It’s been almost 3 years since the first COVID outbreak…that was also how long we’ve last had a meaningful get-together sessions with our top community members!
In this session, we announced the news of our recent merger with ShareInvestor Group, spoke about how we envision to help our community members grow and also caught up with old friends!
One of our top contributors and veteran community member, @ljunyuan – taking a wefie with our management team and friends!
It was a wonderful night of food, drinks and fun!
From day one, we’ve held true to our belief in giving back to our community. Ever since COVID first happened, we’ve not had such a big but cosy gathering – this time round, with additional new colleagues and new community members as well!
This post was originally posted here. The writer, Willie Keng is a veteran community member and blogger on InvestingNote, with a username known as @Willie and has close to 120 followers.
As far as I know about market rallies, my instinct tells me the rally will continue to go on.
I mean, money is flowing, people think we have seen the bottom.
Especially when you’re getting headlines like “Stocks Have Already Bottomed. How We know?”
The Dow has sneaked past the bear’s eyes.
And it’s already up 19%, from the bottom in earlier September. The S&P 500 is up 12% over the same period.
The Dow could possibly go back up past 36,000. The S&P 500 could possibly go back up past 4,000. But don’t take my word for it. I’m just plucking numbers from thin air.
I mean, what do I know about market predictions? I only (try to) collect great businesses.
What’s driving this bear market rally
First, in yesterday’s meeting, the Fed said they could slow down rate hikes (but more on that later), which is a good thing since this tells me actual inflation could have slowed down.
US mortgage rates have fallen, and other currencies are strengthening against the USD, which means capital is flowing back to emerging markets — or riskier assets.
I mean, the market can go from believing nothing will go wrong to believing that nothing will go right, in a flash. That’s Mr. Market. Well, at least that’s my reality of Mr. Market.
The kind of delusional optimism that will continue to push the rally on.
Or what it’s called – a sucker’s rally.
The same delusional optimism that a bold investor once said Tesla could reach $4,000 per shares in 2025.
Market cycles tend to average 33% down before they recover, some could take longer, some could be shorter – and we still have more room to go. There are still places where they have yet to sort things out.
The UK is still in some sort of recession — fighting inflation and dealing with their fiscal deficits.
China is still dancing along theput your one leg in, one leg outcovid policy. In the most recent news, Shanghai has asked new arrivals to stay from public places for five days, starting today.
That means, people going to the 26 million populous city are barred for close to a week, including restaurants, shopping malls, supermarkets and even internet cafes.
Then, the war in Ukraine still rages on.
But what’s crucial here, tech companies, being the broader part of the S&P 500 index, have shown stunning numbers of job cuts:
Meta Platforms: 11,000 layoffs
Snap: 1,200 layoffs
Twitter: slashed by half
Alphabet: plans for 10,000 job cuts
Amazon: plans for 10,000 job cuts
Also, Apple has also stopped hiring
The thing is, when global companies freeze headcounts and cut budgets, these big companies are just getting started. What about the small businesses that drive the bulk of economies?
When businesses project gloomy time ahead, they cut spending. For consumers?
Instead of buying that thirteenth fridge, perhaps you might stick to just one.
Or perhaps just grab dinner from the hawker stall downstairs, instead of dining at Haidilao.
Well, it’s what’s looming on the horizon that could catch almost everyone by surprise.
“Most Federal Reserve officials say slower rate hike pace appropriate ‘soon’”
That’s what I got from this morning’s paper.
I wouldn’t take this as a sign of renewed optimism. At the end, it’s not how fast or how slow interest rates go up.
And who knows, the Fed could have rates go beyond 5%, since rate hikes have toppled the yield curve to a shape that doesn’t make sense for any bond analyst.
When the yield curve inverts, this is a warning signal (see red circles):
‘Run Road’ (or in Chinese known as 跑路) is a layman term to describe the act of ‘dropping everything and just run away.’
This post was originally posted here. The writer, Jun Yuan Lim is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has close to 2000 followers.
This is the exact scenario happening in the stock market right now, where many dumped their stocks out of extreme fear (that a recession is coming and their stocks could potentially lose even more) and in so doing, ended up burning a BIG hole in their pockets.
Question: Is this a sensible thing to do, and more importantly, for those who are still holding on (to your stocks), should you also follow the crowd to dump everything and ‘run’?
In this post, you’ll find my analysis about the current situation, outlook ahead, and also what I would do (both as a long-term investor, as well as a short-term swing trader):
Founded since 1978, and currently with 273 stores in 36 states, Boot Barn Holdings Inc. (NYSE:BOOT) is currently United States’ largest lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories.
This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has close to 2000 followers.
Some of the brands (which Singaporeans are probably familiar with) you can find in the company’s retail and online stores include Carhartt, Dickies, Wrangler, and Timberland Pro.
In this post, you’ll learn about some of the key performances by the company over the past 8 years (between FY2014/15 and FY2021/22 – the company has a financial year ending every last Saturday of March), such as its financial performances and its debt profile. I’ll also be sharing whether or not the company’s current traded price is considered ‘cheap’ or ‘expensive’ based on its current vs. its 8-year valuation.
In 2020, we expanded our team and business in Malaysia. Since it was the beginning of the pandemic and our headquarters being in Singapore, we’ve only met most of our Malaysian team members virtually.
So, this is the first time both teams finally met in-person, after going through the many project developments and meetings over the last 2 years!
It was also a good opportunity to catch up with many of our Malaysian partners, prominent financial influencers and community members!
Key takeaways from the trip:
✅ Sincerity & groundwork are key pillars for building a sustainable community ✅ Understand the nuances of cultural differences – this increases communication chemistry ✅ Always find a good balance between work & fun!
Here’s a big thank you to our wonderful Malaysian teammates for hosting us for the week. Our team bonding activity at Genting was awesome!
This post was originally posted here. The writer, Teoh Tian Heng is a veteran community member and blogger on InvestingNote, with a username known as @thteoh58.
Dear investors, if you are reading the article, that means that you surely are not settling with a mere 10% to 15% rate of return per annum for your investments. I mean, who does?
Anyway, the article today will show you a qualitative and quantitative study on the business of TECFAST as well as the finances, as to how this company could be almost guaranteed to deliver a MINIMAL of 60% upside.
TECFAST (or the “Company”) had an elaborate plan as to what, and when to venture into the oil and gas business. Dated 6th November 2020, we noticed that there is an LOI between Fast Energy Sdn Bhd (“FESB”), a wholly owned subsidiary of TECFAST and Zillion Oil Timor LDA. This marks the very beginning of journey for TECFAST to enjoy the recovery of busy offshore activities as well as the recovering oil price.
However, the LOI does not show any materialized information. It was until 15th March 2021 that the Company starts to deliver on what they promised.
Dated 15th March 2021, the Company had entered into a supply agreement between FESB and Wise Marine Pte Ltd (“Wise Marine”) – one of the largest ship management services players in Singapore, with a total contract value of RM2,222,856,000.00. With this size of a contract, it is normal for investor to treat it as some “not realistic”. Hence, the reflect in share price upon the announcement.
A deeper study into a contract would note that FESB would supply up to 30,000 metric tonnes of low sulphur fuel oil, low sulphur marine gasoil and high sulphur fuel oil per month to Wise Marine. The marine gasoil or fuel oil are collectively known as Marine Gas Oil (“MGO”). MGO are mainly used to power offshore transportation vehicles, such as oil tank, vessels, bunker ship and so forth. It is also interesting to point out that whatever FESB was selling to Wise Marine are based on a certain premium on top of the costs, are more commonly known as the “Cost-Plus” basis. This does not mean that FESB will never suffer losses, but as long as MGO prices are stable or on an uptrend, TECFAST as the holding company, would be the beneficiary of it.
A reference on Singapore Mogas 95 Unleaded Futures could see that since July 2020, the prices of MGOs are increasing on a steadfast trend.
Koda – Clear beneficiary of the surge in home furnishing spending trend (1 Jun 21)
This post was originally posted here. The writer, Ernest Lim is a veteran community member and blogger on InvestingNote, with a username known as @el15 and has 500+ followers.
Since 20 Aug 2020, Avarga has more than doubled from $0.146 to close $0.305 on 1 Jun 2021. Avarga’s strength is likely attributed to its 69.7% stake in Taiga (Taiga is Canada’s largest wholesale distributor of building materials, such as lumber, panels, doors, engineered wood, roofing and others). Taiga’s business has been flourishing due to the strength in home furnishings and the housing market in Canada and US.
By extension, Koda may be another proxy to benefit from the surge in home furnishing spending trend. It is noteworthy that Koda is an Original Design Manufacturer / Original Equipment Manufacturer to its customers in North America. In fact, customers in the North America region constitute approximately 55% of its FY20 revenue. Its forte is in home furniture, and it is possibly the largest dining room furniture exporter in Southeast Asia. Home furnishing seems to be in demand as consumers stay at home and have more disposable income to spend (rather than travel) to improve their homes.
In fact, Koda’s 1HFY21 revenue and net profit jump 16% to US$39.6m and US$4.8m respectively on good demand for furniture.
Given this promising backdrop, it may be timely to take a closer look into Koda. I have the privilege of meeting Mr Joshua Koh, CEO of Commune Lifestyle Pte Ltd and Mr Kenny Zhang, CFO of Koda (“Management”) for a 1-1 discussion over Koda / Commune’s operations and prospects via Zoom. The below is my personal interpretation of my discussion with Koda’s management and my own inferences from Koda’s announcements on SGX.
Koda’s & Commune’s background
Koda was established in 1972 by Mr Koh Teng Kwee. It started by producing wooden TV and speaker cabinets. Since its inception, Koda has progressed from being an Original Equipment Manufacturer (OEM) to an Original Design Manufacturer (ODM). Its forte is in home furniture, and it is possibly the largest dining room furniture exporter in Southeast Asia.
Besides its ODM business, Koda established Commune Lifestyle Pte Ltd in 2011. This is their in-house brand and managed by the 3rd generation of the founding Koh family. Commune has presence in Singapore, Malaysia, China, Philippines, and Hong Kong. Readers can refer to the respective websites for more information on Koda (click HERE) and Commune (click HERE).
Koda has been listed on SGX since 18 Jan 2002.
What is so interesting about Koda?
Outlook continues to be bright
Based on 1HFY21 results (financial year ends in June), management continues to see encouraging growth in their export orders and they expect the capacity utilisation rates for our key factories to remain consistently optimal. This is attributed to generally higher demand for furniture arising from work-from-home arrangements.
Their recent proposed acquisition of Land Use Right and a factory building in Long An Province, Vietnam (see announcement dated 25 Mar 2021) to expand their production capacity corroborates the positive momentum that they are seeing in their business.
Margins are likely to be steady amid strong demand
Notwithstanding the rise in costs from timber, fabric, metal frame, foam, and shipping etc, Koda believes that they should be able to maintain their current gross profit margins (“GPM”) of around 30 – 32%. This is because firstly it can pass on such costs to the customers amid strong demand. Secondly, their Commune business has GPM of around 50%. As this segment grows and becomes more significant, it may even be able to raise its overall GPM to above 30 – 32%.