Semb Marine 1st Half Results - Net Profits Down 15%!

2nd quarter earnings were down 17% and 1st half earnings were down 15%, I think this is pretty much expected as we already saw keppel corp drop 25% in earnings from its marine segment.

A 4 cents mid year dividends were declared, slightly lower as compared to the 5 cents paid last year. I think its parent semb corp would pay lower dividends this year too.

SMM paid 5 cents and 8 cents in the last 2 years, given the weakness... I'm expecting 4 cents and 6 cents for a total of 10 cents this year.

SCI paid 5 cents and  11 cents last year for a total of 16 cents in FY14, I'm expecting just 12-14 cents in total for FY15.

Looking at the trend... we might see only 400 to 500 mil in profits for the year 2015, so looking forward I'm expecting full year net profits to be down around 20%. The weakness could continue into 2016 before recovering in 2017. Shareholders of SMM and SCI will have to take a long term view.

You can either hold and ride out the downtrend, or cut loss and quickly move on.

Rigbuilding segment saw the biggest decline, this is because of the weak oil prices leading to less interest to increase capacity for drilling oil.

Contract wins for 2015 was very weak, with only 1.3bil worth of new contracts. I'm expecting just 2 billions worth of contracts for full year 2015 and maybe 3 billion going into 2016. This is much lower as compared to the 4bil each seen over the past 2 years.

Net Order Book is in a steep down trend, which is not a good sign... I think over the next 3 years we might see it bottoming towards a more normalized range of maybe 6-8 billion.

NamePrice WeightagePEYieldPayout RatioIndustry
ARA1.7215%16.52.9%48%Property Management
CapitaCommercial Trust1.4616%17.05.9%100%Commercial Reit
OCBC10.3415%11.53.5%40%Banking & Finance
Sembcorp Industries3.755%12.53.2%40%Marine & Utilities
ST Engineering3.329%19.74.5%89%Engineering
UOB22.9516%11.63.3%38%Banking & Finance

Total WeightPortfolio PEPortfolio YieldPayout Ratio


Note*** PE and Yield are based on my own estimates and may not be accurate

CCT 1st Half Results

DPU growth for Q2 was soft, with an increase of only 0.5%. DPU is up 2.1% over the first half of 2015 which seems to have been reflected in CCT's weak stock price.

The 4.31 cents mid year payout represents a yield of 2.9% based on the closing price of 1.47, if they can at least maintain this level with a bit of growth we could see a full year yield of close to 6%.

CapitaGreen is now 80% rented and is likely to reach 100% by year end.

Gearing still remains low at under 30%, however I do expect CCT to buyout the remaining CapitaGreen 60% stakes in either late 2016 or 2017 and their debt headroom will be sufficient.

After 4 straight quarters of strong rental growth, the office market is starting to show weakness with a 0.9% decline. With a huge supply of office assets flooding in from 2016 onwards, I do expect this trend to continue for a while but the decline should likely be moderate.

The biggest reason why I continue to hold CCT is due to their solid track record. I do hope for full year DPU to come in around 8.6 to 8.7 cents, a slight increase from last year's 8.46 cents. Anything above that would be great.


NamePrice WeightagePEYieldPayout RatioIndustry
ARA1.7716%16.92.8%48%Property Management
CapitaCommercial Trust1.4916%17.35.8%100%Commercial Reit
OCBC10.4515%11.63.4%40%Banking & Finance
Sembcorp Industries3.905%13.03.1%40%Marine & Utilities
ST Engineering3.399%20.24.4%89%Engineering
UOB23.5016%11.93.2%38%Banking & Finance

Total WeightPortfolio PEPortfolio YieldPayout Ratio


Keppel Corp Q2 Results - Net Profit Down 2%

Keppel Corp's stock price is down 25% over the last 12 months and is showing signs of a bottom.
Year to date, shares of Keppel Corp have fallen 7.8% to $8.16.

Net profit was only down 2% for Q2, despite all the negative worries from the oil bear and slow down in contract wins. I think the results are pretty respectable despite weakness in its offshore and marine business which saw 25% fall in net profits.

I guess the full take over of keppel land was a brilliant and timely move, as the property segment help propped overall earnings up.

Their current order book stands at around 11 billion which could help keep their yards busy till 2020 and also support near term earnings, especially for FY15 and FY16.

On the downside, net gearing is now at a much riskier level of 42%. I do hope management would not gear above 50%, which can be very painfully when interest rates move upwards... sending debt costs much higher.

The mid year dividend of 12 cents is pretty decent, which was the same amount for last year and close to a 1.5% yield. I do expect their full FY15 payout to be the same or slightly lower than FY14.

In FY14 they paid out 12 cents + 36 cents for a total of 48 cents,
for FY15 I'm expecting at least 12 cents + 30 cents for a total of 42 cents.

I currently do not hold any keppel corp shares, as I previously bought it at 8.20 (after FY14 results) and sold off before the XD at 9.00 and 9.30 to lock in a decent gain for the year. However given the decent results, I may consider taking up a position again if it comes near the $8.00 level.


NamePrice WeightagePEYieldPayout RatioIndustry
ARA1.7716%16.92.8%48%Property Management
CapitaCommercial Trust1.4713%16.35.8%94%Commercial Reit
OCBC10.4215%11.63.5%40%Banking & Finance
Sembcorp Industries3.895%13.03.1%40%Marine & Utilities
ST Engineering3.379%20.04.5%89%Engineering
UOB23.4216%11.93.2%38%Banking & Finance

Total WeightPortfolio PEPortfolio YieldPayout Ratio


M1 First Half 2015 Results

A decent and expected set of results, as net profits were up 3.8% for the first half but flat for the quarter. A mid year dividend pay out of 7 cents, which is comparable to previous years.

Earnings per share grew by 3% as management guided for moderate earnings growth this year, my guess is around 3-5% for full year 15. On the downside, gearing increased to 80% which I hope it doesn't go any higher.

M1's strategy of a low cost operator for the fibre broadband market seems to be picking up well as seen from the uptrend (orange chart). I'm currently still sticking to my M1 fibre plan which costs only $39 per month ^_^


M1 sees 2Q earnings inch up 1% to $44.3 million on higher handset sales

SINGAPORE (July 20): M1 Limited, Singapore's smallest telco operator, has reported a 1% rise in 2Q earnings of $44.3 million for the 2Q ended June compared $43.9 million a year ago.
Operating revenue rose 15.5% to $276.8 million from $239.7 million due to higher handset sales.
As at June 30, 2015, its customer base stood at 1,997,000, 4.8% lower than last year’s. Market share was 23.1% at end April 2015.
Overall, the telco says data revenue continued to grow, with data usage shifting from data-only plans to smartphone plans.
Average smartphone data usage increased to 2.9GB per month in 2Q from 2.8GB per month a year ago.
For the half year, earnings increased 3.8% to $90.0 million, on the back of service revenue of $408.6 million.
M1’s board of directors has declared an interim dividend of 7.0 cents per share.
Based on current economic outlook, M1 expects moderate growth in net profit after tax for FY ended Dec 2015.
M1 closed 3 cents lower at $3.23 today. Year to date, the stock has fallen 10.53%.

NamePrice WeightagePEYieldPayout RatioIndustry
ARA1.7516%16.72.9%48%Property Management
CapitaCommercial Trust1.5014%16.75.7%94%Commercial Reit
OCBC10.4015%11.63.5%40%Banking & Finance
Sembcorp Industries3.895%13.03.1%40%Marine & Utilities
ST Engineering3.419%20.34.4%89%Engineering
UOB23.3916%11.93.2%38%Banking & Finance

Total WeightPortfolio PEPortfolio YieldPayout Ratio


Portfolio Update - Added HSI (2800) and SCI

I think last year I wrote about how cheap the hang seng index and china market was, I ended up making 10% returns each on 2800 and 2828. After exiting my position, I could only watch with envy as the china market more than doubled.

Recently the China market got hit by the bear and fell over 30% from its peak, while the HSI fell from 28k levels to the current 25k levels. Valuations wise the SSE is trading at around 14 times earnings which could be fairly price, whereas the HSI looked cheap to me at 10 times earnings along with a 3.6% dividend yield, so I took this opportunity to add back the 2800 ETF.

Semb marine won a 1 bil contract, so that's a big sign of things slowly picking back up. I previously mentioned that I exited my full position at 4.38, so I felt that now was a good price to slowly get back in. The potential catalyst are

- more contract wins
- earnings improvement from overseas power plants
- booking of sale of UK assets in Q2

We will be going into Q2 earnings seasons, and I shall update with the latest results soon.

SCI weight-age has been increased from 2% to 5%
ETFs like 2800 and STI ETF are not included into the portfolio shown

NamePrice WeightagePEYieldPayout RatioIndustry
ARA1.7216%16.52.9%48%Property Management
CapitaCommercial Trust1.5114%16.85.6%94%Commercial Reit
OCBC10.1915%11.33.5%40%Banking & Finance
Sembcorp Industries3.885%12.93.1%40%Marine & Utilities
ST Engineering3.399%20.24.4%89%Engineering
UOB23.1416%11.73.2%38%Banking & Finance

Total WeightPortfolio PEPortfolio YieldPayout Ratio