Below you will find my last month or so, trades and the reasons of buy/sell. Some trades are adding to my existing holdings. There are many reasons to justify each action, but I will merely mention those that matters most, or at least those that are most captivating.
Anyway, please also find my Portfolio last updated in July.
Alibaba 9988 – 260
China’s 1.4B population has a nominal GDP per capita of ~10KUSD p.a. compared to US and EU’s GDP per capita’s of ~65KUSD and 35KUSD respectively, pointing to room for growth. As of 2020, 60% of China’s total population lived in urban areas, implying that 40% of the population i.e. 550M still live in rural area with poor access to technology.
In 2019, Amazon’s revenue is 280B while Alibaba and Tencent reported 55B and 50B respectively, with a combined total revenue of less than half that of Amazon. And to think that Tencent main driver of revenue is not even E-commerce. Of course there are many competition for Alibaba, such as Amazon, Walmart (US), e-bay, Shopify (Canada), Rakuten (Japan), JD.com (China), Pinduoduo (China) etc. Yet, I think that there are still tremendous potential for Alibaba to grow. This is not to mention the impending Ant Financial IPO which I feel will propel Alibaba’s prices further upwards.
Tencent 腾讯 0700 – 511, NetEase 网易 9999 – 154.8
As we move into the digital era, I also think that there will also be more and more “gamers” in the new generation of population in Asia. Tencent and NetEase are two giant gaming service providers that will reap the benefits. Both companies also have many other leading online services such as Tencent’s WeChat (or Weixin), QQ, Soguo 搜狗, NetEase’s Youdao 有道 (education), NetEase Cloud Music, Yanxuan 严选, 163.com email etc, that still have big room to grow.
Sinopharm 1099 国药控股 – 18.9
I was trying to find a pharmacy company in China and spotted the state-owned Sinopharm. Price is less than half of its peak in of HKD43 in Apr 2018. The depressed price is partly due to the “central procurement and two invoice policy” to control excessive increase in price by the government as well as intensifying competition in the sector. Nonetheless, Sinopharm continue to record steadily rising revenue and earnings in the last 5 years, and I reckon that the long-term growing trend of pharmaceutical distribution industry in China will remain intact.
Pinduoduo PDD 拼多多 – 84.13
Still a loss-making tech company, Pinduoduo is the second-largest online marketplace in China by number of users and number of orders, behind Alibaba. What attracted me is not the company interactive E-commerce where you can make joint purchases with friends at ridiculously low product price. Instead it is the company’s foray into Agriculture Tech space, where it is educating farmers to use Smart Farming technology of sensors, automation, big data collection to optimise harvests, as well as to encourage farmers to sell direct to end-customers cutting middle-men distribution channels that created the huge mark-up of the initial cost.
Microsoft MFST – 207
Buying shares of Microsoft or company like Apple should be a no brainer for everyone who use their products almost every day, wherever you are, whether at home, at work, or during commuting. Unfortunately, I started investing with SG stocks only ten years ago, and only buy into these companies this year. Anyway, it is better late than never as I still believe in the potential of Microsoft at current pricing, especially its cloud related businesses have so much room to keep on growing. Even Microsoft at current ATH price, the valuation is still decent to me at forward PE of 29 compared to many other Tech stocks.
CapitaRetail China AU8U.SI – 1.16
Keppel BN4.SI – 5.18
Wanted to buy for trading prior to Temasek announcing not investing into Keppel this year. Regretted! Stupid choice because price dropped so much that I just hold on to it! Read: Did The Father (Temasek) Abandon the Son (Keppel)?
Fraser Centrepoint J69U.SI – 2.31
Always wanted to have a pie of FCT as a strong long-term dividend play in my SRS account, stemming from the resilience of Singapore heartland malls, but always did not find the right price of entry, until recently!
Gold O87 – 182
Hedge against stocks, and possibly depreciating USD.
Exxon Mobil XOM – 45.9
CVS Pharmacy CVS – 67.1
Baidu BIDU – 122.9
Tripadvisor TRIP – 22.4
SPH REIT – 0.86
STI ETF – 2.58
Sold XOM, CVS and Baidu at a small profit, before the price retreating some more recently. Quite lucky! Made very small losses in TRIP’s sale as I think the money is better spent on other stocks for now.
XOM and TRIP are my so-called unloved portfolio for future recovery of economy. Currently, I think these two stocks will take a while to recover, but I felt that both prices are depressed and there is a chance I may enter again if pricing is right.
For Baidu, I was talking to a “bro” who worked in China for close to two decades, and he highlighted some fundamental problems of Baidu and I decided to sell the stocks for a small profits for other better stocks.
For pharmacy stock, I found Sinopharm a better choice than CVS.
SPH REIT will not have much dividend to splash out in the near term and fundamental of retail malls in the region is quite dire in my opinion. For now, guess I should take profit and allocate the funds into other more efficient stocks.
STI ETF recently distributed its dividends. Together with the dividend and capital appreciation, I decided to take partial profits after my purchase in March.
I will update my Stock portfolio in my next post.
Rolf’s Updates – My Priorities in Life – Health, Finance, Family, Friends & Hobbies – 2020 2Q