Quarterly Results Review - 2016Q4

Frasers Centrepoint Trust	DPU is maintained despite the fall in revenue due to corresponding fall in expenses. Northpoint revenue down 25% dude to ongoing AEI. Slight increase in debt due to acquisition of Yishun 10 retail podium. Occupancy is stable at its 2 jewels, but show signs of decreasing at the smaller malls - especially Bedok Point. It 's amazing they are still getting positive rental revision (+6.9%) in the current retail climate, proving just how resilient their malls are. NAV is $1.93 and I expect full year DPU of 11.7c. At current price, yield is 5.9%.
Super Group	Awaiting takeover at $1.3. Expected to cash out in April.
Sembcorp Industries	Full year dividend has fallen to 8c, a far cry from the >16c when I first got vested. Utilities is stable and net profit would be up 4% excluding one-time items. Marine is finally back in (slight) black after taking huge write-downs last year. This is really one of the better quarterly results in a long time. Full year EPS is 19.9 (I expected 19c worst case) and DPS is 8c (I expected 10c). Their payout ratio dropped from ~50% to 40%, signifying they are preserving cash. Management guided a challenging 2017, but I believe the worst is over for Sembcorp.
M1	Profits for the year fell 16.1% mainly due to lower international call, roaming (even I cancelled this) and increased depreciation of 4G network assets. Only saving grace is their fibre, postpaid and prepaid customers are still growing. This comes at a cost of ARPU as they really "offer gao gao". Even I switched to M1 Fibre. Full Year DPU is 12.9 cents (down from 15.3), and EPS is 16.1 (down from 19.0). Yield at price of $2 is 6.45%. Management guided challenging environment, and growth in other "business areas" (IOT, data analytics) as they always do. I might consider averaging down if it comes down to 7% yield.
Capital Commercial Trust	Surprising Q4 results with a 10% increase in DPU due to full acquisition of CapitaGreen, resulting in full year DPU of 9.08c. Management expects slight negative rental revision in the future, but this is already well known. 80% fixed interest debts with AEI of Golden Shoe as its main growth catalyst going forward. At $1.57, this is yielding 5.8%. Holding for the long term.
Accordia Golf Trust	DPU fell from 2.16 to 2.09 (3.2% lower) due to slightly lower revenue ("warmer winters") and higher expenses. While they claim it's due to weather, profits does seem to be gradually trending down. I have to observe this for a few more months but thankfully, the yield is consider high. Price to book is 0.68 (book value: 0.93). I'm expecting yearly dividend of 4.8c which yields around 6.8% at current price of $0.7. This is a fall from the 7.4% expectation previously.
ST Engineering	Much better than expected results with a surprisingly strong Q4. I am looking to get back if the chance arises.
Singtel	Showed resilliant results (net profit up 2%) when its peers are down in doldrums (both M1 and Starhub down 30 %). Nothing much to say except I'm confident. Looking forward to Netlink IPO later this year.
Frasers Centrepoint Ltd	Really surprising results with net profits up 90% due to profit recognition from Suzhou, China and Singapore. FCL currently has about 46%, 33%, 9% and 7% assets in Singapore, Australia, China and Europe respective - and they are looking to increase investments in overseas assets for long term growth. It's a good diversification from SG for me. 70% of the assets and 50% of net profits are from recurring sources (i.e REITs), which provides a good "baseline" of dividends. Despite the relatively high level of debt, I am quite confident in its management. Dividends has been maintained at 8.6c for the past 3 years (5.8% yield at $1.495, very high for a property developer).
Straits Times Index	Distributions actually went up to 53c! This was a huge surprise given the drop to 42c previously.

3 Meanings For The Same Word!

I'm obsessed with this song recently.

It's a really simple and sweet love song that can put a smile on your face.

It's brilliantly written - and it also reminds me why I love the Chinese Language so much.

1. 小心 肝 = Be Careful (Take Care) of Liver
2. 小 心肝 = Small Heart & Liver
3. 小心肝 = Little Baby/Honey

Liang Wen Fu taught me 语带双关.

This song taught me "语带三关".

End The Comparison Game

I just want to jot down this awesome article from 4th Pillar, a financial blog I've been following because it resonates so much with me.

If you're chasing after Financial Freedom to impress others, you've got it all wrong.

Contrary to popular belief, FF is never about comparing. Maybe when we were younger, we tend to believe that. 

We buy the latest iPhones and gadgets not so much because we use the features, but because of the "emotional reward" of "impressing others". The same for buying a bigger car, a bigger house, a luxurious vacation to post online, etc...

As you grow older, you'll realized the cruel/fortunate fact - No one cares.

No one is keep tab on what phone you're using, what car you're driving, how much you're making, etc... No one has the effort to do that. No one except yourself.

"Making purchases for the sake of impressing others is a never-ending process. There will always be someone who has a bigger, better, shinier new consumer item than you and the only way to compete with them is to buy, buy, buy.

There is no one to impress. There is no one to compete with."

This might be the secret towards not just financial freedom, but true freedom.

Financial Literacy - Chinese New Year Conversations

Over the CNY, I've had conversations with some relatives about the importance of saving for the future and on the topic of insurance.

On investments, the old generations (especially those who were burnt before) are still full of distrust and fear. They told me to "never invest in stocks and bonds because it's dangerous". Even when I tell them about Singapore Saving Bonds (SSB), which are guaranteed by the Government, they tell me "Bonds are just dangerous. It might collapsed."

I really don't know want to laugh or cry. They even believe their insurance policies are safer than SSB.

I don't know how to explain to them that if the SSB does default, your insurance companies would have long gone bankrupt and your entire bank savings and Singapore Currency (SGD) will be worthless.

They still equate "investing" to "gambling" - trying to time the market, buy penny stocks, etc... They had a look of disbelief when I tell them I almost never sell my stocks - even after they have gone up a lot.

What? Buy and hold forever? What kind of sorcery is this?

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Fueled by the lack of internet/financial education in their days, and of course gospels spread by insurance companies and agents, this led to the older generation becoming overly dependent on insurance.

This belief is so deeply entrenched (根深蒂固) that they believe insurance is the safest and best form of saving. They can pour their entire life savings (and retirement hope) into life plans, endowment plans, etc...

They are extremely skeptical of other form of investments. In fact, just the word "investment" turn them away. I think it's no longer possible to convinced these people otherwise.

I'm not saying insurance is not important, but it just isn't an optimal way of saving.

You use a hammer to hit a nail, and you use an axe to chop a tree. There's an appropriate tool for a job. And Insurance is a protection tool, not a wealth accumulation tool.

You need to diversify your wealth - For protection, for emergency, for capital expenditures, for wealth growth, across a wide variety of assets. I doubt their 20 year-old fresh graduates sons and daughters doing insurance know all these (90% of these "financial consultants" are equally clueless, the remaining 10% just want to sell insurance for their own commissions).

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In the end, I know I'm just grumbling to myself here. It's hard to convinced them.

Argue further and you will be seen as rude, or they will give you the "I eat salt more than you eat rice, what do you know" look.

Anyway...

This is really "inspiring me" to write a beginner series to consolidate the main points on financial literacy.