Sunday, 17 September 2017

Recent Portfolio Update and Thoughts

Dear All,

I've divested all my units (3500) in HC surgical, with no reasons in particular except to re-balance my portfolio.

Raffles medical has continued to be a poor performer for me, and is the biggest drag as it constitutes the majority of my portfolio. Nonetheless, I will continue watching this counter and will likely average down.

Two other counters I'm closely monitoring is Jumbo Group (which I already own a small parcel of), as well as Comfort Delgro, with both demonstrating recent weakness; Jumbo due to its stagnant results and CDG with its recent taxi-competition. Although CDG is potentially losing revenue due to the various incentives Grab has offered to lure its cabbies, I do believe that CDG may eventually come to an agreement with Uber to counter this. How effective it will be is another question.

Nonetheless, CDG is looking slightly more attractive now that it has reached its 2014 levels, but i do not think that it has bottomed yet. It will be difficult to catch the bottom for sure and if I were to enter, I would have to commit to averaging down in order to get the best out of it. It is worth noting that whilst the taxi business does take up a huge chunk of CDG's operations, they do have other operations including public transport and engineering.

Furthermore, Grab/Uber, whilst snatching market share from CDG, is burning lots of cash in the process. Their model is not without it's downside as well. (Please note that I'm not speaking from personal experience, but based on what I've learnt from some of the Uber and Grab drivers when I tried the app myself); "it is annoying that a percentage of our earnings goes to the company", "Taxis are actually good too, they pay a high base rental, but they do not have to pay a percentage, which then varies with their earnings. Earning more means losing more".

I'd leave things here for now, thanks for reading.


1 comment:

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