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- - Portfolio Transactions (June 2021)

Updates for my Portfolio for June 2021

For my side project, I am going to rerun some upscaling validation studies again with controls, another variable that it brings in is the equipment being used, which means more controls are needed. Not to mention seems like more and more people have the similar ideas as me, which is worrying I guess.
  • Applied Mapletree Industrial Rights
    • Reasons
      • Just added a small amount to round my odd lots to a nicer number.
  • Buy Hi-Sun Technology at 1.41
    • Reasons
      • Hi-Sun is is an incubator of highly successful businesses spanning across the growing fintech space, merchant acquiring, payment processing, POS hardware device manufacturing, chipmaking as well as enterprise cloud communication.
      • Since its listing in 2001 in Hong Kong, Hi Sun’s book value per share has compounded at a very attractive rate using its internally generated capital and without ANY share issuance.
      • Some notable stuff
        • 33.3% ownership in PAX Global (HK:327). One of the world’s Top 3 providers of electronic POS payment devices. COVID-19 helped with the adoption of cashless payments and increased demand for their POS terminals. The business has grown successfully into many global regions (particularly Brazil in LatAm) via its distributor network and even now in the U.K., which is one of their growth markets.
        • 63% fully diluted ownership in VBill. VBill is a third-party omni-channel (swipe card, bank card, contactless, QR code) payment processing or merchant acquiring fintech business in China. The basic business model is processing transactions for a small fee to mostly offline shops, merchants and street vendors. In 2020 VBill had 3.3m active merchants processing 1.28bn transactions of which most are now QR code e-wallet based. That being said, VBill has been hit by COVID-19 as offline consumer spending as declined, offline consumer spending in China is observed normalising though.
        • 17% fully diluted ownership in Cloopen (US: RAAS). The largest enterprise cloud communication businesses in China, called the "Twilio of China", though it doesn't seem to be as strong as its competitors, so do watch out.
        • 66% fully diluted ownership in Megahunt. Hi Sun incubated this small POS terminal chipmaking business following its usual pattern of incubating, developing, and eventually monetising. Chipmaking stocks are very hot in China at the moment as the government prioritises growing its domestic chipmaking industry.
        • RMB4.6bn of consolidated cash and no debt. Currently HK$3.5bn cash sits in VBill, of which HK$0.7bn is EQT’s investment sitting ‘offshore’. The remaining HK$2.8bn is onshore in China, of which HK$1.5bn is earmarked for the new supply chain business within VBill. The rest, around HK$1.3bn, is being used as a cushion for traditional payment processing operations and for possible M&A and business development.
      • Estimate of SOTP is about 4.32, current price assumes you give negative value to all Hi Sun’s subsidiaries

  • Sell Manulife US REIT at 0.795
    • Reasons
      • I am trying to consolidate my portfolio and reduce positions, MUST is a small position.
      • Ran out of cash for more attractive purchases so I just took some minor profits and switched. It is a pity to see that 8%+ yield gone.
      • Unsure about what is the new office norm of WFH and MUST is underperforming compared to Kep Pacific Oak and US Prime REITs too.
      • Given the current state of my portfolio, my US exposure is really big too, so figured reducing it would help.

  • Sell Bank of China (HK) at 26.4
    • Reasons
      • I ran out of cash for more attractive purchases so I just took some minor profits and switched. It is a pity to see that 7% yield gone.
      • I personally feel that the pandemic has hit the regional economies harder than I like, and the recovery would be really long, let alone a boom.
      • Similar to MUST above, I am trying to consolidate my portfolio and reduce positions, BOC HK is a small position too.
      • That being said, I do wonder if UOB was a better purchase than BOC HK though.
  • Buy Tencent at 575
    • Reasons
      • Adding my 2nd tranche of Tencent which is about slightly less than 31 PE which is close to a 10 year low.
      • That being said, the share price now has plunged a bit further meh.

That's all for my money for now.

The Chinese tech have been dipping recently and looking very attractive, hope I don't run out of cash.

I have place a small % of my net worth in crypto-assets.

Conclusion

My portfolio YTD is now ~21.20%, with the long term XIRR at 5.36%, vastly underperforming VT long term, at least it is picking up.



My cash position is currently at about 10%. Probably keep an eye out for opportunities while conserving cash (I have used up my balance transfers).

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