: F1E), Lum Chang (SGX: L19), MMP Resources (SGX: F3V), MYP (SGX: F86), Metro (SGX: M01), OIO (SGX: KUX), OKH Global (SGX: S3N), OKP (SGX: 5CF), OneApex (SGX: 5SY), Oxley (SGX: 5UX), PSL (SGX: BLL), Pacific Century (SGX: P15), Pacific Star Development (SGX: 1C5), Pan Hong (SGX: P36), Pavillon (SGX: 596), Perennial Holdings (SGX: 40S), Pollux Properties (SGX: 5AE), PropNex (SGX: OYY), Raffles Infrastructure (SGX: LUY), Regal International (SGX: UV1), Renaissance United (SGX: I11), Rich Capital (SGX: 5G4), Roxy-Pacific (SGX: E8Z), Ryobi Kiso (SGX: BDN), SHS (SGX: 566), SLB Development (SGX: 1J0), SP Corporation (SGX: AWE), Sasseur Reit (SGX: CRPU), Second Chance (SGX: 528), Sin Heng Mach (SGX: BKA), Sinarmas Land (SGX: A26), SingHaiyi (SGX: 5H0), SingHoldings (SGX: 5IC), Singapore-eDev (SGX: 40V), Sinjia Land (SGX: 5HH), Soilbuild Construction Group (SGX: S7P), Starland (SGX: 5UA), Straits Trading (SGX: S20), Swee Hong (SGX: QF6), Sysma (SGX: 5UO), TA (SGX: PA3), TTJ (SGX: K1Q), Tai Sin Electric (SGX: 500), Thakral (SGX: AWI), Thomson Medical Group (SGX: A50), Tiong Seng (SGX: BFI), Top Global (SGX: BHO), Tosei (SGX: S2D), Transcorp (SGX: T19), Tritech (SGX: 5G9), UIC (SGX: U06), UOA (SGX: EH5), UOL (SGX: U14), USP Group (SGX: BRS), Vibrant Group (SGX: BIP), Wee Hur (SGX: E3B), Wing Tai (SGX: W05), Yanlord Land (SGX: Z25), Yeo Hiap Seng (SGX: Y03), Ying Li International (SGX: 5DM), Yoma Strategic (SGX: Z59), Yongmao (SGX: BKX), Yongnam (SGX: AXB), Yorkshine (SGX: MR8).

3) Singapore Healthcare Giant Stock

– Haw Par Corporation (SGX: H02)

Business performance of Haw Par is relatively stronger in long term than other Wee family stocks, partly due to defensive growing healthcare sector.  In fact, over 70% revenue of Haw Par is from investing in other 2 Wee family stocks of UOB Bank (3% share) and UOL (8% share) due to the unique cross-holding structure of 6 Wee Cho Yaw stocks.  The hidden valuable assets of Haw Par (through ownership of UOB and UOL) could already justify for the current Haw Par share prices, therefore the healthcare business (eg. tiger balm medical products) is an added bonus for Haw Par stock investors who indirectly also own UOB and UOL stocks.

Haw Par is a strong growth stock, price corrected relatively less than other Wee family stocks during pandemic, currently share price recovers to 43% optimism, near to fair value with some discounts. Potential of Haw Par share price is mainly on its steady business growth, suitable with Buy Low & Hold long term strategy with protection by parent stocks of UOB and UOL.

There are 37 Healthcare Stocks in Singapore including Haw Par (investor has to focus only on giant stocks for investing):

Accrelist Ltd (SGX: QZG), Alliance Healthcare (SGX: MIJ), Aoxin Q & M Dental (SGX: 1D4), Asia Vets Holdings (SGX: 5RE), AsiaMedic (SGX: 505), Asian Healthcare Specialists (SGX: 1J3), Beverly JCG (SGX: VFP), Biolidics (SGX: 8YY), Cordlife (SGX: P8A), First Reit (SGX: AW9U), Haw Par Corporation (SGX: H02), HC Surgical Specialists (SGX: 1B1), Healthway Medical Corporation (SGX: 5NG), Hyphens Pharma International (SGX: 1J5), IHH Healthcare (SGX: Q0F), ISEC Healthcare (SGX: 40T), IX Biopharma (SGX: 42C), Lonza Group (SGX: O6Z), Medinex (SGX: OTX), Medtecs International Corporation (SGX: 546), OUE Lippo Healthcare (SGX: 5WA), ParkwayLife Reit (SGX: C2PU), Pharmesis International (SGX: BFK), Q&M Dental Group (SGX: QC7), QT Vascular (SGX: 5I0), Raffles Medical Group (SGX: BSL), RHT Health Trust (SGX: RF1U), Riverstone Holdings (SGX: AP4), SingMedical Group (SGX: 5OT), Suntar Eco-City (SGX: BKZ), TalkMed (SGX: 5G3), Thomson Medical Group (SGX: A50), Tianjin Zhong Xin Pharmaceutical Group (SGX: T14), Top Glove Corporation (SGX: BVA), Trendlines Group (SGX: 42T), UG Healthcare Corporation (SGX: 41A), Vicplas International (SGX: 569).

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There are over 1500 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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47 Undervalue SG Property Stocks for Privatization including Perennial (弱肉强食)

Singapore Undervalue Property Stocks Perennial Privatization

Perennial Real Estate Holdings (SGX: 40S) becomes the next target for privatization. However, not all the acquisition news is good for retail investors. In this article, Dr Tee will share the considerations by Big Boys or major shareholders to acquire or privatize a stock with Perennial as an example, with sharing of Reverse Takeover (RTO) stocks. You will learn the 47 undervalue Singapore property stocks which are profitable with over 50% price discount in asset value.

Interestingly, Perennial started its property business in year 2014 through Reverse Takeover (RTO) of St. James Holdings (entertainment business) which IPO in 2008. RTO is a quick way of “IPO” by acquiring an existing company which could be different business nature. A more famous example would be RTO of Berkshire Hathaway (NYSE: BRK) by Warren Buffett in year 1965, transforming an original textile manufacturing company into an insurance company.

There are quite a few property related stocks also get listed indirectly through RTO, eg. Hatten (SGX: PH0) and Centurion (SGX: OU8) / (HKEx: 6090). Therefore, a stock investor has to be careful in analysis of stock prices and business fundamental, viewing the RTO company as new IPO company, especially if the business is totally different with new management. So, the past performance (share prices and businesses) would not be meaningful references after RTO.

Perennial original IPO (under St. James) price was $12.95/share which shareholder would “lose” 95% if compare with price of $0.69/share before the privatization offer of $0.95/share. However, Years 2008-2014 was reflection of St James share prices and businesses. Perennial actual stock record should be from Years 2014-2020, share prices vary from about $1 to about $0.30 during the recent Covid-19 crisis.  Perennial is not a giant stock but it is also not a junk stock. The bearish stock prices over the past 6 years are aligned with other Singapore property stocks (quite many are corrected by over 50% in share prices).

However, Perennial is relatively weaker than other Singapore property stocks. Therefore, the recent offer $0.95/share (despite lower than RTO price when Perennial first started in 2014) is considered attractive to investors after RTO. It is getting harder to delist or privatize a company in Singapore, therefore the offer must be significantly higher (38% for this case) to extend the current 82% shareholding to over 90% for mandatory takeover.

Perennial major shareholders include Wilmar (SGX: F34), together with other “big boys”, although 38% premium in offer price seems attractive but this amount (about $277M) will be paid by the new investor, Hopu Fund of China. Perennial has many good quality properties in both Singapore and China, last 1 year has significant cash from investing (sales of property), currently having $120M cash in the company which will be unlocked after privatization. More importantly, the company is undervalue, Price-to-Book (PB) ratio is 0.44 with 56% discount.  This implies that the offer to 18% minority shareholders is technically “free” to major shareholders as Net Asset Value (NAV) is $1.58/share. Assuming PB of only 0.75 (25% discount) as market price (if were to sell the properties today), then the value gained from privatization would be $390M, more than enough to cover $277M cash. 

Nevertheless, it is unlikely for Perennial to sell properties cheaply after privatization. With both high-quality commercial buildings and promising healthcare services, there is always an option for the company to get listed again (could be in other stock exchange) in future with higher valuation after another IPO or even RTO.

A few years ago, Wheelock Properties (SGX: M35) with over 50% discount in PB was acquired by parent company in Hong Kong, Wheelock Co (HKEx: 20), cash unlocked after acquisition was more than cash offered.  Therefore, some cash rich companies have also tried to delist the company but not all the Big Boys are lucky. Previously, Challenger Technologies (SGX: 573) could not pass this barrier due to objection by minority shareholders as the company is fundamentally strong with cash rich. Breadtalk (SGX: CTN) acquisition offer was attractive partly due to severe stock crisis during Covid-10.

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There are 140 property & construction stocks in Singapore (REITs are excluded, see earlier articles by Dr Tee if interested: www.ein55.com/blog), many are undervalue but also losing money, “Buy Low” may simply get lower in share price.

3Cnergy (SGX: 502), A-Smart (SGX: BQC), AEI^ (SGX: AWG), AIMS Property (SGX: BVP), APAC Realty (SGX: CLN), Abterra (SGX: L5I), Acromec (SGX: 43F), Amara (SGX: A34), Amcorp Global (SGX: S9B), AnnAik (SGX: A52), Astaka (SGX: 42S), BBR (SGX: KJ5), BRC Asia (SGX: BEC), BlackGoldNatural (SGX: 41H), Boldtek (SGX: 5VI), Bonvests (SGX: B28), Boustead (SGX: F9D), Boustead Projects (SGX: AVM), Bukit Sembawang (SGX: B61), Bund Center (SGX: BTE), CSC (SGX: C06), CapitaLand (SGX: C31), Casa (SGX: C04), Chemical Industries (SGX: C05), China Great Land (SGX: D50), China International (SGX: BEH), China Real Estate (SGX: 5RA), China Yuanbang (SGX: BCD), Chip Eng Seng (SGX: C29), City Development (SGX: C09), DISA (SGX: 532), Debao Property (SGX: BTF), ETC Singapore (SGX: 1C0), Edition (SGX: 5HG), EnGro Corporation (SGX: S44), Fraser and Neave F&N (SGX: F99), Far East Orchard (SGX: O10), Figtree (SGX: 5F4), First Sponsor (SGX: ADN), Fragrance (SGX: F31), Frasers Property (SGX: TQ5), GYP Properties (SGX: AWS), Gallant Venture (SGX: 5IG), Golden Energy (SGX: AUE), Goodland (SGX: 5PC), GuocoLand (SGX: F17), HL Global Enterprises (SGX: AVX), Hatten Land (SGX: PH0), Heeton (SGX: 5DP), Hiap Hoe (SGX: 5JK), Hiap Seng (SGX: 510), Ho Bee Land (SGX: H13), Hock Lian Seng (SGX: J2T), Hong Fok (SGX: H30), Hong Lai Huat (SGX: CTO), Hong Leong Asia (SGX: H22), Hongkong Land USD (SGX: H78), Hor Kew (SGX: BBP), Huationg Global (SGX: 41B), Hwa Hong (SGX: H19), IPC Corp (SGX: AZA), ISOTeam (SGX: 5WF), Imperium Crown (SGX: 5HT), Jasper Investments (SGX: FQ7), KOP (SGX: 5I1), KSH (SGX: ER0), Keong Hong (SGX: 5TT), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), King Wan (SGX: 554), Koh Brothers (SGX: K75), Koon (SGX: 5DL), Kori (SGX: 5VC), LHN (SGX: 41O), Ley Choon (SGX: Q0X), Lian Beng (SGX: L03), Low Keng Huat (SGX: F1E), Lum Chang (SGX: L19), MMP Resources (SGX: F3V), MYP (SGX: F86), Metro (SGX: M01), OIO (SGX: KUX), OKH Global (SGX: S3N), OKP (SGX: 5CF), OneApex (SGX: 5SY), Oxley (SGX: 5UX), PSL (SGX: BLL), Pacific Century (SGX: P15), Pacific Star Development (SGX: 1C5), Pan Hong (SGX: P36), Pavillon (SGX: 596), Perennial Holdings (SGX: 40S), Pollux Properties (SGX: 5AE), PropNex (SGX: OYY), Raffles Infrastructure (SGX: LUY), Regal International (SGX: UV1), Renaissance United (SGX: I11), Rich Capital (SGX: 5G4), Roxy-Pacific (SGX: E8Z), Ryobi Kiso (SGX: BDN), SHS (SGX: 566), SLB Development (SGX: 1J0), SP Corporation (SGX: AWE), Sasseur Reit (SGX: CRPU), Second Chance (SGX: 528), Sin Heng Mach (SGX: BKA), Sinarmas Land (SGX: A26), SingHaiyi (SGX: 5H0), SingHoldings (SGX: 5IC), Singapore-eDev (SGX: 40V), Sinjia Land (SGX: 5HH), Soilbuild Construction Group (SGX: S7P), Starland (SGX: 5UA), Straits Trading (SGX: S20), Swee Hong (SGX: QF6), Sysma (SGX: 5UO), TA (SGX: PA3), TTJ (SGX: K1Q), Tai Sin Electric (SGX: 500), Thakral (SGX: AWI), Thomson Medical Group (SGX: A50), Tiong Seng (SGX: BFI), Top Global (SGX: BHO), Tosei (SGX: S2D), Transcorp (SGX: T19), Tritech (SGX: 5G9), UIC (SGX: U06), UOA (SGX: EH5), UOL (SGX: U14), USP Group (SGX: BRS), Vibrant Group (SGX: BIP), Wee Hur (SGX: E3B), Wing Tai (SGX: W05), Yanlord Land (SGX: Z25), Yeo Hiap Seng (SGX: Y03), Ying Li International (SGX: 5DM), Yoma Strategic (SGX: Z59), Yongmao (SGX: BKX), Yongnam (SGX: AXB), Yorkshine (SGX: MR8).

There are only 47 undervalue (PB < 0.5) Singapore property stocks are profitable in the last 1 year, including Perennial.

From table below, we could see property stocks with PB = $/NAV from 0.13 to 0.5. Despite over 50% discount in share prices over NAV with profitable business, majority of stocks are not giant stocks. An undervalue stock may remain undervalue for a long term, sometimes may be even acquired by Big Boys at low optimism price in a bearish stock market (弱肉强食).

NoNameTickerPB = Price/NAVROE (%)
1Huationg Global41B0.135.3
2Hor KewBBP0.161.0
3Top GlobalBHO0.180.2
4CasaC040.184.5
5ETC Singapore1C00.225.8
6Hong Lai HuatCTO0.231.4
7Hong FokH300.245.6
8Koh BrosK750.241.9
9SP CorpAWE0.244.5
10Pavillon5960.241.1
11HongkongLandH780.250.5
12Heeton5DP0.253.0
13HL Global EntAVX0.271.1
14Tiong SengBFI0.284.0
15Lian BengL030.284.7
16China IntlBEH0.305.6
17Sinarmas LandA260.3015.1
18AnnAikA520.313.3
19TTJK1Q0.342.3
20Vibrant GroupBIP0.343.8
21Keong Hong5TT0.367.3
22Far East OrchardO100.372.1
23Chemical IndC050.388.8
24Pan HongP360.3815.4
25Ho Bee LandH130.399.4
26Hiap Hoe5JK0.392.9
27King Wan5540.401.6
28LHN41O0.408.3
29ThakralAWI0.416.7
30MetroM010.415.6
31Yanlord LandZ250.4111.9
32Wing TaiW050.421.3
33EnGroS440.424.7
34BonvestsB280.430.4
35Kori5VC0.430.2
36GuocoLandF170.436.1
37Perennial Hldgs40S0.440.1
38Low Keng HuatF1E0.441.9
39Straits TradingS200.445.6
40UICU060.448.3
41Pollux Prop5AE0.442.5
42SingHaiyi5H00.440.1
43Wee HurE3B0.448.8
44SingHoldings5IC0.4515.4
45Lum ChangL190.459.1
46Chip Eng SengC290.483.6
47Hong Leong AsiaH220.504.5

Based on Dr Tee criteria, from the 47 shortlisted Singapore property stocks above, only 8 are giant stocks. A few undervalue property giant stocks were mentioned in earlier articles (see https://www.ein55.com/tag/property-stocks/), eg. GuocoLand (SGX: F17) and Hongkong Land (SGX: H78). However, not all major shareholders are interested of delisting the undervalue property stocks because some are family owned for decades, value of shares may recover to NAV only when they are ready to sell one day.  It may be hard for Big Boys or external funds to acquire. For example, Li Ka-shing was hoping to acquire Hongkong Land in 1980s but was rejected with tighter control by parent stock from Jardine Group, Jardine Matheson Holdings JMH (SGX: J36) and Jardine Strategic Holdings JSH (SGX: J37).

Property stocks (both Singapore and regional stock markets in Malaysia and Hong Kong, etc) are cyclic in nature. Therefore, market cycle investing strategy is required with alignment to Optimism Strategies to Buy Low Sell High, as well as good understanding the local property market cycle.  Property stocks is an integration of stock and property markets, knowledge in both markets are required to enhance the chances of success in investing.

Undervalue stocks are bonus for additional safety (huge discount in price below value with high quality asset of property), especially for property stocks but mainly suitable for patient long term investors.  A smart investor may integrate undervalue stocks with dividend strategies. This is suitable for passive income investing, similar to property investment, an alternative to REITs but an investor of property stock (non-REIT) could also enjoy the capital gains (or suffer the losses) of property valuations, not just the rental income. For example, many property stocks (including Hongkong Land) are lower in valuation (affecting earnings) in Hong Kong but cash flow is not much affected.

So, reading between the lines for 3 financial reports (Income Statement, Balance Sheet, Cash Flow statement) are important to fully understand the property stocks, especially property development company has different project cycles which may last a few years, resulting in cyclic property business results and stock prices. So, Level Analysis of Level 1 (individual stock), Level 2 (Property Sector), Level 3 (local country) and Level 4 (world economy and global stock market) are required.

There are hundreds of global property giant stocks (may not need to be undervalue), an investor just needs to select 1 of Top 10 property stocks, adding to a dream team stock portfolio of 10-20 giant stocks (eg. best stock in each sector, min 3 sectors: REIT, Healthcare, F&B, Oil & Gas, Bank, Commodity, Insurance, etc). Value investors may own these 10-20 companies at undervalue price to work for us through shareholding, generating incomes (capital gains of higher share prices and dividend payment) over a lifetime (even beyond own retirement) with yearly review of giant stock status to continue the holding. So, every stock crisis is an opportunity to Buy Low with condition that it must be a giant stock.

There are 30 STI index component stocks including property stocks: CapitaLand, Hongkong Land, City Development and UOL (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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15 Hong Leong Group and Kwek Family Stocks (新马郭家)

Hong Leong Group Stocks

Hong Leong Group is established by Kwek/Quek family in Singapore and Malaysia. They are influential in both banking/finance and property/hospitality sectors. Learn from Dr Tee on how to position in these 15 Kwek family stocks, 5 from Hong Leong Singapore (Kwek Leng Beng) and 8 from Hong Leong Malaysia (Quek Leng Chan). There are 2 surprise bonus giant stocks waiting in between the article to reward patient reader, from another unrelated “Kwek” family. There are also a few other bonus examples, read every word in this article which could reward reader in future when taking the right action.

Kwek Leng Beng (Hong Leong Singapore):

1) City Developments Limited, CDL (SGX: C09) – Singapore Giant Property Stock

2) CDL Hospitality Trusts, CDLHT (SGX: J85) – Singapore Hospitality REIT

3) Hong Leong Finance, HLF (SGX: S41) – Singapore Finance Stock

4) Hong Leong Asia, HLA (SGX: H22) – Singapore Industrial Stock

5) Millennium & Copthorne, MLC (LSE: MLC) – UK Hospitality Stock

Quek Leng Chan (Hong Leong Malaysia):

6) Hong Leong Bank, HLBANK (Bursa: 5819) – Malaysia Giant Bank Stock

7) Hong Leong Finance Group, HLFG (Bursa: 1082) – Malaysia Giant Finance Stock

8) Hong Leong Industries, HLIND (Bursa: 3301) – Malaysia Giant Industrial Stock

9) GuocoLand Malaysia, GUOCO (Bursa: 1503) – Malaysia Property Stock

10) GuocoLand Limited (SGX: F17) – Singapore Property Stock

11) GL Limited (SGX: B16) – Singapore Hospitality Stock

12) Hong Leong Capital, HLCAP (Bursa: 5274) – Malaysia Investment Stock

13) Hume Industries, HUMEIND (Bursa: 5000) – Malaysia Cement Stock

Bonus Stocks from Another “Kwek” Family (hidden in between article)

14) Bonus Stock No 1 – Malaysia Giant F&B Growth Dividend Stock

15) Bonus Stock No 2 – Malaysia Giant Plantation Growth Dividend Stock

Kwek Leng Beng and Quek Leng Chan are actually cousin (堂兄弟) under Kwek family, their fathers are siblings, originally from Fujian of China. Why they don’t share the same family name in English, Kwek vs Quek? Well, it is quite common in older generation (both of the Hong Leong Groups Chairmen are nearly 80 years old, born around World War II time) in Singapore and Malaysia, even the surname is the same in Chinese (郭) but the possible miscommunication between the persons who reported (verbally say) and registered (listen with sounds like, then write in own way…) may result in difference in English name on birth certificate, even within the same family. 

In Year 1965, Singapore and Malaysia split into 2 countries and Hong Leong Group was also divided into 2 groups. Quek Leng Chan decided to start a new business world in Malaysia with family fund while other Kwek family members (including Kwek Leng Beng) chose to stay in Singapore. Due to this historical national event, now we have 2 different Hong Leong groups in 2 countries with independent businesses.  Of course, in modern world now, there is no limit in border, business could reach any country globally.  Here, Dr Tee will comment on each of the Kwek/Quek family stocks.

Kwek Leng Beng (Hong Leong Singapore)

For Kwek Leng Beng (Hong Leong Singapore), the most famous stock is City Developments Limited, CDL, a giant property stock in Singapore, also 1 of 30 STI component stocks. CDL is the second largest property developer in Singapore, performance is close to another property giant stock (largest property developer in Singapore and Asia), CapitaLand (SGX: C31). Both CDL and CapitaLand are typical blue chip stocks, slower growth but stable (property), more suitable for positioning as a midfielder stock, aiming for moderate capital gains and dividend incomes over time. For investors who aim for higher growth, then both slower giant stocks may not be ideal. An ideal giant stock may not need to be large in size but has to strong in business with growth, more importantly, aligning with unique personality of individual investor.

CDL Hospitality Trusts, CDLHT, is a REIT with reasonable business fundamental (before Coronavirus crisis) but more for dividend investing, although recent Coronavirus crisis has helped to push up dividend yield to about 10% after huge correction in share price, the regular dividend payout may not be sustainable in Year 2020 due to deep impact of COVID-19 on tourism which affects the hotel business. Hong Leong Finance has reasonably good business fundamental but mainly for consideration for dividend investing (read further to the end, bonus stock is a better choice for dividend investing). Hong Leong Asia is a weak stock and Millennium & Copthorne (listed in LSE of UK) are related to hotel business in crisis, may not be considered.

Quek Leng Chan (Hong Leong Malaysia)

For Quek Leng Chan (Hong Leong Malaysia), there are more giant stocks (based on Dr Tee criteria), the best would be Hong Leong Bank, a Malaysia giant bank stock, comparable with another biggest bank giant stock, Public Bank (Bursa: 1295). Public Bank owner is also the Top 10 richest person in Malaysia, “Teh” Hong Piow (郑鸿标), the surname in English is also another variation from Dr “Tee” surname (郑) and more popular “Tay” in Singapore, but from different families. Both Hong Leong Bank and Public Bank are the few remaining private banks with excellent management (but from older generation, success plan could be a concern) in Malaysia which survive decades of merging and acquisition by government linked banks. Although Public Bank is not the “Bonus Stock” here but readers may want to consider together with Hong Leong Bank when planning for bank stocks, both are equally good, but Public Bank is bigger in size (No 3 largest bank in Malaysia).

Hong Leong Finance Group is another giant finance stock in Malaysia, excellent business performance is comparable with Hong Leong Bank. An investor may only need to consider 1 giant stock from Hong Leong groups of Kwek/Quek family, so that limited capital may be diversified with lower risks to more businesses, sectors and countries. Hong Leong Industries are slightly lower performance than both giant stocks (Hong Leong Bank and Hong Leong Finance Group), having growing business as well. 

Guoco Group has 3 stocks listed, acceptable business but may not worth investing: GuocoLand Limited (SGX: F17) – Singapore Property Stock (No 5 largest property developer in Singapore), GL Limited (SGX: B16) – Singapore Hospitality Stock, GuocoLand Malaysia (Bursa: 1503) – Malaysia Property Stock. Remaining 2 stocks may not worth consideration: Hong Leong Capital, HLCAP (Bursa: 5274) – Malaysia Investment Stock (suspended due to public shareholding <25%) and Hume Industries, HUMEIND (Bursa: 3301) – Malaysia Cement Stock which has weak performance, could be due to bearish property construction industry in Malaysia.

Bonus Stock No 1: Hup Seng (Bursa: 5024) – Malaysia F&B Growth Dividend Stock

Sounds confusing of Kwek vs Quek? Another little giant F&B stock in Malaysia, Hup Seng (Bursa: 5024), biscuit family from a small town, Batu Bahat of Johor, Malaysia also share the same surname of Kwek (郭) in Chinese but all 3 brothers (founders) have different surnames spelled in English: Kuo Choo Song, Keh Chu Koh and Kerk Chiew Siong, same reason as above (also same generation as Hong Leong leaders).  This difference won’t stop the family to develop Hup Seng from a tiny biscuit factory into a listed public company in Bursa. In fact, Hup Seng has growing business with steady cash flow (products such as “ping pong” Marie biscuit and crackers are popular in Malaysia and Singapore).  Hup Seng is actually a growth dividend stock (nearly no debt for past decade), share price is only corrected by 20% during recent global stock crisis during pandemic and quickly recover, now even higher before the Coronavirus crisis. This bonus stock is a good example of a giant stock does not need to be big in size.

Bonus Stock No 2: Hap Seng (Bursa: 3034) – Malaysia Plantation Growth Dividend Stock

Be careful when searching for Hup Seng stock, don’t mix up with another giant stock (Bonus No 2), Hap Seng (Bursa: 3034) with slightly different “surname” but it is a plantation stock, may also be positioned for growth dividend investing. So, regardless which “Kwek” or which “Hup/Hap” Seng stock, as long as it is a giant stock, then it could potentially reward the investors with growing business but patience is required.

In fact, there are 3 “Kwek” families from the Top 10 richest families in Singapore and Malaysia.  Besides Kweks from Hong Leong Group (Kweks of Hup Seng are too small) are in the Forbes’ list, there are Kuok Family (Robert Kuok – the richest person in Malaysia and nephew Kuok Khoon Hong – Wilmar Chairman, No 9 richest person in Singapore) and Kwee Family (Pontiac Land Group), No 8 richest family in Singapore. Perhaps these could be future articles for Dr Tee.

Based on Forbes’ wealth estimation, Quek Leng Chan (Hong Leong Malaysia) has about US$9 Billion net worth, about 3 times more than cousin, Kwek Leng Beng (Hong Leong Singapore). The difference in wealth (assuming starting fund is close 50 years ago) could be due to more giant growth stocks in Hong Leong Malaysia, resulting in faster growth in wealth over the past decades for Quek Leng Chan.

A person or family could become very rich, business (private company) itself may be insufficient, usually is supported by at least a giant stock, then wealth could become more than 10 or 100 times over time after public listing. A convincing example is the world richest person, Jeff Bezos with US$143 Billion net worth (more than 10 times of entire Hong Leong Group of 2 countries), becoming very rich because of Amazon stock (NASDAQ: AMZN), not just because of earning in business (Price Earning ratio, PE is 102, implying he could multiply his wealth 102 times through stock market). Of course, there are more examples, including Mark Zuckerberg, founder of Facebook, No 6 richest person in the world, net worth of $63 Billion is only possible after Facebook is listed (NASDAQ: FB) with support of growing business. Both Amazon and Facebook businesses may not be recession proof but certainly “Coronavirus pandemic proof”, with more lockdown globally, users could be even more, strong share price performance is a recognition of high growth stock.

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There are 30 STI index component stocks including City Development of Kwek Family (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

There are 30 Malaysia Bursa KLCI index component stocks including Hong Leong Bank and Hong Leong Finance Group of Quek Family (investor has to focus only on giant stocks for investing):
CIMB (Bursa: 1023) CIMB GROUP HOLDINGS BERHAD, DIALOG (Bursa: 7277) DIALOG GROUP BERHAD, DIGI (Bursa: 6947) DIGI.COM BERHAD, GENM (Bursa: 4715) GENTING MALAYSIA BERHAD, GENTING (Bursa: 3182) GENTING BERHAD, HAPSENG (Bursa: 3034) HAP SENG CONSOLIDATED BERHAD, HARTA (Bursa: 5168) HARTALEGA HOLDINGS BERHAD, HLBANK (Bursa: 5819) HONG LEONG BANK BERHAD, HLFG (Bursa: 1082) HONG LEONG FINANCIAL GROUP BERHAD, IHH (Bursa: 5225) IHH HEALTHCARE BERHAD, IOICORP (1961) IOI CORPORATION BERHAD, KLCC (Bursa: 5235SS) KLCC PROPERTY HOLDINGS BERHAD, KLK (Bursa: 2445) KUALA LUMPUR KEPONG BERHAD, MAXIS (Bursa: 6012) MAXIS BERHAD, MAYBANK (Bursa: 1155) MALAYAN BANKING BERHAD, MISC (Bursa: 3816) MISC BERHAD, NESTLE (Bursa: 4707) NESTLE MALAYSIA BERHAD, PBBANK (Bursa: 1295) PUBLIC BANK BERHAD, PCHEM (Bursa: 5183) PETRONAS CHEMICALS GROUP BERHAD, PETDAG (Bursa: 5681) PETRONAS DAGANGAN BHD, PETGAS (Bursa: 6033) PETRONAS GAS BERHAD, PMETAL (Bursa: 8869) PRESS METAL ALUMINIUM HOLDINGS BERHAD, PPB (Bursa: 4065) PPB GROUP BERHAD, RHBBANK (Bursa: 1066) RHB BANK BERHAD, SIME (Bursa: 4197) SIME DARBY BERHAD, SIMEPLT (Bursa: 5285) SIME DARBY PLANTATION BERHAD, TENAGA (Bursa: 5347) TENAGA NASIONAL BHD, TM (Bursa: 4863) TELEKOM MALAYSIA BERHAD, TOPGLOV (Bursa: 7113) TOP GLOVE CORPORATION BHD.

Readers may feel that the riches are too far to reach. In fact, retail investors may leverage on these rich families or individual, investing in their giant stocks at lower optimism prices during global financial crisis when others are fearful (mastery of investment clock), while their strong businesses continue to grow during the crisis, eventually could reward the investors with capital gains when crisis is over and others are greedy this time.

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

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9 Stocks of Frasers Property & Thai Beverage (醉翁之意不在酒)

FCT Frasers Centrepoint Trust Thai Beverage Frasers Property Stock Market

Behind each giant stock, there is usually a giant businessman.   In this article, you will learn the business empire of the third richest person in Thailand, Charoen Sirivadhanabhakdi with not 1 but 9 F&B and property stocks (6 Singapore stocks & 3 Thailand stocks):

1) Thai Beverage (SGX: Y92) – Singapore Giant F&B Stock

2) F&N (SGX: F99) – Singapore F&B Stock

3) Frasers Property (SGX: TQ5) – Singapore Property Stock

4) Frasers Centrepoint Trust, FCT (SGX: J69U) – Singapore Giant Retail REIT

5) Frasers Logistics & Commercial Trust (SGX: BUOU) – Singapore Commercial REIT

6) Frasers Hospitality Trust (SGX: ACV) – Singapore Hospitality REIT

7) Frasers Property Thailand (SET: FPT) – Thailand Property Stock

8) Frasers Property Thailand Industrial REIT (SET: FTREIT) – Thailand Industrial REIT

9) Golden Ventures REIT (SET: GVREIT) – Thailand Commercial / Hospitality REIT

These 9 stocks are in common as they all owned by Charoen Sirivadhanabhakdi (苏旭明), a Chinese Thai whose Thai surname is granted by King of Thailand, showing strong reputation in Thailand. He started business originally in F&B sector (the largest alcoholic drinks producer in Thailand, eg. whiskey, beer, etc), then diversifying into property (the largest landlord in Thailand, owning with the most areas of land), becoming 2 main business pillars of his business. 

Charoen took a major action in Year 2012 to acquire F&N, which is later reorganized into “new” F&N (mainly non-alcoholic drinks business in Singapore, familiar brands such as 100plus, Fruit Tree, Seasons, NutriSoy, etc) and Frasers Property (property segment).  The new F&N after the reorganization, is no longer a giant stock, just a normal F&B company (non-alcoholic drinks usually have lower profit margin with more competition).

Frasers Property is the parent stock of property segment, including other 6 subsidiary property stocks / REITs, 3 in Singapore and 3 in Thailand. All 7 Frasers group of property stocks have reasonably good business due to stable property business but there is only 1 giant stock, Frasers Centrepoint Trust (FCT).

In this article, out of 9 stocks of Charoen, we will focus only in his 2 giant stocks, ThaiBev and FCT.

1) Thai Beverage (SGX: Y92) – Singapore Giant F&B Stock

Charoen expanded his empire further over the past decades with aggressive Merging & Acquisitions, into F&B of regional countries (Vietnam, Myanmar, Singapore, etc).

Initially, he planned to list ThaiBev in Thailand Stock Exchange (SET) but encountering opposing voices (alcoholic drinks) as Thailand is a Buddhism country. Eventually, ThaiBev is listed in Singapore Stock Exchange, so Singapore investors has a local giant F&B stock to consider, leveraging on growing alcoholic drinks business in Thailand and regional countries. ThaiBev is 1 of the 30 STI component stocks, proving its strength in stock and business.

FCT Frasers Centrepoint Trust Thai Beverage Frasers Property Stock Market

ThaiBev is a growth stock, strong in business fundamental with growing business and solid cash flow.  However, debt level is high, especially in acquisition of Sabeco beer business in Vietnam. The share prices over the past decade has gone up 5 times, facing 2 times of major price corrections of nearly 50% during high debt period and again over the past few months of global stock crisis. Currently, the stock price has gradually recovered together with global stock markets. Unlike other sectors of business which may be affected by black swan such as Coronavirus pandemic, ThaiBev is defensive in F&B business (during the last Global Financial Crisis of 2008-2009, business was stable).  Perhaps during crisis, people may consume more alcoholic drinks to forget the pains? Besides 5 times capital gains in stocks, ThaiBev gives consistent dividend with about 3% yield currently. It is a good midfielder stock for both capital gains and passive income.

There are 30 STI index component stocks including Thai Beverage (investor has to focus only on giant stocks for investing): DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

2) Frasers Centrepoint Trust, FCT (SGX: J69U) – Singapore Giant Retail REIT

Besides Capitamall Trust, CMT (SGX: C38U), Frasers Centrepoint Trust is another giant retail REIT, both control most of the shopping malls in Singapore.  FCT has 7 shopping malls (Causeway Point, Waterway Point, Northpoint City, Bedok Point, Changi City Point, Anchorpoint, YewTee Point) but about half of rental revenue is from Causeway Point, having portfolio concentration risk but tenants distribution are diversified with over 99% occupancy rate for Causeway Point.

FCT Frasers Centrepoint Trust Thai Beverage Frasers Property Stock Market

Besides consistent growing dividend payout record (average 5% dividend yield, it was over 7% dividend yield when share prices dropped nearly to half over the past few months of global stock crisis), FCT has attracted long term investors to support the share prices by about 5 times with growing business.  FCT is a cyclic REIT, following economic cycles in stock performance, therefore more suitable to Buy Low Sell High with mega economic cycle, buying low during low optimism in global financial crisis, holding for 5 to 10+ years until high optimism, selling for capital gains.

Despite Coronavirus would affect the income distribute for the next 1-2 quarters due to possible cash reserve and also delay in rental payment by tenants, it won’t affect longer term investor with a few years of holding power, collecting over 5% dividend yield (even if DPU may be cut by 50%, still more than bank interest rate of 1%) during crisis, enjoying capital gains when crisis is over one day.

There are 52 REITs and Business Trusts Stocks in Singapore including Frasers Centerpoint Trust (investor has to focus only on giant stocks for investing):
AIMS APAC Reit (SGX: O5RU), ARA Hospitality Trust USD (SGX: XZL), ARA LOGOS Logistics Trust (SGX: K2LU), Ascendas Reit (SGX: A17U), Ascendas India Trust (SGX: CY6U), Ascott Trust (SGX: HMN), Asian Pay Tv Trust (SGX: S7OU), BHG Retail Reit (SGX: BMGU), CapitaLand Commercial Trust (SGX: C61U), CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China Tr (SGX: AU8U), CDL Hospitality Trust (SGX: J85), Cromwell Reit EUR (SGX: CNNU), Cromwell Reit SGD (SGX: CSFU), Dasin Retail Trust (SGX: CEDU), Eagle Hospitality Trust USD (SGX: LIW), EC World Reit (SGX: BWCU), Elite Commercial Reit (SGX: MXNU), ESR-REIT (SGX: J91U), Far East Hospitality Trust (SGX: Q5T), First Reit (SGX: AW9U), Frasers Centrepoint Trust (SGX: J69U), Frasers Hospitality Trust (SGX: ACV), Frasers Logistics & Commercial Trust (SGX: BUOU), FSL Trust (SGX: D8DU), HPH Trust SGD (SGX: P7VU), HPH Trust USD (SGX: NS8U), IREIT Global (SGX: UD1U), Keppel Infrastructure Trust (SGX: A7RU), Keppel Pacific Oak US REIT (SGX: CMOU), Keppel DC Reit (SGX: AJBU), Keppel Reit (SGX: K71U), Lendlease Reit (SGX: JYEU), Lippo Malls Trust (SGX: D5IU), Manulife Reit (SGX: BTOU), Mapletree Commmercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), Mapletree North Asia Commercial Trust (SGX: RW0U), NetLink NBN Trust (SGX: CJLU), OUE Commercial Reit (SGX: TS0U), ParkwayLife Reit (SGX: C2PU), Prime US Reit (SGX: OXMU), RHT HealthTrust (SGX: RF1U), Sabana Reit (SGX: M1GU), Sasseur Reit (SGX: CRPU), Soilbuild Business Space Reit (SGX: SV3U), SPH Reit (SGX: SK6U), Starhill Global Reit (SGX: P40U), Suntec Reit (SGX: T82U), United Hampshire US Reit (SGX: ODBU).

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宋·欧阳修《醉翁亭记》:“醉翁之意不在酒,在乎山水之间也”。

A stock investor may not need to be an alcoholic to invest in F&B giant stock such as ThaiBev. Similarly, Charoen is smart to hide his fortune in property (a way of diversification), one could outsmart him by investing in his best giant REIT, FCT.  The higher level of investing is to leverage on Top 10 richest persons in each country or even in the world as your defender, investing in their best giant stocks at lousy prices during low optimism period, eg Global Financial Crisis when others are fearful.

There are 30 STI index component stocks including Thai Beverage (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

It is better to learn how to fish (investing), instead of waiting for the fishes (stock investing ideas). Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

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7 CapitaLand Giant REITs for Dividend (CMT + CCT = CICT) (双剑合璧)

CapitaLand Giant REITs for Dividend

CapitaLand is Temasek property giant stock, having 2 giant Singapore REITs: CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT). Many Singapore investors like REITs for passive income generation through quarterly dividend payment. After the announcement of merging, both REITs suffer about 40% price correction during global stock crisis with Coronavirus fear, dividend yields are more than 6%, attractive for long term investors.

Some potential REIT investors would like to know should they invest in CMT or CCT before the merging, which one has more potential, or should they wait until the merging of 2 REITs into CapitaLand Integrated Commercial Trust (CICT), the largest Singapore REIT by June 2020.

Read the article further to find out the critical answers for CMT and CCT, not learning only 2 REITs but all 7 stocks related to parent stock CapitaLand, including 4 REITs and trusts in the same group: Ascendas REIT, Ascott Residence Trust, Ascendas India Trust and CapitaLand Retail China Trust.

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CapitaLand is the largest property developer in Asia (after merging with Ascendas and Singbridge), becoming a key Temasek property investment portfolio.  CapitaLand has total of 6 REITs / Business Trust in Singapore:

1) CapitaLand (SGX: C31) – Singapore Property Giant Stock

2) CapitaLand Mall Trust, CMT (SGX: C38U) – Retail REIT Giant Dividend Stock

3) CapitaLand Commercial Trust, CCT (SGX: C61U) – Office REIT Giant Dividend Stock

4) Ascendas REIT (SGX: A17U) – Industrial REIT Giant Dividend Stock

5) Ascott Residence Trust (SGX: HMN) – Hospitality REIT Dividend Stock

6) Ascendas India Trust (SGX: CY6U) – Business Trust Dividend Stock

7) CapitaLand Retail China Trust (SGX: AU8U) – Retail REIT Dividend Stock

In summary, all 7 CapitaLand group of stocks have reasonable strong business fundamental, all 6 REITs / trusts may be considered for dividend investing but only 3 of them are giant REITs stocks (based on Dr Tee giant criteria): CMT, CCT and Ascendas REIT. Sibling stocks of Ascott Residence Trust, Ascendas India Trust and CapitaLand Retail China Trust are relatively weaker, more suitable for pure dividend investing but subject to cyclic stock market risk (eg. capital loss during global stock crisis with limited long term growth). Parent stock, Capitaland, is a blue chip stock, behaving as if a fund with all the subsidiary stocks, more suitable for low capital investor who needs diversification.

There are 30 STI index component stocks including CapitaLand Mall Trust and CapitaLand Commercial Trust (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

By law, 90% of REIT incomes has to be redistributed back to shareholders in the form of dividend, therefore it is a popular passive income generator. If a REIT pay 4 times yearly, an investor with 3 REITs could receive 12 payments yearly, helping to offset monthly expenses. When return from monthly dividend is more than monthly expenses, an investor would become financial free. However, certain REITs may not pay consistent dividend due to unstable business and a few could even go bankrupt if not properly managed. Business Trust (eg. Ascendas India Trust) seems similar to REIT but it is not required by law to pay dividend, therefore creating an uncertainty in the future which dividend payment is not guaranteed.

In this article, we will focus on 2 giant REITs, CMT and CCT which will be merged soon. Sharing is for educational purpose, please make your own decision. Before merging announcement, CMT performs relatively better than CCT from overall investing consideration.  So, CCT investors would benefit more than CMT investor.

CapitaLand Giant REITs for Dividend CCT CMT

The merging deal is for CMT to acquire CCT by exchange every share of CCT with 0.72 share of CMT + cash $0.259/share.  Since the announcement from 22 Jan 2020 until today, CMT and CCT share prices are closely correlated as mirror image with this formula:

CCT = 0.72 CMT + 0.259

It means after the merging announcement, there is not much difference now as CMT and CCT prices movement of stocks follow the equation above closely. Even if an investor is interested in CMT, the decision of whether to invest now or after official merging in June 2020, should be based on stock market outlook, not expecting any drastic change in share price after the official merging.  In fact, over the past 2 months of global stock crisis, both CMT and CCT dropped by about 40% in share prices, even after recovering in the last few weeks, CMT is still at low optimism < 25%. In general, before merging, CMT is more defensive while CCT is more cyclic, therefore future CICT REIT may behave in between both REITs, more cyclic than CMT, more defensive than CCT.

Coronavirus pandemic has affected both CMT and CCT as some tenants may not pay rents on time but this could be recovered later when Coronavirus has ended or fading away over the next few months.  Occupancy rates of both REITs are high (about 99%), any withdrawal by tenant (eg. a few weaker F&B or consumer companies may not be able to sustain) may be quickly replaced by new tenant but rental increase would be limited. If Coronavirus is not a long term issue (under the worst case, vaccine could be developed in about 1 year), major correction in share prices for either CMT or CCT could be an opportunity to accumulate with dividend yield around 6%. Assuming the worst case of losing 20% tenants (dropping from 99% to 80% occupancy) if Coronavirus may stay for 1 more year with 20% people in the world staying at home during lockdown, average dividend yield is correct to around 5%, still better than keeping cash in bank with only 1% dividend. When crisis is over, an investor could enjoy the capital gains with potential share price appreciation due to market greed.

Before merging, CMT and CCT already has joint portfolio, eg. Raffles City (40% CMT, 60% CCT). After merging, the new CICT REIT would dominate both retail shopping malls and offices in Singapore, having more capital to expand in overseas.  However, inorganic growth through more acquisition (eg. overseas properties) may or may not add value to CICT as it depends on expertise of REIT manager, able to find high quality properties at discounted prices (eg. during economic crisis), adding more potential to DPU (dividend per unit). Over expansion sometimes may result in higher risk (higher gearing ratio, which would become higher after merging as CMT has to pay some cash to CCT investors) but acceptable for CICT with dual level sponsors of CapitaLand and Temasek.

There could be more merging and acquisition activities during the global stock crisis. A giant stock does not need to be the “biggest” company, more importantly, strong in fundamental with growing business, therefore even a small company could be a giant stock.

A smart investor may consider only the strongest subsidiary giant stock of CapitaLand group, which is protected by the sponsor CapitaLand, which is further protected by another bigger sponsor, Temasek.  This implies for the giant stock to fail (eg. go bankrupt), it has to hurt CapitaLand or even Temasek first.  However, safer stocks may not be the best choice for investment as growth are limited.

There are 52 REITs and Business Trusts stocks including CapitaLand Mall Trust and CapitaLand Commercial Trust (investor has to focus only on giant stocks for investing):
AIMS APAC Reit (SGX: O5RU), ARA Hospitality Trust USD (SGX: XZL), ARA LOGOS Logistics Trust (SGX: K2LU), Ascendas Reit (SGX: A17U), Ascendas India Trust (SGX: CY6U), Ascott Trust (SGX: HMN), Asian Pay Tv Trust (SGX: S7OU), BHG Retail Reit (SGX: BMGU), CapitaLand Commercial Trust (SGX: C61U), CapitaLand Mall Trust (SGX: C38U), CapitaLand Retail China Tr (SGX: AU8U), CDL Hospitality Trust (SGX: J85), Cromwell Reit EUR (SGX: CNNU), Cromwell Reit SGD (SGX: CSFU), Dasin Retail Trust (SGX: CEDU), Eagle Hospitality Trust USD (SGX: LIW), EC World Reit (SGX: BWCU), Elite Commercial Reit (SGX: MXNU), ESR-REIT (SGX: J91U), Far East Hospitality Trust (SGX: Q5T), First Reit (SGX: AW9U), Frasers Centrepoint Trust (SGX: J69U), Frasers Hospitality Trust (SGX: ACV), Frasers Logistics & Commercial Trust (SGX: BUOU), FSL Trust (SGX: D8DU), HPH Trust SGD (SGX: P7VU), HPH Trust USD (SGX: NS8U), IREIT Global (SGX: UD1U), Keppel Infrastructure Trust (SGX: A7RU), Keppel Pacific Oak US REIT (SGX: CMOU), Keppel DC Reit (SGX: AJBU), Keppel Reit (SGX: K71U), Lendlease Reit (SGX: JYEU), Lippo Malls Trust (SGX: D5IU), Manulife Reit (SGX: BTOU), Mapletree Commmercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), Mapletree North Asia Commercial Trust (SGX: RW0U), NetLink NBN Trust (SGX: CJLU), OUE Commercial Reit (SGX: TS0U), ParkwayLife Reit (SGX: C2PU), Prime US Reit (SGX: OXMU), RHT HealthTrust (SGX: RF1U), Sabana Reit (SGX: M1GU), Sasseur Reit (SGX: CRPU), Soilbuild Business Space Reit (SGX: SV3U), SPH Reit (SGX: SK6U), Starhill Global Reit (SGX: P40U), Suntec Reit (SGX: T82U), United Hampshire US Reit (SGX: ODBU).

Learn from Dr Tee 4hr Free investment course on global dividend giant stocks to collect passive income during low optimism in stock crisis, then enjoying capital gains with growing share prices when crisis is over.

Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

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5 Cheung Kong Super Hong Kong Stocks (长江一号)

Cheung Kong Stock CKH CKI CKA Power Assets Fortune Reit HKEx HPH Trust

Sir Li Ka-Shing (李嘉诚) is the richest person in Hong Kong for decades, earning a nickname of “Superman Li” for his reputation in the business world. He was born in 1928 in Chao Zhou (潮州) of China (Dr Tee visited there several years ago, Li Ka-Shing donated a lot of money to his hometown), therefore 92 years old so far. Technically he has retired but mentally never stop working for 1 day, still an advisor to his children and his beloved Cheung Kong Holdings.

Cheung Kong Group is famous initially as a property company, then expanding over the decades, becoming a multinational conglomerate with diversified businesses. CK parent stock is assigned #1 stock ticker in HKEx stock exchange (长江一号), showing its strength as a Hong Kong blue chip giant stock. In Year 2015, there is a major restructuring of Cheung Kong, merging with Hutchison Whampoa, forming a new company Cheung Kong Holdings (registered in Bermuda, could be due to long term planning) with 2 main companies with 2 stocks:

CK Hutchison (CKH) – (HKEx: 1) – For non-property related business

CK Assets (CKA) – (HKEx: 1113) – For proper related business

This way, it is clearer to investors on choices of investment based on these 2 divisions. However, the reorganization has affected the long term analysis of Cheung Kong as there are significant relocation of assets between 2 divisions of companies.  Therefore, it is a born of 2 “new” companies with 5 years of history in integrated business reporting but share price of CKH is much longer due to its extension of former parent stock, providing additional references on share prices.  It is important for a smart investor to analyze each segment of business for both CK companies before making decision of which stock to invest.

In fact, CK Holdings have at least 11 stocks listed within the group (only 5 highlighted ones are giant stocks):

1) CK Hutchison (CKH) – (HKEx: 1) – CK Parent Giant Stock (Non-property Division)

2) CK Infrastructure (CKI) – (HKEx: 1038) – Utility Parent Giant Stock

3) Power Assets (PA) – (HKEx: 6) – Utility Subsidiary Giant Stock

4) CK Life Sciences – (HKEx: 775) – Biotechnology Stock

5) Tom Group – (HKEx: 2383) – Chinese language media stock

6) HPH Trust – (SGX: P7VU) – Port Trust Stock

7) Husky Energy – (TSE: HSE) – Energy stock listed in Canada

8) CK Assets (CKA) – (HKEx: 1113) – CK Parent Giant Stock (Property Division)

9) Fortune Reit – (HKEx: 778) – CK Giant Reit

10) Hui Xian REIT – (HKEx: 87001) – CK Reit

11) Prosperity REIT – (HKEx: 808) – CK Reit

Out of 10 CK stocks, there are 4 giant stocks included in 50 Hang Seng Index component stocks: CKH, CKA, CKI and PA.  So, technically Superman Li could move Hong Kong stock market (about 4%).  This is similar to “rival” Jardine Group, could move Singapore Straits Times Index (about 15%) with 5 component stocks. In 1980s, Li Ka-shing was aiming to “invest” more in Hongkong Land of Jardine Group but was defeated by cross-shareholding structure of Jardine (another long story, read Dr Tee earlier article on Jardine Group of 7 giant stocks).

Not all the 10 CK stocks are strong based on Dr Tee giant stock criteria. There is only 1 more giant CK subsidiary stock, Fortune Reit is a giant Reit (formerly dual listing, after delisting from SGX, now only listed in HKEx).

So, additional comments will be given below on these 5 giant CK stocks from different businesses. An investor may select either the parent group (CKH or CKA) if want to consider average of entire group business (non-property vs property) as if a fund, or focusing on smaller individual stock of subsidiaries (CKI, PA, Fortune Reit) on specific business segment.

1) CK Hutchison (CKH) – (HKEx: 1) – CK Parent Giant Stock (Non-property Division)

CK Hutchison has 5 main business segments in non-property division. Investing in CKH stock means investing in all business segments.

1.1) Port

The port businesses are relatively stable in the past but Coronavirus crisis in Year 2020 would affect the results for Year 2020. HPH trust (not a giant stock with limited business potential) is only a small part of CK port business.

1.2) Retail

Major business is Watson for health and beauty (15794 stores with 12 brands worldwide). Business growth in China and Asia are faster than in western world. This is consumer related business, therefore Coronavirus would seriously affect the business for a few quarters. Temasek is also a shareholder for Watson, was planning to sell it.

1.3) Infrastructure / Utilities

This is main passive income generator for CKH. More details later under discussions of subsidiary giant stocks CK Infrastructure and Power Assets.

1.4) Telecommunication

This segment of business is growing in general, having mixed performance in different countries. It is a more defensive business.

1.5) Energy / Investment / Others

Energy segment is making losses while other remaining business is less significant to contributing to entire group.

CKH business (non-property) is not as defensive as CKA (property), therefore over the past 5 years since the group reorganization, share price has been dropping to nearly to 1/3 from peak of $120 to $45. Despite the Price to Book (PB) ratio is 0.5 but the asset is non-property, not as high quality.  The main investing advantage for CKH is low optimism level < 25%, aligning to global stock crisis (following economic cycles) but it could suffer in business during Coronavirus crisis due to global lockdown.

Dividend yield of 5.7% is attractive but investors may need to prepare for potential 50% cut as the worst case scenario (despite CKH has good track record of consistent dividend payment) during the winter time of CKH business, implying 3% yield which is still better than holding cash with 1% interest for cash deposit in bank.  CKH has significant business in Europe, when economy is restarted, CKH quarterly business performance would improve gradually.

2) CK Infrastructure (CKI) – (HKEx: 1038) – Utility Parent Giant Stock

3) Power Assets (PA) – (HKEx: 6) – Utility Subsidiary Giant Stock

Both CKI and PA stocks may be studied together as CKH owns CKI, then CKI owns PA, all inter-related, just different ways of grouping. So, an investor may decide investing in parent company or subsidiary business specifically in utilities.

CKI has many global businesses of infrastructures and utilities (electricity, water, gas), holding strategic asset of certain countries and cities (eg. main electricity supplier of London). Power Assets invests mainly in electricity, eg. providing partial electricity supply to Hong Kong, duopoly with another giant electricity stock, China Light and Power, CLP (HKEx: 2). Readers may guess if CKH could get HKEx stock ticker #1, CLP could get stock ticker #2, implying it is another blue chip stock with proven history (if there is a chance, we may share further on CLP or other monopoly stocks in future).

Utilities business are defensive as people may not need to shop during Coronavirus pandemic or global financial crisis but they still need basic usages of electricity, water and gas. So, utilities or infrastructure related stocks usually show their strength during economic crisis as defensive stocks which could still pay dividend with steady cash flow generated, then gradual capital gains in longer term with recovery and subsequent growth of economy.

In general, both CKI and PA are having close performance in stocks, prices have dropped by half over the past 5 years (more defensive than parent stock CKH which dropped to nearly 1/3 from the peak price), dividend payment has been stable due to defensive industry, current dividend yield is over 5%.  The main “risk” of both stocks is bearish price trend over the past few years (despite at lower optimism level, buy low may still get lower in prices), not so much on business risks (minimal), therefore investors who are reluctant to catch the falling knife in prices, may wait for uptrend in prices, sacrificing passive income (dividend yield) with higher price to exchange for confirmation in price reversal to bullish range.

4) CK Assets (CKA) – (HKEx: 1113) – CK Parent Giant Stock (Property Division)

CK Assets are property-based businesses, listed as a new stock, therefore only having 5 years of share price history so far which are more defensive than CKH (dropping to 1/3), but price is cyclic in nature, dropping to half price. Price to Book (PB) ratio is also coming to a new low of 0.5, having 50% safety margin for high quality asset of property. 

However, Hong Kong property market (about 20 years for 1 market cycle) has been at high optimism after the average prices gone up by 4 times over the past 2 decades. Therefore, property stocks in Hong Kong in longer term, may suffer “loss” in valuation due to lower property prices if there are any crisis related to China or Hong Kong property bubble.  CKA at current price is 50% discount but “rival” property stock, Hongkong Land has 75% discount with PB around 0.25. So, after relative comparison with peers, CKA 50% discount in price may not be excellent.  In fact, there are many other property giant stocks in Hong Kong which are “cheap and good”, readers may learn from Dr Tee to explore more in future.

5) Fortune Reit – (HKEx: 778) – CK Giant Reit

There are 3 REITs listed from CKA parent group: Prosperity Reit and Hui Xian Reit are relatively weaker, so we focus only in Fortune Reit.  Previously, Fortune Reit has dual listing in both HKEx and SGX but now only left HKEx. There is little difference to Singapore investors as there is no capital gain tax nor dividend withholding tax for Hong Kong stocks, except HKD/SGD is currently at high optimism (HKD is pegged to USD, similar trend for USD/SGD), future potential forex loss (when USD or HKD is depreciated vs SGD) could be compensated by dividend and capital gains of Hong Kong or US stock.

Fortune Reit drops over 40% in share price over the past 2 months of global stock crisis, resulting in high dividend yield of 7.4% with consistent dividend payout of its REIT portfolio. Risks of Coronavirus is minimized as China / Hong Kong conditions are much better than the rest of the world. Social unrest (eg. Hong Kong protesters last year) is also a lower risk now. The REIT is protected by Price-to-Book (PB) ratio of 0.4, rare for a strong REIT with 60% discount, implying under the worst case scenario, even if the company goes bankrupt, investors could still get back the capital (unlike other investors would suffer permanent loss buying stocks with low quality assets).  Usually PB is not a strong criteria for REIT, consistent rental collection from tenants is more important which Fortune Reit has a good track record. The REIT manager is also another familiar name: ARA Asset Management, used to be a giant stock with good reputation in Singapore but delisted several years ago (not surprise as this company is too good to share in long term with the public).

In short, investing in Fortune Reit could receive the protection from sponsor, CK Group, in addition to 60% safety margin in share price to property asset value. REIT (rental payment) could be more predictable than property-based business (eg. parent company CKA) which may suffer when property value declines. For a reit, even property value may decline, rental won’t fall as much, especially if located in strategic places with higher populations.

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If you could read until this line, it means that you are a serious investor as Dr Tee has spend half a day to write this article, you only need less than 30 min to read but need a few more days to digest to align the right CK stocks (1 of the 5 giant stocks) to your own personality. Each of the 5 CK giant stocks has its own pros and cons, may not be suitable for everyone. Overall, they all are at low optimism < 25%, implying higher potential for longer term investors. Their main “risks” may not be on business (Coronavirus could affect for Year 2020 but may not for long term), but more on bearish stock price trends since the group reorganization in 2015 till now. Global investors still try to find a sweet spot of balance between price and value for the “new” CK group of stocks.

Cheung Kong has been blue chip stocks for decades in Hong Kong, paying consistent dividend despite bearish stock prices or fluctuation in businesses. The main intangible “asset” of CK Group could be Li Ka-Shing, a trusted icon of CK for decades. Despite Mr Li has retired, he has transferred his business and investment knowledge to his 2 sons, Victor Li (taking over his empire of CK business) and Richard Li (inheriting most of his cash to start own business beyond CK Group). This way, 2 “tigers” won’t be in same jungle (only 1 main decision maker), smart move by a father with far vision to minimize potential family conflicts in the same business.

So, if readers may not have the same wisdom as Li Ka-Shing on investing, we may leverage on him through investing in CK group of giant stocks at lower optimism prices. Li family are unlikely to sell their stocks, therefore they would work day and night for you to grow the business as they are major shareholders (interest is aligned). Better still, readers may contribute no effort except just capital for investment at the right price (ability to press the button when seeing the signal with strategy aligning to own personality), Li family could then work for you for another generation until Victor Li may retire one day as well or passing to the third generation. Of course, you may then sell the stocks for capital gains one day or transfer the stock to your own second generation to keep.

If readers worry Li Ka-Shing may go bankrupt during global financial crisis (he went through at least 9 times over his 92 years of life experience), then smart investor may look for Top 10 richest persons in the world (Li Ka-Shing is only the 30th richest in the world), investing in their best stocks with stronger business than CK Group, forming a portfolio of Top 10 richest person’s giant stocks as a dream team portfolio.  Of course, you may not get a good discount in share prices when their businesses are very strong now, therefore stock “crisis” is usually a good opportunity to own some of these giant stocks with growing businesses.

Li Ka-shing stocks are stronger than many 50 Hang Seng HSI index component stocks or 30 STI index component stocks (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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7 Jardine King of Singapore Stocks (狮城股王)

Jardine Group SGX Jardine Matheson J36 Jardine Strategic Holding J36 Jardine Cycle & Carriage C07 Astra Asii Mandarin Oriental Hotel M04 Hongkong Land H78 Dairy Farm D01 Singapore Stocks Creative Technology C76 Berkshire BRK NYSE Sheng Siong OV8

Jardine Group is not just a company, it is a giant group with nearly 200 years of business history (started in 1832, then controlled by Keswick family for many generations till now).  Jardine group of companies cover many industries, eg. engineering, automotive, properties, hotel, supermarkets, etc.

Jardine group has 7 giant stocks (Jardine Matheson, Jardine Strategic, Jardine Cycle & Carriage, Astra, Hongkong Land, Dairy Farm, Mandarin Oriental Hotel), all are falling to very low optimism (mostly with optimism <10%) over the past 2 months of global stock crisis.  Since 5 of Jardine giant stocks (except Mandarin Oriental Hotel and Astra International – listed in Indonesia) are 30 STI component stocks (contributing to about 15% weightage), it has the strongest influence to Singapore stock exchange, more than individual stock of 3 major banks (DBS, OCBC, UOB) and Singtel.

There are 30 STI index component stocks including 5 Jardine stocks (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

6 Jardine stocks listed in Singapore Stock Exchange are secondary listing (primary listing in London Stock Exchange) and traded in USD (currently at high optimism vs SGD). USD usually performs better in bear market (safe haven), weaker during bull market, the longer term forex disadvantage of USD/SGD (about -2%/year USD depreciation) could be compensated by higher growth of 10+%/year of Jardine stock prices.

So, let’s learn to position in 7 Jardine stocks, all are giant stocks based on Dr Tee criteria but each Jardine stock has different characteristic, which may be considered for different personality of investors.

1) Jardine Matheson Holding – JMH (SGX: J36)

2) Jardine Strategic Holding – JSH (SGX: J37)

Jardine Matheson Holding, JMH is “King” of Singapore stocks (狮城股王), the highest share price in Singapore stock market history. JMH share price was peak around US$70/share a few months ago, before falling by 30% during Coronavirus crisis to about US$50/share. It is costly to invest even with minimum of 100 shares per lot (price in USD) = $50 x 1.43 (USD/SGD) x 100 = S$7150.

Highest stock price may not be always a giant stock, although most of the time, high stock prices are giant stocks, higher prices due to growing business over the decades. For example, world’s most expensive stock, Berkshire Hathaway (NYSE: BRK) managed by Warren Buffett, 1 share alone could be US$344,000 (nearly S$500k, could buy a 5-room HDB flat), currently selling at discount of US$290,000 (for details of Berkshire stock, refer to free eBook by Dr Tee on global Top 10 stocks).

The former Singapore stock king was Creative Technology (SGX: C76) with over S$60/share peak stock price recorded in year 2000 dotcom bubble. After the burst of technology bubble, not only stock price in crisis, Creative Technology also lost the giant stock title, company is no longer growing, share prices declining for 20 years till as low as $1/share. Therefore, long term investing requires monitoring of business fundamental, otherwise buy low may get lower over time, suffering huge capital loss. A common mistake for beginner in stock investing is usually buy a famous brand of stock at historical low price or 5-10 years low, assuming the price may recover in future which may not because future business is the key.

Similarly, during Coronavirus crisis, some sectors are badly affected (eg, airlines, F&B, hotel, etc), an investor needs to review whether the business with losses (more than 90% drop in revenue) could last with cash or net asset available. After the crisis is over, could the business recover quickly?

Jardine Strategic Holding, JSH is sibling of JMH, both are owning each other, a special cross-holding structure which could prevent hostile takeover. See another article of this topic: https://www.ein55.com/2017/03/jardine-group-uob-group-cross-holding-stock-network/

Both JMH and JSH stock performance are very close in longer term (eg over 10 years). Investing in either JMH or JSH is as if investing in Jardine fund of stocks with most the Jardine businesses. JMH has average of 1% higher dividend yield than JSH but JSH has average of about 1% higher yearly growth in share price than JMH, so effect is about the same. More details of JMH in earlier article: https://www.ein55.com/2016/04/choose-stocks-grow-30-times-price/


Both JMH and JSH are considered cyclic growth stocks, need to position with optimism less than 25%, best during global stock crisis or global financial crisis. Due to cyclic nature of these 2 stocks with minimal dividend for protection, it is more suitable for investing during recovery phase of stock crisis, avoid buying low get lower. When positioned right at significant low optimism in a severe global stock crisis, JMH and/or JSH may be considered for longer term holding due to high growth but need to monitor its cyclic businesses to certify that they are giant stocks (based on Dr Tee criteria) as this title of giant stock is not forever, eg. Creative Technology lost this title about 20 years ago.

“Buy Low” could only have chance to “Sell High” in longer term with condition that it is a giant stock. If not, “Buy Low” may become “Lower” in prices.

3) Jardine Cycle & Carriage – JCC (SGX: C07)

4) Astra International (IDX: ASii)

Jardine Cycle & Carriage, JCC is only a subsidiary of JSH but itself is already a giant automotive stock (familiar car brands:  Mercedes-Benz, Toyota, Honda and Kia). JCC also owns Indonesian automotive giant stock, Astra International (listed in Indonesia Stock Exchange).

JMH owns JSH, JSH owns JCC, JCC owns Astra. So, it is as if 4 levels of stock connection but stock performances are close. JMH and JSH could be considered together (either one). Similarly, JCC and Astra may be considered together through JCC (if easier to invest in Singapore stock than Indonesian stock, Astra).

JCC is a dividend growth giant stock (not for Astra), suitable for investing during low optimism stock market, protected by nearly 6% dividend yield (assuming car business drops during crisis, 50% cut in dividend still has about 3% dividend yield left, more than 1% bank interest rate for cash). When crisis is over, likely the growing business will justify for normal distribution of dividend. However, since it is not a REIT (by law needs to distribute 90% taxable income to shareholders as dividend), the company has the right to choose not to give dividend. Over the past 10 years, JCC has record of giving around 3% dividend yield, current high dividend yield of nearly 6% is mainly due to price dropped by about 50% over the past few months of global stock crisis, therefore dividend yield is doubled from 3 to 6%.

If one believes the Coronavirus crisis or any future crisis are unlikely to stop people from buying cars more than 1 year (eg. could not get out of home for 1 year to view the cars in showroom), then crisis in JCC stock prices could be an opportunity. However, for Q1-Q2/2020 with less shoppers due to global lockdown, there could be temporary drop in business which may be justified by 50% discount in share price.

5) Hongkong Land (SGX: H78)

Hongkong Land is a well-known property stock, owning grade-A commercial properties in both Hong Kong central and Singapore marina area. There are quite a few past articles by Dr Tee on Hongkong Land (https://www.ein55.com/tag/hongkong-land/), mainly an undervalue property stock. However, over the past few years, buy low may get lower as Hongkong Land is not only following Jardine group, also affected by Level 2 property sector (Hong Kong / Singapore) and Level 3 stock property, as well as political economy (eg. over 100 days of Hong Kong protesters last year before Coronavirus crisis).

Among all the 7 Jardine giant stocks, Hongkong Land is the “safest” due to property asset selling at over 70% discount (price to book ratio, PB, is less than 0.3). The high dividend yield of 5% (eg from property rental) is a bonus for long term investor of Hongkong Land, providing passive income (even if 5% dividend yield is cut by half for next 12 months, still suitable as defender), no issue even if “crisis” of any form (protester, virus, etc) may last more than 5 years. During Coronavirus crisis, tenants of property could lose money due to less shoppers but landlord (Hongkong Land) still could collect stable rental.

Mid-term risk of Hongkong Land could be high property valuation in Hong Kong may not be sustainable if the average 20 years property cycle of Hong Kong falls from high optimism. So far Coronavirus only affects global stock markets and badly affect business of certain sectors, but not yet on property sector. Even so, long term outlook for Hong Kong and Singapore property sectors are steady gradual growth as a country surrounded by sea with limited land but nearly unlimited future population (both has the top 10 highest population density in the world with growing economy for decades) would support the growing property prices in decades to come.

In short, investing in Hongkong Land stock is an investment in Singapore and Hong Kong countries through as integrated stock and property markets.

6) Mandarin Oriental Hotel (SGX: M04)

Mandarin Oriental Hotel is not only a hotel in Singapore, it has many hotels globally. During Coronavirus crisis, hotel (hospitality sector) is badly affected. So, investor needs to monitor Q1 and Q2/2020 results of Mandarin Oriental Hotel before making decision.

Mandarin Oriental Hotel is a marginal giant stock, the weakest among 7 Jardine stocks. Even before Coronavirus crisis, business fundamental has been declining. Despite 60% discount in hotel asset with PB of 0.4, Mandarin Oriental Hotel is not as valuable as Hongkong Land.

For short term or mid-term cyclic trading strategy, this stock may be considered if there is a strong reversal in price trend, especially when Coronavirus condition may improve but risk is relatively higher than other 6 Jardine stocks.


7) Dairy Farm International (SGX: D01)

Dairy Farm is famous of its supermarket and consumer business (Wellcome, Cold Storage, Seven Eleven, IDEA, etc) in Hong Kong, Singapore and regional countries. During Coronavirus period, supermarket business should perform better (see how crowded when lockdown was announced) as is a consumer staples business, people still need to eat and drink, if they could not go out from home.

However, before Coronavirus crisis, Dairy Farm only has average business performance. It even sells some its seven eleven stores. It has stable dividend payment record, about 4% yield currently, possible to position as midfielder role. Competitor supermarket stock, Sheng Siong (SGX: OV8) performs better than Dairy Farm for business and stock prices. Sheng Siong has recovered the “losses” in stock prices as business is doing too good during Coronavirus period. Sheng Siong is only a young giant stock but does well in the current global stock crisis, having potential to be a true giant stock in future with more proven record.

Therefore, not all sectors are affected by the same crisis. Investor may explore stocks with stable businesses, leveraging on market fear to ask for over 20% discount in those growth stocks. Crisis is Opportunity when stock prices fall due to fear but business is still strong. Crisis is crisis when stock prices fall mainly due to weaker business.

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In summary, all 7 Jardine stocks are giant stocks at low optimism. However, the stock prices have been bearish for a few years, undervalue asset becomes more undervalue each year. Therefore, these Jardine stocks may not possible for traders without strong holding power as buy low may get lower in short term to medium term, unless there is a clear reversal in stock prices to uptrend again.

For long term investors who apply undervalue investing may consider Hongkong Land and Jardine Cycle & carriage stocks which pay over 5% dividend yield (but assume this amount may be cut by 50%). For very conservative investor, Hongkong Land with over 70% discount in asset value (PB < 0.3) is another strong consideration, even if Hongkong Land could not survive the unlikely Great Depression (<5% chance it may happen), investors may not lose the capital due to high safety of margin.

Strategies for investing in Jardine group is similar as other giant stocks at low optimism, multiple entries, eg 1, 3 or 5 “bullets” of capital, first entry at low optimism < 25%, subsequently optional entries could be either downtrend (5-10% lower, average down for investing) counter-trend investing or uptrend (5-10% higher, average high for trading) follow-trend trading if optimism is still less than 25%. It is fine if only 1 “bullet” (1 entry) is triggered (eg. stock market has V-shape recovery), future may follow short term or mid term trading for actions, to be reviewed again.

Sharing above for 7 Jardine stocks are for educational purpose (almost spend 1 day of Dr Tee valuable time writing this long article, hope it is an useful reference for readers). Please make your own decision with independent thinking. If you could read until this sentence, implying you have the determination to learn and apply stock investing.

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Temasek Acquires Crisis Stock Keppel Corp (趁虚而入)

Temasek acquires Keppel Corp BN4 stock

Temasek has offered partial acquisition to Keppel Corp (SGX: BN4) shareholders at the price of $7.35/share up to 51% ownership over 1 year period (with some conditions applied). Since this is not a full acquisition, some investors may be confused of what is fair price for Keppel Corp. Let’s study this acquisition offer in details.

Temasek owns 20.45% of Keppel Corp, intending to purchase shares owned by remaining shareholders (100 – 20.45% = 79.55%) to top up to 51% (still need 51% – 20.45% = 30.55%). So, it is partial acquisition of 30.55/79.55 = 38.4%. It means for every 1000 shares, 384 unit will be acquired.

The offer price of Temasek at $7.35 is about 20% premium over the average price before acquisition, aligned with several other acquisitions in Singapore. However, it only has 38.4% power, not the same as 100% power as other full acquisition (eg. Breadtalk current acquisition offer of $0.77, price would surge near to this price overnight after the announcement). Assuming the Keppel Corp share price is $5/share (on certain day), the theoretical share price after 38.4% partial acquisition = $5 + (7.35 – $5) x 0.384 = $5.90/share. Reader may replace this equation of $5 share price with any latest share price of Keppel Corp before acquisition.

Over the past 1 month of global stock crisis, Singapore stocks fall by about 30% in average but Keppel Corp only falls about 20%, aligning with 38.4% potential acquisition by Temasek which is about 1/3, therefore the stock corrections is also reduced by about 1/3 from 30% to 20%.

It means the global stock crisis still has about 60% impact on Keppel Corp prices. Therefore, an investor has to make decision mainly based on global stock crisis and current stock market condition with Keppel Corp value, not to assume price would recover to $7.35/share price eventually.

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Keppel Corp is a diversified corporation with 4 businesses: offshore &marine, property, infrastructure and investment. The 2 main pillars are Property (Keppel Land, contributing to about 50% company profits) and Oil & Gas (Keppel O&M, main source of losses over the past few years). Over the past 5 years after the oil price fell from $100 to $27/barrel, Keppel Corp suffers directly as main clients reduce the capital expenditure (eg. oil rigs), therefore Oil & Gas becomes a losing segment. 

Since 2015 crude oil crisis, Keppel Corp has temporary lost the giant stock title, currently a marginal giant (likely will become giant stock again after oil & gas sector recovery). Luckily Keppel Corp still has 50% earnings from Property (eg. Keppel Land and Keppel Reit), even Oil & Gas is a loss for several years (recovering to small profits in last 1 year), the entire company as a whole could still make a profit. Compared with competitor or sibling, Sembcorp Marine (SGX: S51, also owned by Temasek through Sembcorp Industries) which has full risk exposure to oil & gas crisis, losing money for several years, resulting in share prices falling from $5 to $0.70 (last 17 years low).

Some may think it is “cheaper” to invest in Sembcorp Marine stock (85% correction) compared to Keppel Corp stock ($13 falling to $5/share during oil & gas crisis, about 60% correction). This comparison is only valid if both companies are giant stocks (which are not) because “crisis is not opportunity” if business fundamental is weak, eg for the case of Sembcorp Marine. For Keppel Corp, it is still a 50% giant stock due to strong property business. Therefore, investor of Keppel Corp is actually investing in value of Keppel Corp property (main value) while taking advantage of falling share price (due to Oil & Gas crisis). It was a good move in year 2015 (beginning of oil & gas crisis) for Keppel Corp to offer full acquisition of Keppel Land which 100% profits of property business goes to Keppel Corp, offset the losses in Oil & Gas segment in Keppel O&M.

Assuming Temasek could successfully own 51% of Keppel Corp by end of 2020, it is a full control of company. This may allow possibilities of strategic merging of Temasek subsidiaries companies (eg. Keppel O&M and Sembcorp Marine) or restructuring of Temasek companies, eg. Keppel Corp and Sembcorp Industries (Temasek nearly has 50% control), etc, to maximize the asset values.

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During crude oil crisis with Keppel Corp at low optimism prices, Temasek leverages on crisis to have majority control of Keppel Corp at reasonable low price of $7.35/share. This also provides an option for Keppel Corp investors to sell for 20% profit. However, the global stock crisis has disturbed the plans as prices of Keppel Corp are falling even lower than before acquisition news. 

Analysis on Keppel Corp is beyond stock and Temasek, also requires understanding of property market and crude oil commodity market. So, it is a stock with complicated interactions of market signals, reflecting in final share prices. 

Temasek acquires Keppel Corp BN4

Here is a special Ein55 style, 50% Discount Method for investing in Keppel Corp during crisis (with or without Temasek acquisition) with multiple entries to fight against unknown market crisis ahead. Assuming $10 is a common high level prices (occurred during when economy and crude oil market are bullish), an investor may apply 50% discount in prices each time before each multiple low due several unforeseen market crisis.

$10 = High Level Price (potential future selling price level)

$5 = Crude Oil & Stock Crisis (3 times in 2009, 2016, 2020) after 50% discount x $10

$2.50 = Global Financial Crisis (17 years low) after another 50% discount x $5

$1.25 = Great Depression (20 years low) after another 50% discount x $2.50

This is a non-linear version of multiple entries for very conservative investor who hopes to buy low but afraid of prices could get lower. Assuming all the crisis come (hopefully not), this is average price after 3 entries (like Keppel Corp with property pillar could still survive):

($5 + $2.50 + $1.25) / 3 = $2.92

This is lower than using linear average down method at low optimism (assuming 3 entries with $1 lower each time):

($5 + $4 + $3) / 3 = $4

Each method (linear or non-linear 50% discount) has its benefits. Linear method is more likely to achieve in practical market, for those who wish to reduce downside risk through averaging (eg. 3 times x 33% capital). Non-linear method is for very conservative investor, demanding 50% discount each time before willing to take out precious cash from the pocket for investment. During the long holding period (could be 1-3 years, depending on severity of crisis), Keppel Corp investor may be given an average of 4-5% dividend yield (past 10+ years record), assuming the dividend is also cut by 50% due to crisis, one could still get about 2% dividend yield which is higher than fixed deposit in banks with 1% interest rate. After the crisis is over, assuming the average entry price is only $5 (only 1 crisis experienced), an investor may not need to sell at $10 average high prices for 100%, could even sell near to Temasek fair acquisition price of $7.35 which is over 40% higher than $5 price.

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Charlie Munger (partner of Warren Buffett) said the big money is not in the buying and selling, but in the waiting. Global stock crisis may happen only every 5 to 10 years. Similar to a lion ambushed, waiting patiently for target, when opportunity comes near, only then strike for higher chance of winning. It is the same for current global stock crisis, for investors “ambushed” for many years, it could be the right time to plan for a strategy to take action in stocks.

Frankly speaking, there are over 100 global giant property stocks and 44 global oil & gas giant stocks (based on Dr Tee criteria), which are much stronger than Keppel Corp. Some of these giant stocks are also falling in prices 20% – 50% recently, “Crisis is Opportunity” investing in these growing business (value) with significant discount in prices.

There are at least 26 Temasek / GLC stocks in Singapore including Keppel Corp, controlling shareholder with 15% or more ownership directly or indirectly (investor needs to focus only on giant Temasek stocks):
Singtel (SGX: Z74), DBS Bank (SGX: D05), ST Engineering (SGX: S63), Singapore Airlines (SGX: C6L), SIA Engineering (SGX: S59), Singapore Exchange (SGX: S68), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Sembcorp Marine (SGX: S51), Olam (SGX: O32), CapitaLand (SGX: C31), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascendas Reit (SGX: A17U), Ascott Hospitality Trust (SGX: HMN), Ascendas Hospitality Trust (SGX: Q1P), CapitaLand Retail China Trust (SGX: AU8U), Ascendas-iTrust (SGX: CY6U), Keppel Corp (SGX: BN4), Keppel Reit (SGX: K71U), Keppel DC Reit (SGX: AJBU), Keppel Infrastructure Trust (SGX: A7RU), Mapletree Logistics Trust (SGX: M44U), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree NAC Trust (SGX: RW0U).

Temasek stocks portfolio also affect about 15% of STI index stocks, which has strong impact on Singapore stock market. Here are 30 STI component stocks:
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

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Learn further from Dr Tee valuable 7hr Online Course, both English (How to Discover Giant Stocks) and Chinese (价值投资法: 探测强巨股) options, specially for learners who prefer to master stock investment strategies of over 100 global giant stocks at the comfort of home.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

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