Net Asset Value as of July 2014 (per unit): $13,248
The 1H2014 was generally a good period. Our Asia Fund was up 11.14% in the first six months of 2014, against a 2.24% return of our weighted benchmark. The Hang Seng Index was down 0.64% while the Straits Times Index was up 2.55%. The performance of the fund was significantly affected by the drop in UMS Holdings share price due to the sale from the CEO and AMAT. However, it is in our view that fundamentals of the company are still intact and the dividend payout is still sustainable based on current free cash flow levels.
In the 2Q2014, we would observe major changes within the portfolio. We have completely divested our investment in New Toyo. We felt that with our revised calculations, New Toyo does not offer us a wide enough margin of safety as initially calculated especially with the uncertainty of the business operations going forward. Also, we have been reducing our stake in Kingsmen Creative, in attempt to align our overall portfolio’s investment strategy.
At the same time, we took positions in Memtech International and SHC Capital. SHC Capital has recently announced a disposal of all their operations, and if successful would value the company at 37c per share. Current share price remains depressed due to investor’s skepticism of the deal going through and perhaps the lack of coverage on such a small-cap company. However, such a scenario is something similar to what we encountered in 2012 (Elite KSB).
Please feel free to email us if there are any questions regarding our investments.
Net Asset Value as of April 2014 (per unit): $12,386
For the first quarter of 2014, the fund has returned 3.91%, translating to an outperformance of the STI by 4.84%. Going forward, I would not be including the holdings here but rather create a separate page for my current holdings. Within the first quarter, I have sold my stake in Silverlake Axis at $0.92 and ComfortDelgro Corporation at $2.01. Having identified new undervalued stocks, I have deployed the cash into buying HupSteel at $0.21 and New Toyo at $0.305. I believe 2014 would definitely be an interesting year for the fund.
Given how KTIS (An associate of KingWan Corporation) has finalised its IPO date (click here), it has resulted in King Wan’s price to start normalising. Furthermore, with the owners of New Toyo indicating interest of selling their stake in the company, I believe value would be able to be unlocked this year.
For this period, unless there is any significant chances in the fund, I would be taking a break from blogging given how my university exams are around the corner. 🙂
Net Asset Value as of January 2014 (per unit): $11,920
For the Financial Year 2013, the fund returned 10.25%. While over the past two years, a theoretical $10,000 investment would have grown to $11,920, a 2-year annualised return rate of 9.6%, a cumulative return of 19.2%.
Despite the increase in value of the fund, the fund today remains undervalued. Going forward, repositioning of the fund is necessary – cashing out on stocks which have reached fair value.
Overall, 2013 has been an eventful year where we see markets improving from the Global Financial Crisis (Dow Jones/S&P500/NASDAQ reaching new highs). However, looking at PMI figures and other indicators, it does not truly support an economy that has fully recovered. Furthermore, with the recent gradual tapering by the FEDs and growth contraction in the China economy, we see money leaving emerging markets, moving back to the developed countries and into bonds, where investors are seeking safe haven. Going forward, I still see potential in the Asia market, however, I am in no hurry of deploying cash unless I find an attractive stock.