On 15/1/18, I added to my stake in AEM Holdings at $3.27 and Nordic Group at $0.57. AEM has been my biggest winner so far, with my initial purchase at a ex-rights price of $0.58. I sold the bulk of my stake at $2.63, but decided to increase my position again due to its strengthening fundamentals. This experience really goes to show how a stock can keep on rising as long as its business keeps growing stronger. The recent sharp jump in its stock price has made its valuations less attractive, but I’m still looking at accumulating more of AEM in the future. Hopefully, there will be an opportunity to do so at a more attractive price. In the same manner, I hope to continue increasing my stake in Nordic at attractive valuations, as I feel it is a very well-run business in the hands of Chang Yeh Hong.
On 19/2/18, I purchased a stake in China Sunsine at $1.25. I feel China Sunsine has a competitive advantage in the rubber accelerator space, where it is the world’s largest producer. Its competitive advantage stems from its ability to adhere to China’s environmental regulations, something which its competitors have been found flouting. This has resulted in a closure of their factories which has seen supply tightening and subsequently a rise in the prices of rubber accelerators – a chemical needed in the making of tyres. As a result, China Sunsine has seen its sales and profits increase significantly this year. As compared to its nearest rivals, China Sunsine is trading at a discount despite having greater revenues and being more profitable. I believe the stock can continue to re-rate as it expands through the adding of more production lines. At my purchase price, it is trading at a ex-cash FY17 PE of ~7 and a dividend yield of 2.4%. A lot of information regarding the company can be found online. Although my scepticism regarding S-chips has largely stopped me from investing in them (after China Minzhong), China Sunsine is my first exception. I will be watching this space closely in the coming few quarters.
On 9/1/18, I sold off my shares in AP Oil at $0.26, giving me a a loss of 1.99%, with dividends included. I sold it because I wanted to raise funds to focus on my better ideas – a goal which I set out for myself to do this year. Moreover, AP Oil is a value stock that requires time for the market to recognise its undervaluation. In this regard, I found myself more suited to value growth investing where I focus more on the company’s economic moat and management’s capabilities as compared to the traditional cigar-butt investing.
On 16/1/18, I also sold off my stake in Memtech International at $1.20, giving me a gain of 22.9%. Similar to AP Oil, I wanted to raise funds to focus on my conviction picks and I didn’t have as much information as I had with regards to AEM. On hindsight though, I missed out on alot more gains, as Memtech surged shortly after my sale to $1.85 as of 18/3/18. Hindsight is always 20/20, and I will have to be content with my gains instead of mulling over my potential profits. On 20/2/18, I also sold off all my shares in Best World at $1.3, pocketing me a gain of 32.02%, dividends included. I sold it off because I felt that its Taiwan business was deteriorating, which turned out to be true, but its China business more than made up for its drop, resulting in its share price surging to $1.82 as of 18/3/18. Both my stakes in Memtech and Best World would have been one-baggers if I had held on just a little longer. Nevertheless, I treat it as an experience or rather an opportunity to be responsible for my own decision-making as I felt there were legitimate reasons for my sell transactions. On the same day, I sold off my stake in ISEC Healthcare at $0.325, giving me a loss of 1.13%, dividends included. I sold it off for the same reasons as AP Oil and Memtech.
* From the sales proceeds, I followed up my purchase in AEM on 20/2/18 at $5.56, on 23/2/18 at $6.35, in Nordic Group on 20/2/18 at $0.585, and in China Sunsine on 27/2/18 at $1.26. Currently, all the three companies occupy the top three largest positions in my portfolio.
Disclaimer: The author owns shares in the abovementioned company. The ideas expressed in this blog should not be construed as an enticement to buy or sell the securities, commodities or assets mentioned. The accuracy or completeness of the information provided cannot be guaranteed. Readers should carry out independent verification of information provided. No warranty whatsoever is given and no liability whatsoever is accepted for any loss howsoever arising whether directly or indirectly as a result of actions taken based on ideas and information found in this blog.