ES group a potential takeover target?

In its FY2014 report, the group explained about its direction for growth.  "The Group remains on the lookout for opportunities to expand its core business while exploring possible mergers and acquisitions with a view to enhance shareholders’ value in the long run."

Source: http://infopub.sgx.com/FileOpen/ESGroup_FY2014_Results_27Feb15.ashx?App=Announcement&FileID=336684

Although revenue decreased by 18%, net profit increased by 218%. This company is expanding fast with very little debt and having a lot of customer backlogs to fulfill. It is in my opinion a fast growing small company with very little or low risk despite a falling oil price.

A right decision to sell Pan United

I bought Pan united on the 1 Oct 12 and sold it on 16 May 14. Initially, i see this company as a dominant supplier of basic building materials in Singapore, coupled with huge government initiatives to upgrade infrastructure and build public housing.

However, the company acquired Changshu Changjiang International Port (CCIP) for RMB436.5m in Feb 14. The news was bad in my perspective because port facilities will incur more expenses to maintain.

I like its supply of basic building materials business in Singapore, but do not like that fact that it is acquiring a port and not focusing on its profitable business. With so much assets to handle, this company may not be able to concentrate on what's most profitable to itself as well as to shareholders.

The image below is taken from SGX website show a review of its FY2014 performance indicating that CCIP was part of an increase in interest costs and depreciation expenses.

2 company that reported good earnings

Chip Eng Seng - year to year increase of 282.6% in net profit.

• Developer
• Investments in hospitality/property

Future prospects

Its investment efforts are targeted at recurring income for future growth. Although future is promising for this, a spike in interest rates may affect this company due to high borrowings.

TREK 2000 INTERNATIONAL LTD - year to year increase of 137.85% in net profit.

• Consumer electronics manufacturer

Future prospects

The future of IT electronics sector remains uncertain as to whether the company can continuously keep up with innovation and reap from its R&D efforts.

MBSB Bursa a Strong buy

Malaysian Building Society Bank (MBSB) saw its net profit climbed to RM1.02 billion, a 70% increase in its 2014 full year as compared to 2013. There was a news that MBSB was the fastest growing enterprise in Malaysia 2014.

MBSB was about 70% owned by Malaysia's EPF, which is seen as a government-linked entity.

I think this company will continue to grow, and given its new 5 year growth strategy from 2015-2019 of changing its retail to corporate exposure from 85:15 to 70:30, it will acclaim more revenue from corporate customers, which are bigger slices of the pie.

Top 5 Blue Chip Stocks to buy in 2015

• Raffles Medical - Room for growth when hospital expansion is completed
• Keppel Corp - Low oil price and cheap acquisition of Keppel Land
• ComfortDelgro - Stable and very good long term prospects
• Silverlake Axis - Consistant annual growth and a heavy cash cow
• UOB - prefer UOB which have lesser exposure as compared to DBS and OCBC

Wishing all a happy chinese new year! I'll looking forward to a remisier role around June period. 

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Oil price have dropped, but demand is picking up as well

Source: http://www.bloomberg.com/news/articles/2015-02-11/goldman-here-s-why-oil-crashed-and-why-lower-prices-are-here-to-stay

As the chart hit the February period, demand has picked up as well. The justification for the increase in demand is unknown. Our vehicles do not consume more fuel than before, or rather that fuel prices have gone down that we can travel cheaply. But yet that do not justify the vast increase as well, unless oil consuming countries like India, China and US are aggressively buying them into their oil reserves.

The cheap oil prices could also improve profitability of the transport sector as well. A long decrease in oil prices could allow transport companies, utility companies to reduce their expenses.

Global Logistic Properties

Source: Bloomberg

After a number of corrections, the price seemed to have reached a level where geopolitical risks seemed to have been factored in.

However, whether this stock has reached the lowest is unknown. However, i am optimistic that this stock will be a long term future growth stock due to the portfolio of assets supporting e-commerce companies.

Be careful of China

China's growth story can be bullish but the amount of debts that could be haunting the country is worrying.

Source: http://www.ft.com/cms/s/0/085e0368-a534-11e4-bf11-00144feab7de.html#axzz3QX7IXZuC

Bank stocks in Singapore like DBS and OCBC have been soaring as well and both banks have exposure to China.

Since the change of lot sizes from 1000 to 100, investors can now have the option to switch DBS and OCBC for UOB, which have lowest exposure to China among its peers.

Source: http://sbr.com.sg/commercial-property/news/chart-day-heres-how-risky-singapore-banks-china-exposure-can-get