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Showing posts from April, 2007

Nothing to post

I guess I have nothing to post for this weekend. I see that people are posting their portfolio in channelnewasia. Maybe I will do the same here. My portfolio is as followed:

C&O
China Preci
SP Chem
Techcomp
Shanghai Asia
China Printing
Jardine Strategic
Global Test

In value terms, it is just a small and poor portfolio. That's all, it is a short post this weekend.

Which is more undervalued: Jardine Strategic or Jardine Matheson?

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I have bought into Jardine Strategic (JSH) this week. In my opinion, I think that JSH is undervalued as it trades at around 70% of its end 2006 market net asset value (MNav). I define MNav at valuing the company’s net asset at market value. This opinion has been addressed in my previous post.

In this post, I will attempt to illustrate another opinion. That is, I think JSH is more undervalued than Jardine Matheson (JMH). In my previous post, I have stated that JMH and JSH have cross-holdings in one another. JMH owns 80% of JSH and JSH owns 53% of JMH. After I has attempted to remove the cross-holdings, I find that JMH’s annual report uses the net number of shares after accounting for cross-holdings to compute its Nav and EPS (earnings per share).

The table below shows my finding on MNav of JSH and JMH. My finding show that JSH may be trading at a discount of 30% to its MNav, while JMH trades at a discount of 5% to its MNav. Again, this finding may be wrong as there are some assumptions b…

What is the true NAV for Jardine Strategic?

Looking on page 5 of its 2006 Annual Report, Jardine Startegic (JSH) at US$13.40 may be trading at 70% of its net asset value (NAV) of US$19.38, which is calculated based on market price of its holdings and excluding 455 million shares held by Jardine Matheson (JMH).

JSH excludes JMH's 455m shares due to cross holdings. JMH owns 80% of JSH and JSH owns 53% of JMH. JSH has a total of 1072m shares. As such, JSH effectively owns the 455 shares out of the JMH's 858m shares in JSH, which may mean that there are effectively 617m shares, instead of the 1072m shares on paper.

If we use the full 1072m shares to compute JSH's NAV, the undervaluation disappears as the NAV will then be at around US$11.15 per share using the figures in its 2006 AR.

JSH owns, besides 53% of JMH (note: JMH owns 80% of JSH),
- 64% of Jar C&C
- 78% of Diary farm
- 74% of Mandarin Oriental
- 47% of HongKong Land (HK Lands owns 70+% of MCL Land and is also one of the three partners for Marina Biz Fin Centre and…

Pain from Investing Process

I have mentioned that investing (or more precisely, DIY investing) is a painful process to me. I shall elaborate on why investing is painful in this post. However, I shall start with what I enjoy about investing.

I do enjoy certain aspect of investing. I enjoy the ideas generation and the merging of ideas in investing. For example, you will encounter the idea of expected value in statistics. Simply put, expect value is the sum of the multiples between the probabilities and its outcomes

Expected value is quite dry to me in terms of statistics until I see it taking place in the field of stocks investment. In stock investment, your expected returns on a stock can then be derived in a similar manner, by taking the sum of subjective probabilities multiplied by the respective outcomes. If one invests using value-investing approach, one is basically buying below stocks at prices below one’s subjective expected value of a stock.

Why is investing painful? One, it is painful because investing, whe…

Short Review on my Disposed and Added positions in March Correction

The market has recovered and soared since the March correction. Perhaps it is a good time for me to look at the positions I have disposed or added during the March correction.

During the late February and early March, I have disposed two positions, CG Tech at around 0.71 and Sunray at around 0.22. CG Tech is quite profitable to me as I have last bought it at late 2006. Sunray is a loss for me as my average price is around 0.27.

At that period, I have also added three new positions. They are China Precision, Techcomp and Orchard Parade. I have discussed Orchard Parade in my earlier post.

So far, all these three new positions are profitable and I have not cut down on any of my positions in these three stocks. Techcomp was more of an undiscovered stock when I bought it, so it may be luck that its price has reached 0.40 in around a month.

China Precision was a stock that I have bought much earlier at 0.40 and sold it at a slight loss before its poor 2006 FY announcement. Thus I have been foll…