SRS Portfolio 11 March 2023 + Demise of SVB

SRS Portfolio as of 11 March 2023

Since my last update, the SRS Portfolio received $995 of distributions from Suntec REIT. Other than that, the portfolio declined in tandem with the market and the bombshell came from AEM Holdings.  

AEM Holdings

The Group announced the highest annual revenue at $870.5m and profit before tax of $158.7m. The EPS was Singapore 40.7 cents, representing a 29% y-o-y increase from FY 2021. The Group proposed a final dividend of 3.6 Singapore cents for the year end (interim is 6.7 Singapore cents). Based on my shareholdings of 12,000 shares, the final dividend is around $432 and will be paid out on 31 May 2023. 

The "shocker" is probably the target revenue guidance for FY 2023 of $500m, which is substantially lower than FY2022 of $870.5m. You can see from the table below that the 2H 2022 was struggling against the same period last year. If you look at the investor presentation (slide 5), the decline quarter on quarter is pretty stark. 

My own view is that its businesses will be impacted by the current US and China tensions over intellectual property in the high tech sector, especially on semiconductor. I will keep a close watch on AEM.

Daiwa House Logistic Trust

DHLT announced the financial results for FP2022 with a few positives - 100% lease renewal with positive 3% rental revision, occupancy rate remained high at 98.6% and its borrowings are on fixed rates with leverage at around 36%. The portfolio value declined due to weak SGDJPY rate.

The DPU is 2.61 cents and will be paid on 30 March 2023. Based on my shareholdings of 50,000, the dividend will be $1,305. 

UMS Holdings

UMS also announced a record performance for FY2022 where revenue hits $372m and net profit was $102m. The Company announced a tax exempt dividend fo 2 cents per share to reward shareholders. Based on my shareholding of 35,000, the dividend will be $700 and it will be paid out on 22 May 2023.

Demise of SVB

In case you haven't been following, in this time and age, there is a twitter-led run on bank and Silicon Valley Bank went belly up.

SVB has been supporting start ups in the Valley for a long time. During the boomtown years of 2020 and 2021, many companies in the bay area raised a lot of money and deposited cash into the bank.

While waiting to deploy the cash, SVB put the money into long duration T-bills and bonds. When interest rates started to rise, the T-bills and bonds were marked to market at a loss and that created a big financial hole which SVB couldn't plug. It announced a capital raising program after realising some of the losses from these holdings and that led to a lack of confidence crisis. 

It was made worse when Peter Thiel from Founders Fund was telling their portfolio companies to move cash out of SVB and the news probably spread like wild fire, causing a run on the bank and the share price crashed in 1 day, leading to its demise. 

The repercussions are not fully appreciated yet and the FDIC has taken over the bank. Everyone now is waiting anxiously on how these may pan out as despoits above USD 250,000 are not insured. 

The demise of SVB will cause market volatilties in the coming weeks, so brace tight everyone...