Adsense 970

Second Chance Properties Ltd

I first entered this position in March 2013. The entry post was here.

Over this period, i received $340 worth of dividends.

The Company announced on 6 Feb that it is going to dispose the majority of its properties.

The announcement is here.

Since the main investment thesis of mine was to achieve a yield of 7%-8%, the divestment means that the original thesis is no longer valid as the Company will not be able to receive a stable income. There is also uncertainty in how the sale proceeds will be divested.

In this regard, i sold my position in Second Chance today. The return (including the yield) in IRR terms is around 18%.

Happy SRSing.

SRS Portfolio - 31 Jan 2014

Nothing much to report for Jan except the investment in China Environment which I have shared with you earlier. 

Received $170 dividend from 2nd Chance properties but i haven't had the time to analyze its latest decision to sell the majority of its portfolio of properties. That made my initial investment thesis no longer valid. I may divest this once I had a chance to read through its announcements. 

Happy SRSing. ^_^

China Environment

I mentioned about a S-Chip stock few weeks back. You know my dislike for S-Chip stocks including my previous misadventure in China Fishery Group.

Anyway, i decided to give this S-Chip another chance. ^_^

I went to Beijing early part of this week and i can tell you that you never appreciate good air quality until you don't have it. This is the view from Shangri-la overlooking the CCTV HQ from my hotel room and you can see the air is heavily polluted. I don't even dare to "breathe" heavily when i am walking outside.

The government of China has to clean up its act in the next 30 years as the air quality is really bad. As such, there present much opportunity in the environmental space to ensure clean air and water. 

Follow the smart money?

There are 2 companies in this space, United Envirotech and HanKore and both experienced strong upward price movement after the smart money came in.

China Environment

China Environment raised $17m from Havenport Asset Management at $0.55 per share back in Nov.

Havenport Asset Management was spun out from Legg Mason (i.e. the individuals were previously managing money for Legg Mason) and Legg Mason continues to engage Havenport to invest money on their behalf. I believe Havenport is to seek alpha from this investment and not to "churn" the investment.

Latest Quarterly Results

The Company released a strong set of Q3 results where net profit surged by 370%.

I believe the increase in profitability is sustainable as they have increased their capacity by 400%.

The outlook continue to be positive from this sector as pollution is increasingly a very serious issue and the government now has the funds in its coffers to tackle this problem head on.

Some of the SGX announcements for your reference:
2. Corporate Presentation Slides File 1 and 2

SRS portfolio

I bought 20 lots for my SRS account at $0.57 per share and saw it surged to $0.62 before dropping to the current price of $0.54 again. I believe 50c-55c is a strong support given that Havenport bought around 55c.

 I am hoping to see a 25% increase in share price in 1 year from now and 50% in 2 years. Let's see how the Q4 results pan out and the company is off to a good start in 2014.

Happy Greening