Friday, September 28, 2007

28 September 2007

Update of stock portfolio at month end. STI had a good run over the last few days. Today it took little halt as we approach the quarter ending. S-shares ran wild this afternoon, apparently due to the following reason as reported by Merrill Lynch:

SGX listed China Stocks are running riot today - many of them rising by more than 10% - and here's the main reason why from Merrill Lynch:Yesterday, a 3rd QDII fund was approved. What was significant was that Jiashi Fund Management Co is the first QDII to be allowed to invest in Chinese companies (defined as having at least 50% of its revenues from China) listed on the SGX and in the US.

We saw what happened to the HK market when it was announced that QDII funds could invest in HK. The index is already up 32% from the sub-prime crisis lows even before a single QDII dollar has been invested. Real money of US$48bn is expected to flow in for 2008.

If 10% flows into the S shares, this translates to 12% of the US$40bn S-share market. The S shares have been underperforming even the STI, much less its H share peers.

Whilst the STI has hit a new high yesterday, the broad market has lagged. We feel that the time is now ripe for the S shares to perform.

Our picks are (taking into account size, liquidity, market leadership, valuation):Yangzijiang (YSJ), Cosco (COS ), Synear Foods (SYNF ), Midas (MIDAS), China Hongxing (CHHS), Yanlord (YLLG), China XLX (CXLX), China Energy (CEGY), China Sky (CSCF), Celestial (CENU), Sino Tech fibre (SINOT), Hongguo (HGUO), Beauty China (BCH).

Yangzijiang (YZJ SP) - 19x 08 PER
Guangzhou Shipyard Intl - 22.2x 08 PER,
Synear Foods - 17x 08 PER
China Mengniu (2319 HK) - 34x 08 PER
Tingyi Holdings (322 HK) - 35x 08 PER
Bright Diary Foods (1886 HK) - 60x 08 PER
Midas (MIDAS SP) - 21x 08 PER
Zhuzhou CSR Times Electric - 32x 08 PER
Zhuzhou Times New Materials Technology - 37x 08 PER
Jinxi Axle Co Ltd - 37x 08 PER
China Hongxing Sports (CHHS SP) - 20.6x 08 PER
China Sport International (CSPORTS SP) - 11.3x 08 PER
Li Ning (2331 HK) - 32x 08 PER
Anta Sports (2020 HK) - 31x 08 PER
Celestial (CENU SP) - 8x 08 PER
Vitasoy (0345 HK) - 14x 08 PER
Hongguo (HGUO) - 12.3x 08 PER
Belle Interntaional - 33x 08 PER

From the list, those which are in my portfolio did have a good run today and pushed the portfolio up, depite STI closing today in negative territory. Here is the update of the top 30 holdings:


1. CoscoCorp
2. ComfortDelGro
3. Semb Corp
4. OCBC Bk
5. SPH
6. CapitaComm
7. Int-Roller
8. FibreChem
9. Celestial
10. SPC
11. HG Metal
12. Food Junc
13. Raffles Edu
14. F & N
15. ChinaFlexP
16. MetroHldg
17. CitySpring
18. Hiap Moh
19. PanUnited
20. Pacific HC
21. MIDAS
22. Hartford
23. MacCookIReit
24. HTL Int
25. Aztech
26. Cambridge
27. SP AusNet
28. SAT Svcs
29. Sing Food
30. FrasersCT

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