cyclic investing stock Archives

8 AI Technology Stocks for Momentum Trading and Growth Investing (以智取胜)

Posted on July 14, 2023 Written by Dr Tee (Ein55)

After major correction of technology stocks in Year 2022, the technology sector recovers strongly in 2023 with the support of Artificial Intelligence (AI), initiated by popularity of ChatGPT, following by the healthy competitions and future AI plans of many technology giant stocks, pushing up the stock prices of technology stocks and even entire US stock indices (S&P500 and Nasdaq), nearer to the last peak in late 2021.

As mentioned in earlier Dr Tee articles, Golden Cross of inflation (now 3%) below interest rate (now 5%) help to support recovery of technology stocks which are sensitive to interest rate (likely will reach its peak soon). Since stock market is usually 6-12 months ahead of economy and businesses, a smart investor may take calculated risk with early actions (eg. big winner for those who took actions 6 months ago on technology stocks when inflation starts to fall from its peak).

Investing and trading in stocks may also apply AI (eg. following certain rules) but key difference is to personalize the strategies, eg holding for short term (momentum trading), mid term (cyclic trading) or long term (growth investing).

Dr Tee has shortlisted 8 AI stocks with potential for trading and investing, each stock requires unique positioning due to different types of LOFTP (Level / Optimism / Fundamental / Technical / Personal Analysis):

1) Nvidia (Nasdaq: NVDA)
Nvidia is a bigger winner in AI game as development generative AI requires strong demand of GPU chips, which is dominated by Nvidia. It projects significant increase in near future revenue which supports the share price to break above last high of $335 in Year 2021, exceeding by 50% to $460 so far.

Even before recent AI stock rally, Nvidia already has sustainable strong business fundamental. However, due to stock price is far above fair value with high Ein55 Optimism, it is more suitable for short term momentum trading, following the uptrend prices (eg. entering when breaking a new high, but it is crucial to set stoploss when price trend is reversed more than risk tolerance level).

2) Microsoft (Nasdaq: MSFT)
Microsoft is another direct AI winner because it is major investor for ChatGPT, even incorporating into BING search engine (challenging Google Search) and Windows 11 platform with Microsoft Office products. As a result, Microsoft share price has recovered back to its 2021 peak of $344, may achieve another new historical high if AI momentum continues.

Microsoft is veteran technology giant stock with over 50 years history since 1970s (comparable with Apple), products are diversified beyond traditional PC into cloud and gaming, etc. Strong business fundamental but it has price exceeding fair value with high Ein55 Optimism, more suitable for mid term cyclic investing (Buy Low Sell High) or short term momentum trading (Buy High Sell Higher).

3) Alphabet / Google (Nasdaq: GOOGL/GOOG)
Alphabet has been early AI developer (eg. DeepMind with AlphaGo could win human No 1 Go player in the world) but slow in commercializing the AI products, still focusing more on Google search engine which 85% market share (compared with BING only has 8%) for advertisement revenue (Youtube contributes to about 10% of Alphabet revenue). ChatGPT quick success has helped Google to introduce comparable BARD chat quickly to supplement Google search. It is not too late for BARD to catch up because they have strong foundation in development with wide Google network as potential customers, just need to focus on marketing and commercialization in future, helping to retain or grow the online advertisement revenue.

Relative to other technology / AI giant stocks, Alphabet / Google is relatively slow in stock price recovery (still below its peak of $150 in Year 2021), current price of $124 is near to its fair value, therefore still possible to be considered for long term investor for growth investing (Buy fair price and Hold). At the same time, Alphabet / Google may also be suitable for mid term cyclic investing (Buy Low Sell High) or short term momentum trading (Buy High Sell Higher). It is a rare giant stock which may be considered for both long term investors and short/mid term traders. However, since few technology giant stocks could last for decades, it is crucial to monitor its technology advantages over competitors (eg. ChatGPT vs BARD, Google vs BING, etc) for long term investors.

4) Meta / Facebook (Nasdaq: META)
Meta share price was seriously corrected in Year 2022 from about $380 to $90, partly due to venture into unprofitable Metaverse and headwind of technology sector then. Meta is early winner for technology stock recovery in 2023 (another is Netflix), growing with very strong momentum (comparable with Nvidia and Microsoft performances), current price of $313 is still below its 2021 peak of $380.

Even without AI (new plan) or Metaverse (old plan), advertisement revenue for existing Facebook and Instagram could already support and grow the business. The new Threads app is a strong challenger to Twitter, could be future revenue generator, making its social media network even wider (a strong economic moat). Meta share price is still below its fair value of about $360, may be considered for long term growth investor and also short term momentum trader.

5) Amazon (Nasdaq: AMZN)
Amazon share price was halved in Year 2022 from about $187 to $85, partly due to high growth during pandemic is not sustainable during post pandemic, business also becomes cyclic, affecting share price stability. Amazon has cloud businesses, AI concept has helped to recover its share prices together with other technology giant stocks, current price of $134 is still below its 2021 peak of $187.

Amazon is a trillion-dollar market cap giant stock (after Apple and Microsoft, ahead of Google and Nvidia), business becomes more sustainable as pre-pandemic. Current share is still below fair value of about $200, therefore may be considered for long term growth investing, mid term cyclic trading or even short term momentum trading.

6) AMD (Nasdaq: AMD)
AMD share price dropped to 1/3 from about $155 to $55 in Year 2022 technology sector crisis, partly due to high growth of chips demand during pandemic is not sustainable during post pandemic, business even suffered losses in the last quarter. Over the last few decades of competition, AMD is stronger and larger than Intel, supporting AMD share price growing by 80 times over the past 10 years. Despite AMD AI chip is still behind leader Nvidia, its latest chips are widely used by cloud platforms (eg. Amazon). AMD price has recovered strongly, current price of $115 is still below its 2021 peak of $155.

AMD is a young technology giant stock which would benefit from future AI sector expansion. Current share is still below fair value of about $200, therefore may be considered for long term growth investing, mid term cyclic trading or even short term momentum trading.

7) TSMC (NYSE: TSM / Taiwan TPE: 2330)
TSMC share price was corrected by more than half from about $140 to $63 in Year 2022 technology sector crisis, partly due to high growth of chips demand during pandemic is not sustainable during post pandemic, but business remains profitable with more sustainable growth rate. TSMC is the world leader for high end chip manufacturing (eg. 3nm), far ahead of competitors Samsung and Intel. With help of Warren Buffett (despite he sold it eventually due to worry of geo-political crisis) and technology sector rally, TSMC price has recovered strongly, current price of $105 is still below its 2022 peak of $140.

Semiconductor sector is cyclic in nature, similar for TSMC share price, more suitable to Buy Low Sell High for cyclic investor. Current share price is higher than fair price of about $80, therefore more suitable for mid term cyclic investing (not long term due to higher Ein55 Optimism) or even short term trading (since momentum is relatively weaker, may consider to Buy Low Sell High with short term swing trading).

8) ASML (Nasdaq: ASML)
Semiconductor sector is very specialized and inter-dependent, eg. design by Nvidia, manufacturing by TSMC but leading equipment supplier is ASML, etc. ASML business and even share price performances are comparable to TSMC since both are closely related.

ASML share price was corrected by more than half from about $868 to $379 in Year 2022 technology sector crisis, partly due to high growth of chips demand during pandemic is not sustainable during post pandemic, but business remains profitable with more sustainable growth rate. ASML is the world leader for high end chip equipment (eg. lithography for 3nm), far ahead of other competitors. US/China trade war may affect its future business expansion in China due to new export ban for high tech semiconductor equipment. Together with technology sector rally, ASML price has doubled from valley, current price of $750 is getting nearer to its 2022 peak of $868.

Semiconductor sector is cyclic in nature, similar for ASML share price, more suitable to Buy Low Sell High for cyclic investor. Current share price is higher than fair price of about $470, therefore more suitable for mid term cyclic investing (not long term due to higher Ein55 Optimism) or even short term trading (since momentum is relatively weaker, may consider to Buy Low Sell High with short term swing trading).

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There are over 2000 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Drop by Dr Tee free 4hr webinar (learning at comfort of home with Zoom) to learn how to position in global giant stocks during COVID-19 stock crisis with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Frasers Logistics & Commercial Trust (SGX: BUOU), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Integrated Commercial Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

View quick preview video below, Dr Tee will introduce 10 key stock investment strategies (股票投资十招) to be learned in 4hr free stock webinar:

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Macroeconomy, Market Cycle Investing, Market Optimism, Market Outlook, Technical Analysis Tagged: cyclic investing stock, growth stock, momentum stock, technology stock, US Stocks

3 Exit Strategies When Crisis Stock Becomes Profits (Tianjin Da Ren Tang)(丰收季节)

Posted on April 17, 2023 Written by Dr Tee (Ein55)

With strong recovery of China / Hong Kong stocks after ending of zero COVID policy and strong rebound of US technology stocks with consistently lower inflation rates, some giant stocks surge to new historical high in share prices. This is a good problem to have for stock investor or trader when there are high capital gains (eg. more than 2 times).

Knowing What to Buy and When to Buy help to start the investing journey at the right time and right direction. However, knowing When to Sell (take profits) or How Long to Hold with alignment to own personality is the ultimate plan.

Let’s learn from Dr Tee on 3 Exit Strategies When a crisis stock becomes highly profitable (丰收季节). A recent Dr Tee Graduate success of a giant stock, Tianjin Pharmaceutical Da Ren Tang (SGX: T14 / China Shanghai: 600329) is applied as an example.

Congratulations to readers who may have taken action on Tianjin Da Ren Tang (strong fundamental China healthcare giant stock, dual listing in SGX and China) mentioned in Dr Tee articles on 2 Oct 2020 ($0.79 share price, Cyclic & Dividend investing), 31 Aug 2021 ($1.32 share price, Growth / Dividend investing) and 17 Feb 2023 ($1.30 share price, Growth / Momentum trading), as well as recent public webinar on 25 Mar 2023 ($1.39 share price, Momentum trading). Current share price (17 Apr 2023) is $2.26, exceeding the Ein55 intrinsic value of $1.50 mentioned, aiming for >$2.50 high Ein55 Optimism price with more greed recently.

Dr Tee graduates were assigned homework on this stock in May 2020 ($0.68 share price, low Ein55 Optimism level for Cyclic + Growth + Dividend + Undervalue investing, see chart below) and again in July 2021 ($1.20 share price), not only share price has climbed up with over 3X capital gains ($0.68 to $2.26), also enjoying an enormous dividend yield = (dividend / price) = ($0.17/$0.68) = 25%, after dividend payments have grown 4X over the 3 years, supported by strong earnings (>70% business is Traditional Chinese Medicine, remaining is western medicine, etc).

Unlike other business (eg. technology / glove) which may have huge earnings surge during the first 2 years of pandemic (then suffer when both earnings and share prices are corrected post pandemic as the high business growth is not sustainable), Tianjin Da Ren Tang has been consistent and sustainable in business growth before / during / post pandemic. With ending of zero COVID policy in China, Tianjin Da Ren Tang enjoys the free ride together to higher Ein55 Optimism level, exceeding intrinsic value (about $1.50) and driven by market greed recently towards high Ein55 Optimism >$2.50.

The stock formerly was named Tianjin Zhongxin, after change in major shareholder, later renamed to Tianjin Da Ren Tang, partly to reflect its true historical value for the past century (eg. comparable with the same TCM school of more famous Beijing Tong Ren Tang). Tianjin Da Ren Tang is relatively less well known to global investors (unlike other Top 10 largest TCM or healthcare stocks in China) which makes it significantly undervalue, especially for dual listed stock in SGX vs China (eg. on 4 Nov 2022, share price was US$1/share in SGX but RMB 28.26 / 6.87 = US$ 4.11), about 4X price difference in the past, but Tianjin Da Ren Tang in SGX catches up recently to narrow down the gap with China listed stock to (40.08 / 6.87) / 2.26 = 2.6 times on 17 Apr 2023.

Even so, it is still over 2X difference between SGX and Shanghai listed stock, therefore there have been some speculations that SGX listed stock (about 1/3 total shares) may be acquired one day. In fact, when there was a change in major shareholder a few years ago, due to regulation, a low-ball offer (less than US$1) was proposed but this was just for formality, “acquisition” was not successful. In fact, Tianjin shares in SG are mostly owned by retail investors, major shareholders (who own 2/3 shares in China) would need to buy up significantly (relative to 2.6X difference of China stock) if the stock may be acquired to delist one day.

By right, both 1/3 SGX stock and 2/3 China Shanghai stock should have close to 1:1 share price since stock value is the same. Therefore, the earlier 4X undervalue of SGX listed of Tianjin Da Ren Tang has make it an excellent dividend stock, especially its dividend is doubled during recent announcement on 31 Mar 2023, together with 2X in earlier 2 years, total of 4X dividend growth in 4 years, resulting in an unbelievable 25% dividend yield for medium term investors who could take action 3 years ago ($0.68 in May 2020 for Dr Tee graduates).

While celebrating the success for Tianjin Da Ren Tang with 3X Capital Gains and 25% Dividend Yield, an investor or trader may worry when to exit. If sell too early, one may regret as stock may goes up further to higher Ein55 Optimism level driven by greed and social media publicity. If sell too late, the rally may be over, corrected back to square one, less profitable. Therefore, even making profits could be a headache, although it is a good problem to have.

Let’s apply 3 Exit Strategies of Dr Tee with LOFTP (Level / Optimism / Fundamental / Technical / Personal) Strategies to take profits. This is not limited to Tianjin Da Ren Tang (one has to make own decision aligning to own personality), may be applied to any giant stock with profits gained so far.

1) Contrarian Sell (Counter-trend)
Similar to “Buy Low” at Low Optimism with bearish prices, a contrarian investor may sell at High Optimism (eg. >$2.50 for Tianjin Da Ren Tang) with bullish uptrend prices (counter trend). Contrarian is against the majority, eg Buy when others were fearful 3 years ago during pandemic and Sell when others are greedy one day (eg. current market).

However, this strategy requires to know where is Low or High (eg. need knowledge of Ein55 Optimism with intrinsic value of a stock), else Buy Low may get lower (worst may go bankrupt for a junk stock with weak business), Sell High may get higher (>2-10X). A useful finetuning strategy is selling progressively (eg. sell 10% share whenever price is up by 10%, selling 100% when it is up by 100% or 2X). This is similar to an investor who “Average Down” (entry in batches) to Buy Low a few years ago. The weakness of this method is potential profits could be limited with progressive sell, balanced by the benefits of multiple more predictable exit points.

A special smart strategy is to sell 50% shares whenever stock price is 2X (eg. Tianjin Da Ren Tang from $0.68 to $1.36, or from $1 to $2, exit price depending on entry prices X2). This way, the initial capital of an investor is recovered (assuming commission and dividends are neglected), this would give confidence to an investor to take higher risk to hold longer time for the remaining 50% shares, aiming for even higher prices as psychologically, the investor knows that one will not make a loss anymore when 50% profits are taken with 2X prices, even a company may go bankrupt in future.

Assuming there is a good problem to have, share price goes up by another 2X after selling 50%, then an investor may sell 50% of remaining 50% = 25% when share price is 4X (eg. Tianjin Da Ren Tang from $0.68 to $2.72). Continue to sell 50% each time on remaining shares if any stock may become rocket high next time (eg. buy IFAST stock last time during pandemic at $1, sell 50% when come to $2, sell 25% when come to $4, sell 12.25% when come to $8, only left 12.25% shares today, else IFAST stock is corrected to below $5 currently if buy & hold till today).

2) Follow-trend Sell
Many retail investors and traders are more suitable for trend-following trading, eg. Buy a stock (low or fair or high price) with support of stronger uptrend prices. Similarly, they feel “safer” or more comfortable to sell when trend is reversed from uptrend to downtrend. This requires knowledge of share price reversal, eg. application of Technical Analysis, however one may regret after selling as the signal could be too fast, eg. taking 10% profits but stock may continue to go up over 2X, unless the traders continue to buy back again in future to follow the uptrend.

A more practical trend-following is to define own personality first, eg. short term, medium term or long term. This way, one may identify the right indicator to sell (aligned to earlier buy signal). A simple but smart strategy is to apply a trailing stop with X% correction during uptrend price, short term trader may sell when it corrects down by 5-10% one day (eg. Sell if Tianjin Da Ren Tang drops by 10% or around $0.22), medium term trader may wait for 10-20% (eg. Sell if Tianjin Da Ren Tang drops by 20% or around $0.44), long term investor may even able to tolerate >20-30% (acceptable since they have hold with over 2-3X capital gains).

Alternatively, a trader may finetune with any systematic trading system (eg. moving averages crossover, MACD, stochastic, breakout of support/resistance, etc), daily, weekly or monthly, following own personality (buy & sell every few weeks, months or years). Success trend-following is when the system matches own personality, else it would be a failure (eg. feeling of selling too early or too late).

Personality is usually ignored by investors / traders, especially for beginners, who simply busy looking for the “secret method” to make money in stocks. Ein55 Optimism has considered effects of personality in both Buy / Sell signals, integrating with LOFTP strategies.

3) No Sell (Hold)
In fact, the last exit option is not to exit at all, which may be holding for long term or lifetime, especially when business is intact, still growing consistently each year. It means an investor may ignore the share prices volatility or even stock crisis, mainly monitoring the business performance (eg. earnings, revenue, cashflow and many other key fundamental indicators from 3 financial statements).

By the way, Tianjin Da Ren Tang is a very cyclic stock (eg. price could drop over 60% during past stock crisis, partly due to cyclic China and SG stock markets), may not be suitable for Buy and Hold strategy, unless it may evolve from cyclic to growth and dividend investing over time. With recent strong dividend growth (despite recent 2X dividend growth may not be sustainable as this is not supported by 2X earnings, only up by >10% earnings, share prices is mainly driven up due to large gap between SG and China listed stock, as well as market greed), it starts to evolve gradually.

For Buy & Hold long term or lifetime, an investor may need 10-20 giant stocks in a portfolio (eg. 50% dividend stocks + 50% growth stocks) for diversification. Stock price (usually cyclic) may not always reflect business fundamental (even it continues to grow). If 25% dividend yield may be sustainable (may not be unless Tianjin Da Ren Tang continues to grow >10% in earnings each year), then an investor has an option to hold a stock as it only takes 4 years of dividend x 25% yearly to recover the initial capital with holding of stocks. Current dividend yield for Tianjin Da Ren Tang is 8% (still high relative to other dividend stocks) based on current share price >$2.

Register Here (Dr Tee Free 4hr Stock Webinar): www.ein55.com

Filed Under: Market Cycle Investing, Stock Market, Technical Analysis, Value Investing Tagged: china stocks, crisis stock, cyclic investing stock, growth stock, High Dividend Stocks

50% Profits of The Hour Glass Stock in 4 months

Posted on May 25, 2021 Written by Dr Tee (Ein55)

Congratulations to readers who have taken action on The Hour Glass (luxury watches stock, SGX: AGS) as Dr Tee has shared this giant stock in several educational posts over the past 1 year. The profit is nearly 50% from $0.80 (breakout) to $1.18 today.

In the earlier educational article on 100 Singapore Dividend Stocks (Mar 2021), Dr Tee shared the intrinsic value of The Hour Glass is about $1.20, now the price has surged to $1.18. It could have more upside but requires market greed to drive it to higher optimism. This is value investing, buy the right stock and right price, just wait patiently for the fruit in 2 targets: intrinsic value and also possible higher optimism price target.

As shown in Optimism Chart, The Hour Glass was still low optimism a few months ago, having 2X upside potential. It is a growth, dividend and cyclic stock, 3-in-1 stock. More importantly, this is a giant stock with very strong business fundamental.

For those who missed the 80 cents price breakout (low optimism, despite nearly highest price at that time) in Feb 2021 with rally to 90+ cents, there is a second chance recently. After the special gift from government on fear of Phase2 COVID measures on 14 May 2021 (Hour Glass dropped to 90 cents), Hour Glass has surged 20% last week and 10% this week, partly supported by good earnings results for financial year ending Mar 2021 (8% better results in last 1 year of pandemic compared to before pandemic), declaring 2X higher interim dividend than last year.

Dividend is like honey to attract bees (traders and investors) to work, helping to support the rising prices (capital gains). However, the plant (stock) needs to produce aromatic flower (growing business) first, else the honey supply may end one day. The best integration of strategy could be dividend + growth investing, having the best of 2 worlds, collecting passive income slowly while enjoying the capital gains with compounding of time. Patient investors could make big money but it requires strong determination.

Major shareholder Dr Henry Tay may know the investment marketing strategy, giving extra 2 cents per share dividend but share price has gained extra 28 cents. Timing of action is crucial, especially for stocks with Financial Reports ending in Mar 201, better results in Q2 would help to support the share prices (except for tech stocks at high optimism under sector rotation). So, a giant stock at low optimism is key. Hour Glass still has upside potential but it is no longer a low hanging fruit (low optimism giant stock) as shared over the past 1 year.

We may not need to own a Rolex watch even if we could afford. Instead, saving for the capital, an investor could indirectly own many luxury watches (Rolex, Patek Philippe, Hublot, etc) through investing in The Hour Glass stock as a business partner. Dr Henry Tay of The Hour Glass is even smarter, also invest in stock of main competitor, Cortina Holdings (SGX: C41), having strong control of luxury watches market in Singapore. In a bullish stock market with growing economy, consumer discretionary stock (including luxury watches) would have higher upside in both businesses and share prices. Alignment of individual stock (Level 1) to sector (Level 2), country (Level 3) and global (Level 4) economy and stock markets is crucial.

Readers may learn further, there are still many low optimism giant stocks waiting. Learn further in the next free 4hr Free Webinar by Dr Tee on other giant stocks (as good as The Hour Glass) which could still wait for you.

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There are over 1500 giant stocks in the world based on Dr Tee criteria, choice of 10 Dream Team giant stocks have to align with one’s unique personality, eg. for shorter term trading (eg. momentum or swing trading) or longer term investing (cyclic investing, undervalue investing or growth investing). Readers should not just “copy and paste” any stock (What to Buy, When to Buy/Sell) as successful action taking requires deeper consideration (LOFTP strategies – Level / Optimism / Fundamental / Technical / Personal Analysis) which you could learn further from Dr Tee Free 4-hr Webinar.

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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Filed Under: Market Cycle Investing, Market Optimism, Stock Market Tagged: cyclic investing stock, dividend stock, growth stock

Top 100 Singapore and Global Bank Stocks to Profit (大小通吃)

Posted on March 23, 2021 Written by Dr Tee (Ein55)

An individual or even a country could not survive without a national bank which supplies cash to exchange for products and services needed in daily life. Even with low interest rates globally, giant bank stocks could still remain profitable, share prices recovering strongly during pandemic, sharing consistent dividends as passive incomes. Higher government bond yield could further support these giant bank stocks with positive outlook of more interest incomes.

In this article, you will learn from Dr Tee on Top 100 Singapore and Global Bank Stocks to profit in current stock market, some may be considered for longer term investing and / or short term trading with COVID-19 recovery stock rally. Bonus for readers who could read every words of the entire article, learning unique strategy to position in 10 global giant bank stocks for both passive incomes (dividend) and capital gains with potential share price appreciation. Both Ein55 Optimism levels and intrinsic values will be shared for each giant stock:

1) Singapore Giant Bank Stocks:

– DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11)

2) Malaysia Giant Bank Stocks:

– Public Bank (Bursa: 1295), Hong Leong Bank (Bursa: 5819), CIMB Bank (Bursa: 1023)

3) Hong Kong / China Giant Bank Stocks:

– Bank of China Hong Kong (HKEX: 2388), China Construction Bank (HKEX: 939)

4) US Giant Bank Stocks:

– JP Morgan Chase (NYSE: JPM), HDFC Bank (NYSE: HDB)

During the COVID-19 stock recovery, there is a sector rotation with slower or even declining trend for global growth stocks. Investors start to pay more attention to cyclical stocks, especially for global giant bank stocks suffering with share prices in lower optimism, recovering together with pandemic, profiting in both capital gains (appreciation in share prices) and passive incomes (consistent dividend payments).

The best time to buy a giant bank stock is always during global stock crisis (eg. Year 2020-2021 during pandemic, 2008—2009 during subprime crisis, etc), not only able to maximize the dividend yield (due to lower entry price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). Dividend stock investing is not for dividend collection alone, may be integrated with growth investing, swing trading, momentum trading, cyclic investing, defensive investing, undervalue investing and other Ein55 strategies.

There are thousands of bank stocks globally but some are weak bank stocks, may not able to survive in the next Global Financial Crisis. The largest bank may not always a giant stock. For example, HSBC Bank (HKEX: 5) is the largest bank in Hong Kong but it is not a giant stock, share prices have been declining over the past decade with weaker businesses. A giant stock is not defined by its size, even a small regional bank could be a giant bank stock for investment (following Dr Tee Giant Criteria).

From the table sorted below for Top 100 Singapore and Global Bank Stocks, each has growing businesses over the past decade with reasonable dividends and positive ROE (Return on Equity). Most of these top bank stocks are affected temporarily by pandemic but still remain profitable with low interest environment. Since future bank interest rates are likely higher, Net Interest Margin (NIM) of global banks would be higher, therefore future earnings would be improving. This potential is reflected in an hidden way with higher bond yield of governments globally.

However, not all the Top 100 global bank stocks listed are suitable for investing and/or trading. A growing business in the past may not be sustainable during COVID-19 period, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a stock with low optimism price may be a value trap as this may be the result of weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies.

Nevertheless, this list of Top 100 global bank stocks can be a useful guide for as the first level filtering. If reader could not find a bank stock of interest under these 7 global exchanges (SGX, Bursa, HKEX, IDX, SET, NYSE, NASDAQ), then may need to deeper analysis before taking any action.

No	Bank Stocks	Exchange	ROE (%)	DY (%)
1	DBS Bank (SGX: D05)	SGX	8.6	3.1
2	OCBC Bank (SGX: O39)	SGX	7.2	2.7
3	UOB Bank (SGX: U11)	SGX	6.9	3.0
4	Public Bank (BURSA: 1295)	BURSA	11.2	3.1
5	BIMB (BURSA: 5258)	BURSA	10.4	6.7
6	Hong Leong Financial Group (BURSA: 1082)	BURSA	9.1	2.2
7	Hong Leong Bank (BURSA: 5819)	BURSA	9	1.9
8	RHB BANK (BURSA: 1066)	BURSA	7.9	5.2
9	AM BANK (BURSA: 1015)	BURSA	6.4	2.4
10	MBSB (BURSA: 1171)	BURSA	6	4.4
11	Affin Bank (BURSA: 5185)	BURSA	3.8	3.9
12	CIMB Bank (BURSA: 1023)	BURSA	3.3	2.6
13	China Merchants Bank (HKEX: 3968)	HKEX	14	2.2
14	ICBC Bank (HKEX: 1398)	HKEX	10.9	5.3
15	China Construction Bank (HKEX: 939)	HKEX	10.6	5.4
16	Bank of China Hong Kong (HKEX: 2388)	HKEX	10.6	5.1
17	Hang Seng Bank (HKEX: 11)	HKEX	9.3	3.6
18	Bank of Communications (HKEX: 3328)	HKEX	9	7.5
19	Chong Hing Bank (HKEX: 1111)	HKEX	7.3	5.2
20	Dah Sing Banking Group (HKEX: 2356)	HKEX	6.5	4.9
21	Dah Sing (HKEX: 440)	HKEX	5	5.2
22	Bank of East Asia (HKEX: 23)	HKEX	2.9	2.4
23	Bank Mega (IDX: MEGA)	IDX	16.5	3.2
24	Bank Central Asia (IDX: BBCA)	IDX	14.7	1.6
25	Bank Woori Saudara Indonesia 1906 (IDX: SDRA)	IDX	6.9	1.6
26	Bank Bumi Arta (IDX: BNBA)	IDX	3	0.2
27	Bank of Ayudhya (SET: BAY)	SET	8	0.9
28	Kasikornbank (SET: KBANK)	SET	6.7	3.6
29	Bangkok Bank (SET: BBL)	SET	3.8	2.0
30	HDFC Bank (NYSE: HDB)	NYSE	15.1	0.1
31	Western Alliance Bancorporation (NYSE: WAL)	NYSE	14.8	1.0
32	Toronto-Dominion Bank (NYSE: TD)	NYSE	12.5	3.6
33	Royal Bank of Canada (NYSE: RY)	NYSE	12.3	3.5
34	Bank of Hawaii (NYSE: BOH)	NYSE	11.2	2.8
35	Canadian Imperial Bank of Commerce (NYSE: CM)	NYSE	10	4.3
36	JP Morgan Chase (NYSE: JPM)	NYSE	9.8	2.3
37	Bank of Nova Scotia (NYSE: BNS)	NYSE	9.2	4.3
38	Bank of Montreal (NYSE: BMO)	NYSE	9.1	3.6
39	U.S. Bancorp (NYSE: USB)	NYSE	8.7	3.0
40	Prosperity Bancshares (NYSE: PB)	NYSE	8.6	2.4
41	Community Bank System (NYSE: CBU)	NYSE	7.8	2.1
42	Cullen/Frost Bankers (NYSE: CFR)	NYSE	7.5	2.4
43	PNC Financial Services (NYSE: PNC)	NYSE	5.9	2.6
44	Sterling Bancorp (NYSE: STL)	NYSE	4.7	1.1
45	Credicorp (NYSE: BAP)	NYSE	3	5.9
46	Northrim BanCorp (NASDAQ: NRIM)	NASDAQ	14.8	3.1
47	Summit State Bank (NASDAQ: SSBI)	NASDAQ	13.9	2.8
48	Meta Financial Group (NASDAQ: CASH)	NASDAQ	13.8	0.4
49	Stock Yards Bancorp (NASDAQ: SYBT)	NASDAQ	13.4	2.1
50	Washington Trust Bancorp (NASDAQ: WASH)	NASDAQ	13.1	3.8
51	Lakeland Financial Corporation (NASDAQ: LKFN)	NASDAQ	12.8	1.7
52	City Holding Company (NASDAQ: CHCO)	NASDAQ	12.7	2.7
53	Arrow Financial Corporation (NASDAQ: AROW)	NASDAQ	12.2	3.0
54	First Bancorp (NASDAQ: FNLC)	NASDAQ	12.1	4.1
55	First Financial Bankshares (NASDAQ: FFIN)	NASDAQ	12	1.0
56	C&F Financial Corp (NASDAQ: CFFI)	NASDAQ	11.5	3.1
57	Glacier Bancorp (NASDAQ: GBCI)	NASDAQ	11.5	2.2
58	Century Bancorp (NASDAQ: CNBKA)	NASDAQ	11.4	0.5
59	First Citizens BancShares (NASDAQ: FCNCA)	NASDAQ	11.3	0.2
60	Camden National Corporation (NASDAQ: CAC)	NASDAQ	11.2	2.8
61	East West Bancorp (NASDAQ: EWBC)	NASDAQ	10.8	1.4
62	Eagle Bancorp (NASDAQ: EGBN)	NASDAQ	10.7	1.6
63	Republic Bancorp (NASDAQ: RBCAA)	NASDAQ	10.1	2.5
64	Commerce Bancshares (NASDAQ: CBSH)	NASDAQ	10	1.3
65	German American Bancorp (NASDAQ: GABC)	NASDAQ	10	1.6
66	Ameris Bancorp (NASDAQ: ABCB)	NASDAQ	9.9	1.1
67	Horizon Bancorp (NASDAQ: HBNC)	NASDAQ	9.9	2.5
68	UMB Financial Corp (NASDAQ: UMBF)	NASDAQ	9.5	1.3
69	Enterprise Bancorp (NASDAQ: EBTC)	NASDAQ	9.4	2.1
70	Southside Bancshares (NASDAQ: SBSI)	NASDAQ	9.4	3.3
71	Penns Woods Bancorp (NASDAQ: PWOD)	NASDAQ	9.3	5.2
72	BancFirst Corporation (NASDAQ: BANF)	NASDAQ	9.3	1.8
73	Community Bankers Trust (NASDAQ: ESXB)	NASDAQ	9.2	2.4
74	1st Source Corporation (NASDAQ: SRCE)	NASDAQ	9.1	2.3
75	Community Trust Bancorp (NASDAQ: CTBI)	NASDAQ	9.1	3.3
76	Signature Bank (NASDAQ: SBNY)	NASDAQ	9.1	0.9
77	American National BankShares (NASDAQ: AMNB)	NASDAQ	8.9	3.1
78	First Internet Bancorp (NASDAQ: INBK)	NASDAQ	8.9	0.6
79	NBT Bancorp (NASDAQ: NBTB)	NASDAQ	9	2.6
80	CVB Financial Corp (NASDAQ: CVBF)	NASDAQ	8.8	3.0
81	Simmons First National Corporation (NASDAQ: SFNC)	NASDAQ	8.6	2.2
82	TowneBank (NASDAQ: TOWN)	NASDAQ	8.2	2.3
83	BOK Financial Corporation (NASDAQ: BOKF)	NASDAQ	8.2	2.1
84	Home Bancshares (NASDAQ: HOMB)	NASDAQ	8.2	1.9
85	International Bancshares (NASDAQ: IBOC)	NASDAQ	8	2.2
86	ConnectOne Bancorp (NASDAQ: CNOB)	NASDAQ	7.8	1.4
87	CNB Financial Corp (NASDAQ: CCNE)	NASDAQ	7.6	2.7
88	Independent Bank Corp (NASDAQ: INDB)	NASDAQ	7.1	2.0
89	TriCo Bancshares (NASDAQ: TCBK)	NASDAQ	7	1.7
90	People’s United Financial (NASDAQ: PBCT)	NASDAQ	7	4.0
91	Enterprise Financial Services Corp (NASDAQ: EFSC)	NASDAQ	7	1.5
92	Wintrust Financial Corp (NASDAQ: WTFC)	NASDAQ	6.6	1.4
93	Columbia Banking System (NASDAQ: COLB)	NASDAQ	6.6	2.8
94	Heartland Financial USA (NASDAQ: HTLF)	NASDAQ	6.4	1.5
95	Pinnacle Financial Partners (NASDAQ: PNFP)	NASDAQ	6.2	0.7
96	Flushing Financial Corporation (NASDAQ: FFIC)	NASDAQ	5.6	3.4
97	Bryn Mawr Bank Corp (NASDAQ: BMTC)	NASDAQ	5.2	2.2
98	Renasant Corp (NASDAQ: RNST)	NASDAQ	3.9	2.0
99	South State Corp (NASDAQ: SSB)	NASDAQ	2.6	2.2
100	Pacific Premier Bancorp (NASDAQ: PPBI)	NASDAQ	2.2	2.3

Here, let’s focus on 10 Global Giant Bank Stocks in 4 different countries (Singapore, Malaysia, Hong Hong / China, USA), learning the unique positioning for each stock:

1) Singapore Giant Bank Stocks:

– DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11)

There are only 3 major banks in Singapore after past few decades of merging and acquisition with strict regulations by MAS to ensure stable financial conditions (eg. regulation of limiting FY2020 dividend payment to 60% of previous year to preserve cash during pandemic). So, it is not surprise that all 3 Singapore bank stocks (DBS Bank, OCBC Bank and UOB Bank) are all giant stocks.

Despite weaker business with higher Non-Performing Loan (NPL) and lower interest income (lower interest rate with lower Net Interest Margin, NIM), all 3 major Singapore bank stocks remain profitable, worst time of Q2/2020 is over, recovering steadily each quarter, supporting their share prices to recover from lower optimism level.

Currently, DBS Bank share price is at moderate high optimism of 60+% Ein55 Optimism level, over intrinsic value of $22. Therefore, DBS is more suitable for shorter term trading (Buy Low Sell High / Buy High Sell Higher). For trading, it is crucial to have S.E.T. (Stop Loss / Entry / Target Prices) in trading plan. For example, if the prices fall back below the support (was resistance) of $27, then a short term trader may need to exit, even with losses, if breakout strategy is the main assumption for trading strategy.

For both OCBC Bank and UOB Bank, share prices have recovered from low optimism to mid optimism of nearly 50%, near to intrinsic values of $12 (OCBC) and $26 (UOB) respectively. It is possible for share prices to go above intrinsic value but it requires a more greedy stock market emotion in Singapore (eg. when STI is above 3000-3300 long term resistance zone). Therefore, cyclic investing strategies (Buy Low Sell High / Buy Fair Price Sell High) may be considered for both stocks.

Readers may refer to earlier article of Dr Tee for more details on 30 Singapore Banking & Finance stocks, mostly were at lower optimism level (9 months ago, just recovering from the worst time of pandemic, congratulation to readers who have taken action to Buy Low after reading this article):
https://www.ein55.com/2020/06/30-singapore-banking-and-finance-stocks/

2) Malaysia Giant Bank Stocks:

– Public Bank (Bursa: 1295), Hong Leong Bank (Bursa: 5819), CIMB Bank (Bursa: 1023)

There are more banks in Malaysia than in Singapore, therefore careful selection of giant bank stocks is crucial for Malaysian stock investors. Public Bank (Teh Hong Piow) and Hong Leong Bank (Quek Leng Chan) are excellent private banks founded and managed by reputable bankers, surviving through past few decades of merging and acquisition of Malaysian banks.

Fundamentally, both Public Bank and Hong Leong Bank are relatively stronger than the peers of other Malaysia banks. Public Bank has just recovered above low optimism to about 30% level, aiming for RM6 intrinsic value, may be considered for cyclic investing. As for Hong Leong Bank, recovery is much stronger to mid optimism level with intrinsic value of RM19, more suitable for medium term trend-following trading.

CIMB is the second largest bank in Malaysia but performance is better than the largest bank, Maybank. CIMB is a more cyclical stock, share prices is recovering from very low optimism, currently still around 20% level, having higher upside potential. An investor may apply cyclic investing strategy, target for CIMB could be intrinsic value of RM7 or even higher if the Bursa stock market becomes more greedy, then there is opportunity to sell at high optimism level.

Readers may read articles of Dr Tee for more details on Public Bank and Hong Leong Bank, both were at lower optimism level then (ample time to Buy Low if one could take action):
https://www.ein55.com/tag/public-bank/

3) Hong Kong / China Giant Bank Stocks:

– Bank of China Hong Kong (HKEX: 2388), China Construction Bank (HKEX: 939)

Many China bank stocks are also listed in Hong Kong stock market (H-share), including Bank of China Hong Kong and China Construction Bank, both are fundamentally strong with high growth potential. Hong Kong stock exchange is tighter in regulation, therefore some investors may feel more confident investing China stocks through Hong Kong, especially for state-owned giant stocks with additional protection by China government.

Bank of China Hong Kong (HKEX: 2388) is a different stock from parent company, Bank of China (HKEX: 3988). Performance of BOC Hong Kong (limited to BOC entities in Hong Kong) is stronger than parent stock, therefore a better choice for growth investing (comparable for both stocks if only considering dividend investing), aiming for higher capital gains. BOC Hong Kong has recovered from past 1 year of low optimism level, breaking above the HK$25 resistance, challenging other higher price level, optimism is still moderate low above 30%, aiming for intrinsic value of HK$38. BOC Hong Kong is a multi-purpose stock, suitable as defender (dividend stock with 5% dividend yield, much better than 0.5% interest if keeping cash in a bank), midfielder (capital gains and dividend) and even a striker (uptrend price for short term with trend-following trading).

China Construction Bank (CCB) is recovering from low optimism during pandemic, currently at Ein55 Optimism of 40%, not far from intrinsic value of HK$8. With strong economy recovery in China in later stage of pandemic, CCB would benefit in near future for businesses, which could support the share prices further.

Readers may read another article of Dr Tee for more details on another Hong Kong / China giant bank stock: ICBC Bank (world and China largest bank):
https://www.ein55.com/2020/12/4-global-bank-stocks-with-vaccine-after-phase-3-covid-19/

4) US Giant Bank Stocks:

– JP Morgan Chase (NYSE: JPM), HDFC Bank (NYSE: HDB)

JP Morgan Chase is the largest bank in USA while HDFC Bank is the largest private bank in India (stock is also listed in NYSE), both are growth stocks, fundamentally strong, supported by growing economy in respective local countries.

JP Morgan share prices recover from correction at mid optimism level in pandemic, currently at high optimism level of over 70%, much higher than its intrinsic value of US$100, driven by the greedy emotion in US stock market. JPM is more suitable for trend-following trading, buying after recovering from each short term correction, or after breaking each intermediate resistance for momentum trading. Since US stock market (both NYSE and NASDAQ) at high optimism level is very volatile, a trader needs to assess own risk tolerance level, choosing the right stocks for trading.

HDFC Bank is relatively more undervalue than JPM. Optimism of HDFC is recovering from low level in pandemic to mid optimism of about 40% currently, near to intrinsic value of US$90. With higher populations in India for decades (would takeover China as No 1 country with the most population in about 10 years time), HDFC Bank would benefit in future businesses, especially after pandemic has ended in India. Besides growth investing, HDFC may also be considered for medium term or short term momentum trading with different price targets based on traders unique personalities.

Readers may view recent video by Dr Tee for more details on HDFC Bank (price was 10% lower then):
https://www.ein55.com/2021/01/6-crisis-investing-momentum-stocks-with-life-changing-20-minutes-talk/

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We may not need to be a banker to enjoy the economic moat of a bank with financial license authorized by each government. An investor could leverage on global giant stocks to make money together in countries with growing economy. All sectors and levels (from individual to country, 大小通吃) need liquidity or cash supplied by bank, therefore investing in a giant bank would have higher probability of winning in higher share prices with consistent dividend payment, supported by growing businesses.

Instead of keeping hard earn money as cash deposit (earning less than 0.5% interest) in a trusted bank, why not taking calculated risk, investing in a portfolio of giant bank stocks with higher potential return in medium to long term (with possible capital loss in short term, especially when entry against the trend)? If a bank is not safe for investment, then it may not be safe for keeping one’s cash in saving account. Instead of lending money with ultra-low interest rate to a bank, one may make money together with a giant bank through stock ownership to share the profits.

Earlier readers of Dr Tee network who took action on a portfolio of giant stocks (not limited to bank stocks) aligned with own personalities could enjoy significant return after 6-12 months later, especially during pandemic period. Reading article is only a “knowledge collector”. An investor needs to learn to convert knowledge into potential fortune through action taking (Buy / Hold / Sell / Wait / Shorting). If not, after reading over 100 articles or other people opinions, the results would still be zero if no action is taken.

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

Filed Under: Market Cycle Investing, Market Outlook, Stock Market Tagged: bank stock, crisis stock, cyclic investing stock, dividend stock, growth stock

4 Global Bank Stocks with Vaccine after Phase 3 COVID-19 (苦尽甘来)

Posted on December 14, 2020 Written by Dr Tee (Ein55)

Vaccination is started globally and Singapore will enter Phase 3, bringing hope to end COVID-19 pandemic, as well as light at the end of tunnel for global bank stocks in crisis to recover with great discounted prices.

In this article, you will learn from Dr Tee on 4 Global Giant Bank Stocks of 4 Countries for longer term investing and / or short term trading with COVID-19 recovery stock rally. Bonus for readers who could read every words of the entire article, learning unique strategy to position in each giant bank stocks and also generalized strategy for all bank stocks.

1) Singapore Giant Bank Stock: OCBC Bank (SGX: O39)

2) Malaysia Giant Bank Stock: Public Bank (Bursa: 1295)

3) US Giant Bank Stock: Wells Fargo Bank (NYSE: WFC)

4) HK / China Giant Bank Stock: ICBC Bank (HKEX: 1398)

During COVID-19 pandemic, most bank stocks suffer in businesses mainly due to higher NPL (Non-Performing Loan) and very low interest rate. As a result, many global bank stocks prices are significantly corrected to low optimism level. However, “Buy Low” may not able to “Sell High” in future if a bank business is affected permanently.

Therefore, it is crucial to focus only on giant bank stocks for market cycle investing during COVID-19 stock crisis with Buy Low Sell High strategy. In general, most bank stocks would follow the global stock markets to recover in share prices, especially with improvement in bank businesses and stronger global economy after vaccination is implemented in most countries, allowing life back to normal as before COVID-19.

A giant stock may not need to be big in size, even a small company could be a giant stock. Let’s study 4 giant bank stocks (following Dr Tee criteria) recovering from low optimism in 4 stock exchanges interested by readers:

1) Singapore Giant Bank Stock: OCBC Bank (SGX: O39)

OCBC Bank is the second largest bank in Singapore, businesses during pandemic and share prices in short term (V-shape recovery) are generally aligned with DBS Bank and UOB Bank. These Top 3 largest Singapore banks have to set aside provisions to prepare for higher default and NPL. Singapore MAS also requires the local banks to limit the dividend distributions to 60% of last financial year. This has resulted OCBC Bank stock prices to fall by about 40% during COVID-19 pandemic.

There are 30 Banking & Finance Stocks in Singapore including OCBC Bank (investor has to focus only on giant stocks for investing):

AMTD IB OV (SGX: HKB), B&M Hldg (SGX: CJN), DBS Bank (SGX: D05), Edition (SGX: 5HG), G K Goh (SGX: G41), Global Investment (SGX: B73), Great Eastern (SGX: G07), Hong Leong Finance (SGX: S41), Hotung Investment (SGX: BLS), IFAST Corporation (SGX: AIY), IFS Capital (SGX: I49), Intraco (SGX: I06), Maxi-Cash Finance (SGX: 5UF), MoneyMax Finance (SGX: 5WJ), Net Pacific Finance (SGX: 5QY), OCBC Bank (SGX: O39), Pacific Century (SGX: P15), Prudential USD (SGX: K6S), Singapore Exchange (SGX: S68), SHS (SGX: 566), Sing Investments & Finance (SGX: S35), Singapore Reinsurance (SGX: S49), Singapura Finance (SGX: S23), TIH (SGX: T55), Uni-Asia Group (SGX: CHJ), UOB Bank (SGX: U11), UOB-KAY HIAN HOLDINGS (SGX: U10), UOI (SGX: U13), ValueMax (SGX: T6I), Vibrant Group (SGX: BIP).

The uniqueness of OCBC is the optimism level (34%) is relatively lower than DBS and UOB, therefore having more upside potential in medium term when COVID-19 fear is fading with global vaccination and also entering of Phase-3 COVID-19 measures in Singapore, allowing stronger growth in local economy which needs banks services. While waiting for recovery of share prices to fair value, OCBC stock investors could enjoy bonus with 3+% dividend yield (6% if there is no MAS limitation), much higher than bank interest rate less than 0.5%.

Many investors “play safe” during stock crisis by keeping the money as cash deposits in banks, providing nearly free loan for banks to expand business and multiply wealth. A smart investor would carefully select a portfolio of giant stocks (including banks) to leverage on strong business fundamental to grow in share prices.

2) Malaysia Giant Bank Stock: Public Bank (Bursa: 1295)

Public Bank is the third largest bank in Malaysia, businesses during pandemic and share prices in short term (V-shape recovery) are generally aligned with other 34 Banking & Finance Stocks in Malaysia (investor has to focus only on giant stocks for investing):

AFFIN (Bursa: 5185), ABMB (Bursa: 2488), ALLIANZ (Bursa: 1163), AMBANK (Bursa: 1015), APEX (Bursa: 5088), BIMB (Bursa: 5258), BURSA (Bursa: 1818), CIMB (Bursa: 1023), ECM (Bursa: 2143), ELKDESA (Bursa: 5228), FINTEC (Bursa: 0150), HLBANK (Bursa: 5819), HLCAP (Bursa: 5274), HLFG (Bursa: 1082), INSAS (Bursa: 3379), JOHAN (Bursa: 3441), KENANGA (Bursa: 6483), KUCHAI (Bursa: 2186), LPI (Bursa: 8621), MAA (Bursa: 1198), MAYBANK (Bursa: 1155), MBSB (Bursa: 1171), MANULFE (Bursa: 1058), MNRB (Bursa: 6459), MPHBCAP (Bursa: 5237), OSKVI (Bursa: 0053), P&O (Bursa: 6009), PBBANK (Bursa: 1295), RCECAP (Bursa: 9296), RHBBANK (Bursa: 1066), TAKAFUL (Bursa: 6139), TA (Bursa: 4898), TUNEPRO (Bursa: 5230).

Major Banks in Malaysia (Public Bank, Maybank, CIMB Bank, RHB Bank, Hong Leong Bank, etc) have suffered triple crisis over the past few years: economy slowdown during COVID-19 pandemic, low bank interest rate and also political instability. This has resulted Public Bank stock prices to fall by nearly 50% over the past few years, a very significant discount.

The uniqueness of Public Bank is relatively lower optimism level (25%) with stronger business fundamental than other Malaysia bank stocks, therefore having more upside potential in medium term when COVID-19 fear is fading with global vaccination and also less CMCO COVID-19 measures in Malaysia, allowing stronger growth in local economy which needs banks services. While waiting for recovery of share prices to fair value, Public Bank stock investors could enjoy bonus with 2% dividend yield, comparable with bank interest rate.

3) US Giant Bank Stock: Wells Fargo Bank (NYSE: WFC)

Wells Fargo Bank is the third largest bank in USA, businesses during pandemic and share prices in short term (V-shape recovery) are generally aligned with hundreds of Banking & Finance Stocks in US, including JP Morgan (NYSE: JPM), Bank of America (NYSE: BAC), Citi Group (NYSE: C), Blackrock (NYSE: BLK), etc.

Major Banks in US have suffered correction in share prices due to US lockdown in Q2/2020 pandemic and fear of COVID-19 pandemic. This has resulted Wells Fargo Bank stock prices to fall over 50% over the past few years, a very significant discount.

The uniqueness of Wells Fargo is lower optimism level (25%) than the peers but this is the result of weaker businesses in the last few quarters of pandemic. Therefore, Wells Fargo is more suitable for crisis investing, having more upside potential in medium term when COVID-19 fear is fading with global vaccination and also more QE (Quantitative Easing) in US after Joe Biden officially becomes US President on 20 Jan 2021, allowing stronger growth in local economy which needs banks services. While waiting for recovery of share prices to fair value, Wells Fargo Bank stock investors could enjoy bonus with 5+% dividend yield, much higher than the Fed ultra-low interest rate of 0-0.25%.

Since Wells Fargo Bank has relatively weaker business fundamental (despite large in business size), diversification is required for crisis investing in this marginal giant bank stock. In fact, there are other much smaller but stronger fundamental bank stocks in US with similar low optimism level as Wells Fargo Bank but much safer for investing in longer term. A smart investor may consider those state (not national) bank giant stocks, having even more upside potential but mostly are undervalue as they are less well known internationally.

4) HK / China Giant Bank Stock: ICBC Bank (HKEX: 1398)

ICBC Bank is the largest bank in China and the world, businesses during pandemic and share prices in short term (V-shape recovery) are generally aligned with other 14 major bank stocks / H-Shares in Hong Kong (investor has to focus only on giant stocks for investing):

Bank of China Hong Kong (HKEX: 2388), Hang Seng Bank (HKEX: 11), China Construction Bank (HKEX: 939), CM Bank (HKEX: 3968), Chong Hing Bank (HKEX: 1111), Bank of East Asia (HKEX: 23), Bank of Communication (HKEX: 3328), Dahsing Banking (HKEX: 2356), ICBC Bank (HKEX: 1398), Citic Bank (HKEX: 998), Bank of China (HKEX: 3988), Minsheng Bank (HKEX: 1988), HSBC Bank (HKEX: 5), Stanchart Bank (HKEX: 2888).

Major Banks in Hong Kong / China have suffered correction in share prices due to US-China trade war, China lockdown in Q1/2020 pandemic and global fear of COVID-19 pandemic. This has resulted ICBC Bank stock prices to fall nearly 50% over the past few years, a very significant discount.

The uniqueness of ICBC is recovering from lower optimism level (39%), more cyclical than the peers in medium term (every few years) with stable business businesses. Therefore, ICBC is more suitable for cyclic investing, having more upside potential in medium term when COVID-19 fear is fading with global vaccination and also less tension in US-China trade war after Joe Biden officially becomes US President on 20 Jan 2021, allowing stronger growth in local economy which needs banks services. While waiting for recovery of share prices to fair value, ICBC Bank stock investors could enjoy bonus with 6% dividend yield, much higher than current very low interest rates in Hong Kong banks.

There are other giant stocks in Hong Kong / China which are stronger and lower optimism than ICBC Bank, despite smaller in size. In fact, the largest local bank in Hong Kong is HSBC Bank but it is a poor bank stock (non-giant stock with weak fundamental). A smart investor would only consider giant bank stocks, not buying any other bank stocks at historical low prices (a common mistake for beginner investors to buy at “cheap” prices without considering the declining value in businesses), having even more upside potential with much lower risk. Risk management with a portfolio of giant stocks is key for crisis investing, so that “Buy Low” would have higher chance of “Sell High” in future.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar, you could ask on any global and local stocks including but not limited to 30 STI component stocks:

Ascendas Reit (SGX: A17U), CapitaLand (SGX: C31), CapitaLand Integrated Commercial Trust (SGX: C38U), City Development (SGX: C09), ComfortDelGro (SGX: C52), Dairy Farm International (SGX: D01), DBS Bank (SGX: D05), Genting Singapore (SGX: G13), Hongkong Land (SGX: H78), Jardine Cycle & Carriage (SGX: C07), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Keppel Corp (SGX: BN4), Keppel DC Reit (SGX: AJBU), Mapletree Commercial Trust (SGX: N2IU), Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U), OCBC Bank (SGX: O39), SATS (SGX: S58), Sembcorp Industries (SGX: U96), Singapore Airlines (SGX: C6L), Singapore Exchange (SGX: S68), Singtel (SGX: Z74), ST Engineering (SGX: S63), Thai Beverage (SGX: Y92), UOB Bank (SGX: U11), UOL (SGX: U14), Venture Corporation (SGX: V03), Wilmar International (SGX: F34), YZJ Shipbldg SGD (SGX: BS6).

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

Filed Under: Fundamental Analysis, Market Optimism, Stock Market, Technical Analysis, Value Investing Tagged: bank stock, crisis stock, cyclic investing stock

Boat of Opportunity Coming for COVID-19 Stock Rally

Posted on November 25, 2020 Written by Dr Tee (Ein55)

COVID-19 vaccine likely will get FDA approval soon, then will be injected ASAP to millions of people globally by end of Dec 2020, before extending to billions of people in the next 6-12 months to end the pandemic permanently. In fact, even 2/3 people are protected, enough to terminate COVID-19 virus naturally as spreading path will be limited when over 60% people have immunity.

Stock market is forward looking, economy is the “master” who walk the “dog” which is stock market taking the lead. For conventional investor who waits for confirmation of economy recovery may miss the early boat of COVID-19 stock crisis recovery rally

There are 2 main investing and trading strategies during any major stock crisis (including COVID-19 pandemic):

1) Average Down (Bear Market)

This is mainly suitable for cyclic / dividend / undervalue stocks which share prices are declining into lower optimism. Dividend yield of 2% – 10% would help to strengthen holding power of investor during “winter time” of stock crisis. Now it is the time for this group of contrarian investors to benefit in coming summer of bullish stock market with tremendous capital gains.

2) Average Up (Bull Market)

This is mainly suitable for growth / momentum stocks with uptrend prices, eg technology / software and COVID-19 beneficiary stocks (eg healthcare, glove, etc). This strategy is sensitive to price trend (especially momentum trading), therefore recently there is sector rotation with changing of momentum to COVID-19 affected stocks (those average down stocks now become potential average up stocks).

It is fine if stock investors have missed the past 8 months of stock “crisis” to buy low (i.e. average down). Now the investors should not miss the change of “average up” but careful choice of growth / momentum stocks in the right sector is crucial for success as share price is getting higher (but still moderate low optimism).

The old saying of “Crisis is Opportunity” is correct for the past decades of market cycle every 5-10+ years, again proven correct for COVID-19 stock crisis. However, this is conditional the investment has to be a giant stock. If not, “Buy Low” may “Get Lower” or even going bankrupt.

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Congratulations to success of Ein55 graduates who dare to overcome own biggest enemy (oneself) to take action, “Be Greedy when others are fearful”. I have received many positive students feedback, here are a few examples:

– over 40% DBS gains + over 20% OCBC gains when investing since Mar 2020

– over 50% gains in Nov 2020 for an US giant bank stock (cyclic)

– over 40% gains in an online HR technology stock (growth)

– over 25% gains in Nov 2020 for 2 oil & gas giant stocks (cyclic + dividend)

– and many other global giant stocks (there are total over 1500 giant stocks following Dr Tee giant stock criteria).

It is never too late to learn stock investment. You have not missed the investment opportunity yet (despite recent stock rally) as there are at least 10 different strategies in stock investing and trading, some adjustments are required for the current global stock market, different from the past 8 months of pandemic. It is important to master the skills quickly within the next 6 months, in order not to miss the last few boats of opportunities for COVID-19 stock crisis (should be called “rally” now).

Once day, the rally would become crisis again, therefore an investor has to master such investment clock for Stocks, Properties, Forex (including bitcoin), Commodities and Bonds.

Filed Under: Macroeconomy, Market Cycle Investing, Stock Market Tagged: covid-19, crisis stock investing, cyclic investing stock, stock rally

111 Singapore S-Chip and Greater China Stocks (龙潭虎穴)

Posted on October 2, 2020 Written by Dr Tee (Ein55)

China is world No 2 economy, therefore there are many China business related stocks in the world (Singapore, China, Hong Kong, Taiwan, US). The quality of China related stocks could vary significantly, including 111 S-Chip stocks in Singapore with 20% weak stocks are suspended and also some strong China stocks could double the share price in a short period.

In this article, you will learn from Dr Tee on 4 China related Giant Stocks which are efficient in making money with strong business growth in Greater China market (China, Hong Kong, Taiwan). Bonus for readers who could read every words of the entire article, learning unique strategy for each giant stock.

1) Singapore All-Rounded Giant Stock (S-Chip / A-Share)

– Tianjin Zhongxin Pharmaceutical Group (SGX: T14 / China Shanghai: 600329, 天津中新药业)

2) China / Hong Kong Giant Bank Stock (H-Share / A-Share)

– Industrial And Commercial Bank Of China, ICBC (China Shanghai: 601398 / HKEX: 1398, 中國工商銀行)

3) China F&B Giant Stock (A-Share)

– Kweichow Moutai (China Shanghai: 600519, 貴州茅台酒)

4) Taiwan Technology Giant Stock (ADR)

– Taiwan Semiconductor Manufacturing, TSMC (Taiwan: 2330 / NYSE: TSM, 台積電)

After China joining WTO since 2001, it has opened up its door to the world, including many global stocks in different stock markets, eg. Singapore (S-Chip), China (A-Share), Hong Kong (H-Share), US (ADR), etc. Greater China market includes China, Hong Kong, Macao and Taiwan, which is a fast rising region, attracting global investors.

In fact, reputation of S-Chip (China business with stock listed in Singapore) is relatively low as 20% of these stocks (24 / 111 stocks) have been suspended as of now due to various reasons, including poor businesses, not following SGX codes of business practices, potential scandals, etc. This concern is also observed in global stock exchanges for other China related stocks in Hong Kong (H-Share) or even in US, eg. Luckin Coffee (NASDAQ: LK) with “excellent” financial report but proven was not reported truthfully. Greed could make a business choose shortcut to achieve the goal. So, a stock investor has to make an integrated analysis of China related stocks, taking calculated risks to ride the uptrend wave of businesses.

There are 111 S-chip or China related Stocks in Singapore, making money with businesses in Greater China (龙潭虎穴):

AnAn International (SGX: Y35), Anchun International Holdings (SGX: BTX), AnnAik Limited (SGX: A52), ARA LOGOS Logistics Trust (SGX: K2LU), BM Mobility (SGX: I9T), Bund Center Investment Ltd (SGX: BTE), CapitaLand Retail China Trust (SGX: AU8U), Chasen Holdings (SGX: 5NV), China Aviation Oil Singapore Corp (SGX: G92), China Environment (SGX: 5OU), China Everbright Water (SGX: U9E), China Fishery (SGX: B0Z), China Great Land (SGX: D50), China Haida (SGX: C92), China Hongxing Sports (SGX: BR9), China International Holdings (SGX: BEH), China Jishan Holdings (SGX: J18), China Mining (SGX: BHD), China Paper Holdings (SGX: C71), China Real Estate Group (SGX: 5RA), China Sky Chem (SGX: E90), China Sports (SGX: FQ8), China Yuanbang Property Holdings (SGX: BCD), China Kangda Food Company (SGX: P74), China Kunda Technology Holdings (SGX: GU5), , Combine Will International Holdings (SGX: N0Z), COSCO Shipping International Singapore (SGX: F83), Courage Investment Group (SGX: CIN), Darco Water Technologies (SGX: BLR), Debao Property Development (SGX: BTF), Dukang Distillers Holdings (SGX: BKV), Dutech Holdings (SGX: CZ4), Emerging Towns & Cities Singapore (SGX: 1C0), Fabchem China (SGX: BFT), First Sponsor Group (SGX: ADN), Full Apex (SGX: BTY), Fuxing China Group (SGX: AWK), Global Invacom Group (SGX: QS9), Green Build Technology (SGX: Y06), Guoan International (SGX: G11), Healthway Medical Cor (SGX: 5NG), Hi-P International (SGX: H17), Hutchison Port Holdings Trust SGD (SGX: P7VU), Hutchison Port Holdings Trust USD (SGX: NS8U), Hu An Cable Holdings (SGX: KI3), Hyflux Limited (SGX: 600), IEV Holdings (SGX: 5TN), Japfa Limited (SGX: UD2), Jason Marine Group (SGX: 5PF), JES International Holdings (SGX: EG0), Jiutian Chemical Group (SGX: C8R), Joyas International Holdings (SGX: E9L), KOP Limited (SGX: 5I1), LCT Holdings (SGX: BJL), Leader Environmental Technologies Limited (SGX: LS9), Lion Asiapac Limited (SGX: BAZ), Luzhou Bio-chem Technology Limited (SGX: L46), Mapletree North Asia Commercial Trust (SGX: RW0U), Memstar Technology (SGX: 5MS), Mercurius Capital Investment (SGX: 5RF), Midas Holdings (SGX: 5EN), Mirach Energy Limited (SGX: AWO), MMP Resources Ltd (SGX: F3V), Malaysia Smelting Corp (SGX: NPW), Natural Cool Holdings (SGX: 5IF), Net Pacific Financial Holdings (SGX: 5QY), Nordic Group (SGX: MR7), Ouhua Energy Holdings (SGX: AJ2), Pacific Andes Resources Development (SGX: P11), Pacific Century Regional Developments (SGX: P15), Pan Hong Holdings Group (SGX: P36), PEC Limited (SGX: IX2), Plastoform Holdings (SGX: AYD), Raffles Infrastructure Holdings (SGX: LUY), Sapphire Corp (SGX: BRD), SBI Offshore Limited (SGX: 5PL), SembCorp Industries Limited (SGX: U96), Shanghai Turbo Enterprises (SGX: AWM), Shangri-La Asia Limited (SGX: S07), SIIC Environment Holdings (SGX: BHK), Sinarmas Land Limited (SGX: A26), Sincap group (SGX: 5UN), Sing Holdings (SGX: 5IC), Sinjia Land Limited (SGX: 5HH), Sino Grandness Food Industry Group (SGX: T4B), Sinopipe Holdings (SGX: X06), Sinostar PEC Holdings (SGX: C9Q), Starland Holdings (SGX: 5UA), Straco Corporation (SGX: S85), Sunpower Group (SGX: 5GD), Suntar Eco City (SGX: BKZ), SunVic Chemical Holdings (SGX: A7S), Swing Media Technology Group (SGX: BEV), Thakral Corporation (SGX: AWI), Tianjin Zhongxin Pharmaceutical Group (SGX: T14), Tiong Seng Holdings (SGX: BFI), United Food Holdings (SGX: AZR), USP Group Limited (SGX: BRS), Valuetronics Holdings (SGX: BN2), Willas-Array Electronics Holdings (SGX: BDR), Wilmar International (SGX: F34), World Precision Machinery (SGX: B49), Yamada Green Resources (SGX: BJV), Yanlord Land Group (SGX: Z25), Yongmao Holdings (SGX: BKX), Yunnan Energy International (SGX: T43), Yangzijiang Shipbuilding YZJ CNY (SGX: SO7), Yangzijiang Shipbuilding YZJ SGD (SGX: BS6), Zhongmin Baihui Retail Group (SGX: 5SR).

From the table sorted below for 111 China related stocks in Singapore, only half are profitable (62 / 11 stocks were making money in businesses last year). Therefore, careful choices of giant China stocks are critical, some are at lower optimism share prices due to either stock market fear or actual business is affected during COVID-19 pandemic.

Most China related stocks in Singapore don’t pay dividend (only 41 / 11 stocks pay dividend). Even if they do, for example, Hutchison Port Holdings Trust (SGX: P7VU / NS8U) with over 9% dividend yield, are not good dividend stocks (despite backed by Li Ka-shing, Hong Kong richest man) due to weaker business fundamental.

Many S-Chip stocks (81 / 11) have Price-to-Book ratio ($ / NAV = PB) < 1 with discount over asset but majority do not have high quality asset related to cash or properties. “Buy Low” may get lower in share prices, a common mistake by beginner investor to buy a stock cheaply (eg. at historical low price) without considering the business fundamental and economic moat.

For most local and global China related stocks, main strategy would be cyclic investing or swing trading, therefore understanding of business and stock market cycle is much more important than undervalue price or dividend payment.

No	Name	Code	ROE (%)	Dividend Yield (%)	PB = Price /NAV
1	Alibaba Pictures Group	S91	–	–	1.80
2	AnAn International	Y35	–	–	1.23
3	Anchun International Holdings	BTX	3.94	10.5	0.04
4	AnnAik Limited	A52	3.34	4.7	0.31
5	ARA LOGOS Logistics Trust	K2LU	–	8.8	1.07
6	BM Mobility	I9T	–	–	4.38
7	Bund Center Investment Ltd	BTE	6.35	1.9	0.94
8	CapitaLand Retail China Trust	AU8U	8.83	8.3	0.72
9	Chasen Holdings	5NV	–	–	0.39
10	China Aviation Oil Singapore Corp	G92	11.96	5.1	0.70
11	China Environment	5OU	–	–	0.36
12	China Everbright Water	U9E	9.46	6.0	0.39
13	China Fishery	B0Z	5.13	–	0.15
14	China Great Land	D50	–	–	-0.19
15	China Haida	C92	–	–	0.05
16	China Hongxing Sports	BR9	–	–	-383.33
17	China International Holdings	BEH	5.61	–	0.32
18	China Jishan Holdings	J18	–	–	1.81
19	China Mining	BHD	–	–	0.41
20	China Paper Holdings	C71	3.24	–	0.13
21	China Real Estate Group	5RA	–	–	0.77
22	China Sky Chem	E90	–	–	0.06
23	China Sports	FQ8	–	–	0.13
24	China Yuanbang Property Holdings	BCD	5.99	–	0.09
25	China Kangda Food Company	P74	0.68	–	0.19
26	China Kunda Technology Holdings	GU5	–	–	1.20
27	China Sunsine Chemical Holdings	QES	15.182	3	0.6385
28	Combine Will International Holdings	N0Z	8.11	5.051	0.26
29	COSCO Shipping International Singapore	F83	1.38	–	0.77
30	Courage Investment Group	CIN	0.41	–	0.18
31	Darco Water Technologies	BLR	–	–	0.29
32	Debao Property Development	BTF	–	–	0.10
33	Dukang Distillers Holdings	BKV	–	–	0.03
34	Dutech Holdings	CZ4	7.98	3.9	0.45
35	Emerging Towns & Cities Singapore	1C0	5.76	–	0.19
36	Fabchem China	BFT	–	–	0.23
37	First Sponsor Group	ADN	10.43	1.851	0.78
38	Full Apex	BTY	–	–	0.08
39	Fuxing China Group	AWK	–	–	0.10
40	Global Invacom Group	QS9	–	–	0.39
41	Green Build Technology	Y06	–	–	0.30
42	Guoan International	G11	–	–	2.24
43	Healthway Medical Cor	5NG	–	–	0.79
44	Hi-P International	H17	13.51	2.473	1.47
45	Hutchison Port Holdings Trust SGD	P7VU	2.04	9.294	0.39
46	Hutchison Port Holdings Trust USD	NS8U	2.04	9.403	0.40
47	Hu An Cable Holdings	KI3	–	–	0.78
48	Hyflux Limited	600	–	–	-0.16
49	IEV Holdings	5TN	14.10	–	5.28
50	Japfa Limited	UD2	13.62	1.479	0.90
51	Jason Marine Group	5PF	8.80	3.497	0.60
52	JES International Holdings	EG0	-44.12	–	-2.77
53	Jiutian Chemical Group	C8R	–	–	1.28
54	Joyas International Holdings	E9L	–	–	3.75
55	KOP Limited	5I1	–	–	0.36
56	LCT Holdings	BJL	1.00	–	0.68
57	Leader Environmental Technologies Limited	LS9	–	–	4.27
58	Lion Asiapac Limited	BAZ	0.75	–	0.41
59	Luzhou Bio-chem Technology Limited	L46	–	–	-0.75
60	Mapletree North Asia Commercial Trust	RW0U	2.62	7.688	0.66
61	Memstar Technology	5MS	–	–	-1.67
62	Mercurius Capital Investment	5RF	–	–	6.25
63	Midas Holdings	5EN	–	–	-7.71
64	Mirach Energy Limited	AWO	52.17	–	0.18
65	MMP Resources Ltd	F3V	–	–	-0.48
66	Malaysia Smelting Corp	NPW	9.01	2.532	0.90
67	Natural Cool Holdings	5IF	–	–	0.60
68	Net Pacific Financial Holdings	5QY	–	–	0.59
69	Nordic Group	MR7	9.87	4.06	0.95
70	Ouhua Energy Holdings	AJ2	7.48	–	0.27
71	Pacific Andes Resources Development	P11	8.47	–	0.09
72	Pacific Century Regional Developments	P15	2.97	8.63	0.81
73	Pan Hong Holdings Group	P36	15.44	3.722	0.37
74	PEC Limited	IX2	–	1.25	0.56
75	Plastoform Holdings	AYD	–	–	-0.34
76	Raffles Infrastructure Holdings	LUY	15.32	–	0.87
77	Sapphire Corp	BRD	4.55	–	0.22
78	SBI Offshore Limited	5PL	–	–	0.55
79	SembCorp Industries Limited	U96	3.07	3.786	0.41
80	Shanghai Turbo Enterprises	AWM	–	–	1.81
81	Shangri-La Asia Limited	S07	2.46	1.218	0.54
82	SIIC Environment Holdings	BHK	7.19	5.495	0.28
83	Sinarmas Land Limited	A26	15.14	2.332	0.25
84	Sincap group	5UN	1.03	–	0.04
85	Sing Holdings	5IC	15.35	4.868	0.51
86	Sinjia Land Limited	5HH	–	–	0.58
87	Sino Grandness Food Industry Group	T4B	6.35	–	0.03
88	Sinopipe Holdings	X06	–	–	-31.71
89	Sinostar PEC Holdings	C9Q	13.64	–	0.52
90	Starland Holdings	5UA	1.05	30	0.60
91	Straco Corporation	S85	13.21	5.057	1.62
92	Sunpower Group	5GD	7.96	0.476	1.07
93	Suntar Eco City	BKZ	0.03	–	2.47
94	SunVic Chemical Holdings	A7S	24.63	–	0.13
95	Swing Media Technology Group	BEV	4.76	–	0.09
96	Thakral Corporation	AWI	6.71	9.524	0.39
97	Tianjin Zhongxin Pharmaceutical Group	T14	11.61	5.373	0.79
98	Tiong Seng Holdings	BFI	3.99	3.596	0.24
99	United Food Holdings	AZR	–	–	0.13
100	USP Group Limited	BRS	–	–	0.25
101	Valuetronics Holdings	BN2	14.53	6.48	1.08
102	Willas-Array Electronics Holdings	BDR	–	–	0.31
103	Wilmar International	F34	7.72	2.839	1.22
104	World Precision Machinery	B49	1.85	5.364	0.34
105	Yamada Green Resources	BJV	2.25	–	0.99
106	Yanlord Land Group	Z25	11.86	6.018	0.39
107	Yongmao Holdings	BKX	7.68	0.283	0.40
108	Yunnan Energy International	T43	–	–	0.91
109	Yangzijiang Shipbuilding YZJ CNY	SO7	9.99	4.414	0.66
110	Yangzijiang Shipbuilding YZJ SGD	BS6	9.99	4.612	0.62
111	Zhongmin Baihui Retail Group	5SR	28.57	4.84	2.86

Due to globalization, most of the 30 STI component stocks have significant businesses in Greater China market (eg. Wilmar, Hongkong Land, etc), although they are not commonly labelled as S-Chip (such as Yangzijiang Shipbuilding, YZJ):

DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), HongkongLand (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09) , CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

An investor has to be selective in investing as some China related stocks in Singapore are weak (buy low may get lower in share price due to weak business, especially in a bearish stock market), despite some may have a beautiful Chinese name or belong to a promising China market but the competition is too intense, only giant China stocks could be profitable in longer term.

Here, let’s focus on 4 China related giant stocks in 4 different stock exchanges (Singapore, Hong Kong / China, Taiwan / US).

1) Singapore All-Rounded Giant Stock (S-Chip / A-Share)

– Tianjin Zhongxin Pharmaceutical Group (SGX: T14 / China Shanghai: 600329, 天津中新药业)

Despite Tianjin Zhongxin is much smaller than other pharmaceutical companies in China, it is a little giant stock. It is an all-rounded stock with many unique characteristic, eg cyclic, growth, dividend and even undervalue. This implies an investor or a trader would have more options but need to choose the right strategy aligning with own personality.

The stock is currently as lower optimism level, possible for long term cyclic investing to Buy Low but requires years of holding power before could sell high, supporting by steady business growth, even during COVID-19 pandemic. The company also distributes high dividend (about 5% dividend yield), suitable for holding but weakness is cyclic share prices may result in losses for shorter term traders, therefore trend-following strategy may be considered. The stock is listed in both Singapore (S-Chip) and China Shanghai (A-Share) with some differences in short term prices due to different market responses (eg. China stock market is relatively more bullish than Singapore stock market over the past 1 year).

Tianjin Zhongxin is a giant Singapore / China healthcare stock, much stronger than most of other 37 Singapore healthcare stocks in Singapore:

Accrelist Ltd (SGX: QZG), Alliance Healthcare (SGX: MIJ), Aoxin Q & M Dental (SGX: 1D4), Asia Vets Holdings (SGX: 5RE), AsiaMedic (SGX: 505), Asian Healthcare Specialists (SGX: 1J3), Beverly JCG (SGX: VFP), Biolidics (SGX: 8YY), Cordlife (SGX: P8A), First Reit (SGX: AW9U), Haw Par Corporation (SGX: H02), HC Surgical Specialists (SGX: 1B1), Healthway Medical Corporation (SGX: 5NG), Hyphens Pharma International (SGX: 1J5), IHH Healthcare (SGX: Q0F), ISEC Healthcare (SGX: 40T), IX Biopharma (SGX: 42C), Lonza Group (SGX: O6Z), Medinex (SGX: OTX), Medtecs International Corporation (SGX: 546), OUE Lippo Healthcare (SGX: 5WA), ParkwayLife Reit (SGX: C2PU), Pharmesis International (SGX: BFK), Q&M Dental Group (SGX: QC7), QT Vascular (SGX: 5I0), Raffles Medical Group (SGX: BSL), RHT Health Trust (SGX: RF1U), Riverstone Holdings (SGX: AP4), SingMedical Group (SGX: 5OT), Suntar Eco-City (SGX: BKZ), TalkMed (SGX: 5G3), Thomson Medical Group (SGX: A50), Tianjin Zhong Xin Pharmaceutical Group (SGX: T14), Top Glove Corporation (SGX: BVA), Trendlines Group (SGX: 42T), UG Healthcare Corporation (SGX: 41A), Vicplas International (SGX: 569).

2) China / Hong Kong Giant Bank Stock (H-Share/A-Share)

– Industrial And Commercial Bank Of China, ICBC (China Shanghai: 601398 / HKEX: 1398, 中國工商銀行)

ICBC is the world largest bank based on asset size, listed in both China Shanghai (A-Share) and Hong Kong (H-Share). It has steady business performance but the growth is limited over the past few years (transition from growth to mature company). It has attracted support of global funds including Temasek of Singapore as a major shareholder (8.4%).

The share price is at long term and medium term low optimism, could be considered for cyclic investing with Buy Low Sell High strategy but current bearish short term prices (sharp falling knife) could result in losses for a trader. In addition, the stock pays consistent dividend in the past, currently dividend yield is about 7%, reasonable for passive income investor.

ICBC is a giant China / Hong Kong bank stock, much stronger than most of 30 Singapore Banking & Finance stocks in Singapore:

3) China F&B Giant Stock (A-Share)

– Kweichow Moutai (China Shanghai: 600519, 貴州茅台酒)

Kweichow Moutai is a famous Chinese liquor stock, also the largest in the world, surpassing Diageo (LSE: DGE) since 2017, mainly supported by high growth share prices. Competitor, Wuliangye Yibin (Shenzhen: 000858, 宜宾五粮液), is also an alternative stock investment option, having strong business fundamental but growth is relatively slower than Moutai.

Moutai is a strong growth stock in long term and also a strong momentum stock in short term. So, either an investor or a trader may apply “Buy & Hold” strategy, with timeframe following own personality. The brand is a strong intangible asset for the company.

The liquor industry could be cyclic in longer time especially when there is any major change in China government policy, eg. about 10 years, due to anti-corruption campaign (eg. consumption or giving high price liquor as gift could be a common practice for decades), growth of Moutai Wuliangye was slow but start to gain momentum over the past few years. In a longer term, premium alcoholic beverages of Moutai and Wuliangye would have sustainable growth, supported by rising middle class population in China with stable growing economy.

Kweichow Moutai and Wuliangye Yibin are giant China F&B stocks, much stronger than most of 48 Singapore F&B stocks in Singapore:

Abterra (SGX: L5I), Acma (SGX: AYV), Amara Holdings (SGX: A34), Bonvests Holdings (SGX: B28), ChasWood Resources (SGX: 5TW), China Fishery (SGX: B0Z), China Kangda Food (SGX: P74), Dairy Farm International (SGX: D01), Del Monte Pacific (SGX: D03), Delfi (SGX: P34), Dukang (SGX: BKV), Envictus (SGX: BQD), Food Empire Holdings (SGX: F03), Fraser and Neave F&N (SGX: F99), Hosen Group (SGX: 5EV), Japan Foods Holding (SGX: 5OI), Japfa (SGX: UD2), JB Foods (SGX: BEW), Jumbo Group (SGX: 42R), Katrina Group (SGX: 1A0), Khong Guan (SGX: K03), Kimly (SGX: 1D0), Koufu (SGX: VL6), Luzhou Bio-Chem (SGX: L46), Mewah International (SGX: MV4), Neo (SGX: 5UJ), No Signboard Holdings (SGX: 1G6), Old Chang Kee (SGX: 5ML), OneApex (SGX: 5SY), Pacific Andes (SGX: P11), Pavillon (SGX: 596), QAF (SGX: Q01), Sakae (SGX: 5DO), SATS (SGX: S58), Sheng Siong (SGX: OV8), Shopper360 (SGX: 1F0), Sino Grandness (SGX: T4B), Soup Restaurant (SGX: 5KI), ST Group Food (SGX: DRX), SunMoon Food (SGX: AAJ), Thai Beverage (SGX: Y92), Tung Lok Restaurants (SGX: 540), United Food (SGX: AZR), Wilmar International (SGX: F34), Yamada Green Resources (SGX: BJV), Yeo Hiap Seng (SGX: Y03), Zhongxin Fruit (SGX: 5EG).

4) Taiwan Technology Giant Stock (ADR)

– Taiwan Semiconductor Manufacturing, TSMC (Taiwan: 2330 / NYSE: TSM, 台積電)

Taiwan is one of “4 Small Dragons” in Asia (South Korea, Taiwan, Singapore and Hong Kong), also a strong technology hub, especially for semiconductor industry leading by TSMC, world largest IC chip manufacturing company. TSMC is very advanced in IC technology development, currently the only player for 5nm technology, far ahead of competitor, Samsung. With rising demand for 5G and internet related applications globally, TSMC has a monopoly of such advanced IC technology, able to sustain the growth with profits over the next decade.

TSMC is a strong growth investing stock and strong momentum stock, share price is doubled over the past few months, riding the wave of uptrend semiconductor industry and unique position as world semiconductor leader. The long term optimism level of TSMC is relatively high, more suitable for short term position trading to “Buy & Hold” with trend-following strategy, supported by strong business growth.

TSMC is a giant Taiwan technology stock, much stronger than most of 53 Electronics stocks and 28 IT stocks, total 81 Technology Stocks in Singapore:

AEM Holdings (SGX: AWX), Accrelist Limited (SGX: QZG), Acma Limited (SGX: AYV), Adventus Holdings (SGX: 5EF), Allied Technologies Limited (SGX: A13), Amplefield Limited (SGX: AOF), Avi Tech Electronics (SGX: BKY), Ban Leong Technologies (SGX: B26), CDW Holding (SGX: BXE), CFM Holdings (SGX: 5EB), CPH Limited (SGX: 539), Chuan Hup Holdings (SGX: C33), Creative Technology (SGX: C76), Datapulse Technology (SGX: BKW), Dragon Group International (SGX: MT1), Dutech Holdings (SGX: CZ4), Ellipsiz Limited (SGX: BIX), Excelpoint Technology (SGX: BDF), Frencken Group (SGX: E28), Global Invacom Group (SGX: QS9), GP Industries (SGX: G20), Global Testing Corporation (SGX: AYN), Grand Venture Technology (SGX: JLB), HGH Holdings (SGX: 5GZ), Hu An Cable Holdings (SGX: KI3), JEP Holdings (SGX: 1J4), Jadason Enterprises (SGX: J03), Karin Technology Holdings (SGX: K29), Libra Group (SGX: 5TR), Manufacturing Integration Technology (SGX: M11), Maruwa Yen1k (SGX: M12), MeGroup Limited (SGX: SJY), Micro-Mechanics Holdings (SGX: 5DD), Plastoform Holdings (SGX: AYD), Polaris Limited (SGX: 5BI), Powermatic Data Systems (SGX: BCY), Renaissance United (SGX: I11), SEVAK Limited (SGX: BAI), SUTL Enterprise (SGX: BHU), Serial System (SGX: S69), Shinvest Holding (SGX: BJW), Sunright Limited (SGX: S71), Sunrise Shares Holdings (SGX: 581), TT International (SGX: T09), Thakral Corporation (SGX: AWI), The Place Holdings (SGX: E27), Trek 2000 International (SGX: 5AB), Valuetronics Holdings (SGX: BN2), Venture Corporation (SGX: V03), Willas-Array Electronics Holdings (SGX: BDR), World Precision Machinery (SGX: B49). Alpha Energy Holdings (SGX: 5TS), Alset International (SGX: 40V), Artivision Technologies (SGX: 5NK), Asiatravel.com Holdings (SGX: 5AM), A-Smart Holdings (SGX: BQC), Azeus Systems Holdings (SGX: BBW), Boustead Singapore Limited (SGX: F9D), Captii (SGX: AWV), Challenger Technologies (SGX: 573), CSE Global (SGX: 544), DISA (SGX: 532), International Press Softcom (SGX: 571), ISDN Holdings (SGX: I07), Keppel DC Reit (SGX: AJBU), Koyo International (SGX: 5OC), M Development (SGX: N14), Mapletree Industrial Trust (SGX: ME8U), New Silkroutes Group (SGX: BMT), New Wave Holdings (SGX: 5FX), PEC (SGX: IX2), Plato Capital (SGX: YYN), Procurri Corporation (SGX: BVQ), Rich Capital Holdings (SGX: 5G4), Silverlake Axis (SGX: 5CP), SinoCloud Group (SGX: 5EK), Stratech Group (SGX: BRR), Synagie Corp (SGX: V2Y), YuuZoo Networks Group Corp (SGX: AFC).

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Both China (Oct 1) and Taiwan (Oct 10) celebrate respective national days in the month of October, moon is the roundest on 1 Oct 2020 (Mid-Autumn Festival), implying peaceful political world could share the fortune but requiring investing in giant stocks. Both Big and 4 Small Dragons (including Singapore) are global economic growth engines, in transition from manufacturing to higher value technology development.

Zoom will be started 30 min before event, bonus talk (Q&A on any investment topics from readers) for early birds. There are many topics we will cover in this 4hr webinar, Dr Tee can have more time for Q&A if you could stay later after the webinar.

Dr Tee will cover over 20 case studies, Singapore giant stocks, eg. CapitaLand Mall Trust (SGX: C38U), Singapore Exchange (SGX: S68), Keppel Corp (SGX: BN4), Top Glove (SGX: BVA), Jardine Matheson Holdings JMH (SGX: J36), Vicom (SGX: WJP) and many others, Malaysia giant stocks, Hong Kong giant stocks and US giant stocks, both long term investing and short term trading.

There are limited tickets left for this 4hr free webinar, please ensure 100% you could join when register: www.ein55.com

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Filed Under: Fundamental Analysis, Macroeconomy, Market Cycle Investing, Market Outlook, Stock Market Tagged: china stocks, cyclic investing stock, growth stock

30 Singapore Banking and Finance Stocks (狮城财神)

Posted on June 18, 2020 Written by Dr Tee (Ein55)

30 Singapore Banking and Finance Stocks DBS OCBC UOB SGX

The best way to make money is to let money make more money. In this article, you will learn 30 Singapore Banking & Finance Stocks which are efficient in making money with money for investors, focusing in 6 groups of stocks (with strategies for 3 major bank stocks: DBS, OCBC and UOB):

1) Bank Stocks
2) Finance Stocks
3) Insurance Stocks
4) Stock Broker Stocks
5) Pawnbroker Stocks
6) Investment and Other Stocks

There are only 30 Banking & Finance stocks in Singapore, relatively less than other sectors as Singapore has tighter regulation in finance sector for services such as lending money (limited licenses available):

From the table sorted for 30 Singapore banking & finance stocks, mostly are profitable (26 / 30 stocks were making money in businesses last year) but still undervalue (22 / 30 stocks have Price to Book ratio, PB < 1, some have higher quality asset such as cash, properties and equities, potential target for future acquisition).

There are 7 stocks having PB < 0.5 with 50% discount over asset but an investor must double check on quality of assets and whether the business could be sustainable to make money. If not, undervalue stock may continue to be undervalue for a long period of time, may not suitable for long term stock investing nor short term stock trading.

No	Name	Ticker	PB = Price /NAV	ROE (%)
1	SGX	S68	8.06	35.9
2	AMTD IB OV	HKB	3.37	13.7
3	DBS	D05	1.12	12.3
4	ValueMax	T6I	0.77	11.7
5	Great Eastern	G07	1.11	11.7
6	TIH	T55	0.48	11.3
7	UOB	U11	0.94	11.0
8	MoneyMax Finance	5WJ	0.74	10.8
9	Maxi-Cash Finance	5UF	0.98	10.7
10	IFAST	AIY	3.33	10.6
11	OCBC Bank	O39	0.88	10.3
12	UOI	U13	1.05	9.7
13	Global Investment	B73	0.71	6.2
14	Hong Leong Finance	S41	0.58	5.4
15	Sing Investments & Finance	S35	0.50	5.4
16	IFS Capital	I49	0.42	5.2
17	Hotung Investment	BLS	0.55	5.0
18	Uni-Asia Group	CHJ	0.24	4.7
19	UOB Kay Hian	U10	0.64	4.6
20	Prudential USD	K6S	2.59	4.0
21	Vibrant Group	BIP	0.34	3.8
22	Singapore Reinsurance	S49	0.65	3.6
23	Pacific Century	P15	0.74	3.0
24	Singapura Finance	S23	0.50	2.9
25	G K Goh	G41	0.62	1.9
26	Intraco	I06	0.31	1.5
27	B&M Hldg	CJN	2.57	-9.0
28	Net Pacific Finance	5QY	0.68	-9.7
29	SHS	566	0.67	-13.6
30	Edition	5HG	0.85	-33.7

Based on Dr Tee criteria, from the 30 Singapore Banking & Finance stocks above, only 8 are giant stocks, some are marginal giant stocks (despite business fundamentals are reasonably good). A few Banking & Finance giant stocks were discussed with more details in Dr Tee earlier articles (see www.ein55.com/blog), eg. DBS (SGX: D05) and Singapore Exchange (SGX: S68).

Focus of this article is discussion on 6 main groups of Banking & Finance stocks in Singapore, understanding the risks and opportunities:

1) Bank Stocks

After decades of merging and acquisition, there are only 3 major local banks in Singapore: DBS (SGX: D05), OCBC (SGX: O39), UOB (SGX: U11), all are STI component stocks. Naturally, these 3 blue chip stocks become the first choice for investment in bank stocks. DBS, OCBC and UOB contribute in total to 1/3 of STI Index weightage, therefore could easily move up or down the entire Singapore stock market whenever there is major move in bank sector.

Here is a list of 30 STI component stocks sorted by size of market cap (significant contribution by 3 major bank stocks):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Most bank stocks are cyclic in nature, including Singapore and global bank stocks in US, Malaysia, Hong Kong, etc. Therefore, market cycle investing strategy is required with alignment to Optimism Strategies to Buy Low Sell High, as well as good understanding the global stock market and economic cycle. Bank sector is the key pillar of economy (business needs money to operate), therefore investment in giant bank stocks in a country with growing economy would enjoy the capital gains of prosperity (狮城财神).

So, which of the 3 major Singapore bank stocks are better? Well, the choice is dependent on stock trading or investment strategy which is personality dependent. The historical stock price chart of DBS, OCBC and UOB with STI (could be considered with STI ETF) shows that these 4 counters are aligned in general directions in longer term.

In longer term, the differences of DBS, OCBC and UOB are mainly on pattern of stocks. DBS is the largest Singapore bank, also the most cyclic among 3 bank stocks, usually correcting more than STI during global financial crisis (eg. Year 2008-2009, falling below $10/share) and outperforming STI, OCBC and UOB during the bullish phase of economy. DBS is more suitable for cycling investing (Buy Low Sell High) and possibly momentum trading (Buy High Sell Higher) when stock market is bullish.

OCBC is the second largest Singapore bank, more defensive with less volatility in prices. OCBC is more suitable for dividend stock investor who prefers to Buy Low and Hold for a long term. So, each global stock crisis (following optimism strategies) could be an opportunity to add more position.

UOB is the smallest bank in Singapore, performance is also in between DBS and OCBC. In general, an investor may choose between DBS and OCBC and their business sizes are larger than UOB. In fact, for short term to mid term trading (months), differences of 3 major bank stocks are limited, any of the 3 bank stocks may be considered but trading rules should be followed (eg. setting S.E.T. in trading plan with Stop Loss / Entry / Target Prices) for Swing Trading or Momentum Trading.

There is no need to invest in all the 3 major bank stocks for diversification as in general, they are all relatively safer than most of the banks in the world due to tight MAS regulations for Singapore banks. Investing in a particular bank stock could be better than investing in STI ETF because bank stocks could have higher dividend yield (5-6%, depending on entry share prices) and growth are stronger than STI (which are diversified over 30 stocks, which some are weaker than DBS, OCBC and UOB).

In general, being a bank has a strong economic moat, especially in Singapore as there are limited licenses issued by government. A smart investor could become a “banker” through investing in any of these 3 major Singapore banks. Each of them has strong sponsor with decades of history in businesses, eg. DBS by Temasek, OCBC by Lee Family, UOB by Wee Cho Yaw.

So, it is possible to invest for lifetime (Buy Low & Hold for life) or even pass to next generation (eg. OCBC has nearly 100 years of history for several generations). Disruptive technology (eg. online payment or virtual bank) would have less impact on traditional bank stocks as bank sector is tightly regulated by local government due to sensitive asset of money. Bank stocks usually are more suitable as positioning as defender in a stock portfolio, more gradual growth with consistent passive income.

Due to low global bank interest rates (nearly 0 for US), the interest income would be less with lower Net Interest Margin (NIM). However, banks could still be profitable with interest income, just the return would be lower. Banks also have other businesses such as investment, credit card, insurance, wealth management, etc, which could provide non-interest income but usually would also be affected in a bearish economy. Therefore, entry with low-optimism stock price far below the fair value (following Dr Tee Optimism Strategies) is key for success in bank stocks investing.

2) Finance Stocks

Finance companies could provide similar services as banks (eg. loan & deposit) but with much smaller scale. There are a few Finance Stocks in Singapore: Singapura Finance (SGX: S23), Sing Investments & Finance (SGX: S35) and Hong Leong Finance (SGX: S41). These 3 finance stocks have reasonably good business fundamental but these 3 Singapore Finance Stocks may not be in the same grade for investing as 3 major Singapore bank stocks.

Finance stocks have relatively weaker business fundamental than bank stocks. Stock investment is always relative comparison, looking for the best, not just good or acceptable. In addition, Singapura Finance, Sing Investments & Finance and Hong Leong Finance are less well known, therefore lower confidence by customers (to deposit money) and investors (to invest in finance stocks).

Hong Leong Finance has a strong sponsor of Kwek Leng Beng (Hong Leong Group Singapore / City Development – SGX: C09). However, its cousin (Kwek Leng Chan of Hong Leng Group Malaysia) stock of Hong Leong Bank (Bursa: 5819) would be a much better choice between 2 stocks as 1 is finance stock, 1 is bank stock with strong business fundamental. Details of Quek / Kwek family of stocks are described by Dr Tee in earlier article (https://www.ein55.com/2020/05/15-hong-leong-group-and-kwek-family-stocks/).

In short, a stock investor may ignore weaker Finance Stocks, aiming for stronger Bank Stocks directly, considering both the stock and business performance, especially for lifetime investing. For shorter term trading, it is possible to consider Finance Stocks if there are positive signals in this group.

3) Insurance Stocks

There are a few Insurance Stocks in Singapore: Great Eastern (SGX: G07), Prudential (SGX: K6S), UOI (SGX: U13), Singapore Reinsurance (SGX: S49) and other stocks which provide partial services on insurance. These 4 Singapore insurance stocks have good business fundamental but only 2 are considered giant stocks (based on Dr Tee criteria) worth longer term investing.

Usually insurance companies are also suitable partner for banks, eg. Great Eastern is under OCBC, UOI is with UOB, LPI (Bursa: 8621) is with Public Bank (Bursa: 1295), etc. This way, similar pool of clients in both banks and insurance groups may be approached with higher chance of success. A stock investor may choose to invest directly in subsidiary (insurance stock) or indirectly through parent stock (bank which has partial business in insurance), if both are giant stocks, the choice is dependent on own personality and pattern of stock.

Confidence in business stability is important for an insurance client (to ensure compensation would be received if any misfortune based on agreement). Therefore, a reputable insurance brand with decades of business history (supported by strong sponsor) is crucial.

There are only 2 business sectors almost guaranteed to make money in long term: Insurance and Casino (eg. Genting Singapore, SGX: G13) as they apply probability in business to make money. It is possible for unexpected hurricanes to destroy houses, US insurance companies (including Warren Buffett’s Berkshire, NYSE: BRK) could suffer losses in 1 particular year. However, past statistics (eg. accident rates in driving, Covid-19 risks, etc) would help to naturally adjust the future premium. If there is a need, resinsurance company could help to share the risks of primary insurance company. Similarly, a stock investor should apply probability investing in making decision of What Stocks to Buy, When to Buy / Sell.

However, insurance business requires customer interactions, eg. meet-up before a policy may be eventually signed. During Covid-19 with global lockdown, both banks (eg. wealth management) and insurance companies suffer due to less chances to meet-up with customers. Due to less income from Great Eastern (subsidiary), parent company OCBC reported 40% less income in Q1/2020. However, insurance sector could recover with restart of economy which allows social interaction for businesses.

4) Stock Broker Stocks

There are a few Stock Brokerage related Stocks in Singapore: Singapore Exchange, SGX (SGX: S68), UOB Kay Hian (SGX: U10) and IFAST (SGX: AIY) are listed in SGX. CGS-CIMB is a joint venture with 2 overseas parent stocks from China and Malaysia: China Galaxy Securities, CGS (HKEx: 6881) and CIMB (Bursa: 1023). Maybank Kim Eng has a parent company in Malaysia, Maybank (Bursa: 1155).

These 6 Stock Brokerage related stocks and parent stocks have good business fundamental but only 3 of them are giant stocks (including Singapore Exchange, SGX, details were given in earlier Dr Tee article: https://www.ein55.com/2020/05/5-global-stock-exchanges-stocks/).

Due to relatively low stock volume in Singapore stock market (except during bullish market or stock crisis time), stock broker stocks with only stock trading business has limited profits when stock market is “quiet” with little price volatility (eg. STI has been ranging around 3000 +/- 300 points over the past 10 years). Only when stock market is very bullish (eg. crazy bull in Years 2000 and 2007) or during global stock crisis (eg. dumping of stocks in Years 2008-2009 and Mar 2020), then stock volume would be relatively higher.

At the same time, Singapore Exchange has more products (stocks and derivatives) for local and overseas customers with profitable monopoly business (unless stock brokers have to compete for similar business of stock trading, lowering commission to gain business but lower profit margin). Singapore has relatively smaller market with less number of traders and investors with more stable (“quiet” market), therefore stock brokerage could become part of a parent company business, may not be the main business to remain profitable. For example, UOB Kay Hian is with UOB group, could also be integrated with UOI (insurance) business with sharing of similar pool of potential clients. So, an investor may invest directly in more profitable parent stock if subsidiary stock (eg. stock brokerage) is playing supporting role with less income.

IFAST is a relatively young stock with strong business fundamental. In fact, stock brokerage business is considered bonus for IFAST as its main business is on fund management which itself could grow naturally (high recurring incomes) yearly with compounding effect. Similarly, the integrated business of fund, stock, insurance, bond, etc, giving an edge to IFAST business. IFAST has high potential with overseas business expansion and even bidding for virtual bank license in Singapore (but intense competition). The main weakness of IFAST is that it is a younger player, therefore relatively less well known among the investors, resulting in “undervalue” share prices, not aligned with its business performance.

5) Pawnbroker Stocks

Interestingly, there are only 3 stocks in Singapore having the name “Max” and all are Pawnbroker Stocks: ValueMax (SGX: T6I), Maxi-Cash Finance (SGX: 5UF), MoneyMax Finance (SGX: 5WJ). Pawnbroker is a special “Finance” stock as it provides easy way of loan, especially to needy people who may not get the loan easily from banks.

A pawnbroker stock has pawnshops that offer secured loans to people, with valuables (eg. gold, silver, jewelry, coins, luxury handbags, etc) used as collateral. If an item is pawned for a loan, within a certain contractual period of time, the pawner may redeem it for the amount of the loan plus some agreed-upon amount for interest. If the loan is not paid (or extended, if applicable) within the time period, the pawned item will be offered for sale to other customers by the pawnbroker.

Since gold or related jewelry is a common valuable as collateral for loan, the “value” of pawnbroker stock would partly related to gold prices. After reaching high optimism, gold market started to from about US$1900/oz in Year 2012 to US$1000+/oz in Year 2016, then recovering gradually to current price of US$1700+/oz in Year 2020. The chart below shows the correlation of falling in gold price and stock prices of ValueMax, Maxi-Cash and MoneyMax which has weaker business fundamental during this period of time (clients or pawners may choose not to redeem the gold as prices have been falling in these 4 years from 2012 o 2016), holding to assets which are declining in values.

3 Singapore Pawnbroker Stocks ValueMax Maxi-Cash Money Max Gold

However, gold started to become bullish from Years 2016 to 2020, business fundamentals of all 3 pawnbrokers (ValueMax, Maxi-Cash and MoneyMax) have improved significantly. However, the rising of gold price with strong business fundamental do not help much on their share prices, simply changing from downtrend to sideways. In fact, all 3 pawnbroker stocks also pay dividend like bank stocks, having high dividend yield now: 5% for ValueMax, 10% for Maxi-Cash and 65 for MoneyMax. However, the catch is an investor would suffer high capital losses due to “undervalue” or downtrend prices (correcting over 50% since IPO, even continue to underperform after business fundamental is improving). Despite the business fundamental is good, pawnbrokers stocks are not suitable for dividend investing due to inconsistent share prices.

The divergence between business and pawnbroker stocks prices may partly due to uncertain gold prices (which crashed before in the past) and also there are better choices for investment in Singapore bank stocks which are more predictable and “safer”. Lack of confidence and little knowledge in pawnshop business may deter potential investors from supporting their share prices.

So, these 3 pawnbroker stocks may not be suitable for investing due to misalignment between business and stock performance. Even during the bullish period of gold, pawners may choose to redeem the collateral (if containing gold), then pawnbrokers would just gain the interests. The 3 pawnbrokers stocks have many branches with relatively high level of debt over asset (a form of leveraging), therefore this business model is not as safe as bank or even traditional finance stocks.

6) Investment and Other Stocks

The remaining Singapore Banking and Finance stocks are mostly related to investment holding, fund management or other diversified businesses. These are some of the investment holding stocks: Hotung Investment (SGX: BLS), G K Goh (SGX: G41), Global Investment (SGX: B73), TIH (SGX: T55) and IFS Capital (SGX: I49). However, most of these stocks have weaker business fundamental, especially if the investment portfolio of companies may not perform during global stock crisis.

Hotung is an undervalue stock (Price-to-Book ratio, PB = 0.55) with stable profitable business (venture capital). It may be considered mainly for medium term dividend investing (about 7% dividend yield) but growth is limited if holding for long term. The company has no debt but undervalue business behave as those undervalue property stocks, safe but slow.

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If you feel there are too few Banking & Finance Stocks in Singapore (only 8 are giant stocks), then you may consider over 1500 global giant stocks in the world, some are much stronger bank stocks than DBS, OCBC and UOB. Learn to form a Dream Team stock portfolio with 10-20 global giant stocks from over 3 sectors and 3 countries, aligning the strategies with own personalities.

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

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Filed Under: Commodity Market, Fundamental Analysis, Macroeconomy, Market Cycle Investing, Market Optimism, Stock Market, Technical Analysis, Value Investing Tagged: bank stock, cyclic investing stock, dbs, dividend stock, Finance Stock, insurance stock, ocbc, undervalue stock, uob

5 Singapore Semiconductor 5G Stocks (力争上游)

Posted on May 27, 2020 Written by Dr Tee (Ein55)

Semiconductor 5G stocks, AEM, UMS, Frencken, Micro-Mechanics, Avi-Tech Electronics, Telco

In this article, you will learn 5 Singapore semiconductor supplier stocks which could benefit from emerging 5G technology, requiring 5 different stock strategies for investing or trading.

1) Micro-Mechanics Holdings (SGX: 5DD) – Singapore Semiconductor Giant Stock

2) UMS Holdings (SGX: 558) – Singapore Semiconductor Giant Stock

3) AEM Holdings (SGX: AWX) – Singapore Semiconductor Stock

4) Frencken Group (SGX: E28) – Singapore Semiconductor Stock

5) Avi-Tech Electronics (SGX: BKY) – Singapore Semiconductor Stock

Over the past few decades, semiconductor sector is driven mainly by telecommunication (eg. smart phones and related products) and consumer electronics (eg. PC, portable devices, etc). Telco sector introduces new Generation of technology about every 10 years (1980s = 1G with analog voice, 1990s = 2G with digital voice, 2000s = 3G with mobile data, 2010s = 4G with mobile broadband, 2020s = 5G with much faster system to maximize Internet of Things – IoT). Current development of 5G, would help to support growth in global semiconductor value chain over the next decade.

Semiconductor (front-end / back-end) technology development milestones are driven by Moore’s Law which predicted IC capacity or density would double itself about every 18 months. So, telco technology Generation of every 10 years is related to Moore’s Law 2X cycle of every 18 months (1.5 year):

Telco / Semiconductor = (10 / 1.5) = 6.67 times of doubling

So, telco capacity in every Generation of 10 years = 2^(6.67) = 102 times difference. Indeed, 5G technology speed and capacity is about 100X faster or more than current 4G technology, supported by Moore’s Law (力争上游).

Gordon Moore only did a rough extrapolation of future technology a few decades ago. However, it serves as a roadmap for smart scientists to challenge the technology limit at each junction, motivating giant semiconductor and telco companies to invest billions of dollars in R&D to achieve these goals which Moore’s Law is still valid today.

Unique technology knowhow (could be in the form of technical patents or trade secrets with amazing powerful new products) is a strong economic moat for a technology company, especially with a stock. Every good news in leadership in new technology (eg. from 4G to 5G, from 7nm to 5nm semiconductor technology, etc) would help to grow the share prices. In fact, the semiconductor or telco company investor earn much more from stock market than from the actual business. The business is simply a driver (if positive growing results) to drive the stock prices. So, it is important for a stock investor to differentiate among business investment (pure fundamental), stock investment (long term) and stock trading (short term).

There are several ways to invest in 5G related companies, for example through major mobile phone manufacturers (eg. Apple – NASDAQ: AAPL, Xiaomi – HKEx: 1810, etc), global and local Telco companies (eg. AT&T – NYSE: T, Singtel – SGX: Z74, etc), leading semiconductor companies (eg. TSMC – NYSE: TSM, Intel – NASDAQ: INTC, AMD – NASDAQ: AMD, Nvidia – NASDAQ: NVDA, Qualcomm – NASDAQ: QCOM, etc) or other related supplier businesses.

There are 53 Electronics stocks and 28 IT stocks, total 81 Technology Stocks in Singapore which have connections with semiconductor industry:

AEM Holdings (SGX: AWX), Accrelist Limited (SGX: QZG), Acma Limited (SGX: AYV), Adventus Holdings (SGX: 5EF), Allied Technologies Limited (SGX: A13), Amplefield Limited (SGX: AOF), Avi Tech Electronics (SGX: BKY), Ban Leong Technologies (SGX: B26), CDW Holding (SGX: BXE), CFM Holdings (SGX: 5EB), CPH Limited (SGX: 539), Chuan Hup Holdings (SGX: C33), Creative Technology (SGX: C76), Datapulse Technology (SGX: BKW), Dragon Group International (SGX: MT1), Dutech Holdings (SGX: CZ4), Ellipsiz Limited (SGX: BIX), Excelpoint Technology (SGX: BDF), Frencken Group (SGX: E28), Global Invacom Group (SGX: QS9), GP Industries (SGX: G20), Global Testing Corporation (SGX: AYN), Grand Venture Technology (SGX: JLB), HGH Holdings (SGX: 5GZ), Hu An Cable Holdings (SGX: KI3), JEP Holdings (SGX: 1J4), Jadason Enterprises (SGX: J03), Karin Technology Holdings (SGX: K29), Libra Group (SGX: 5TR), Manufacturing Integration Technology (SGX: M11), Maruwa Yen1k (SGX: M12), MeGroup Limited (SGX: SJY), Micro-Mechanics Holdings (SGX: 5DD), Plastoform Holdings (SGX: AYD), Polaris Limited (SGX: 5BI), Powermatic Data Systems (SGX: BCY), Renaissance United (SGX: I11), SEVAK Limited (SGX: BAI), SUTL Enterprise (SGX: BHU), Serial System (SGX: S69), Shinvest Holding (SGX: BJW), Sunright Limited (SGX: S71), Sunrise Shares Holdings (SGX: 581), TT International (SGX: T09), Thakral Corporation (SGX: AWI), The Place Holdings (SGX: E27), Trek 2000 International (SGX: 5AB), Valuetronics Holdings (SGX: BN2), Venture Corporation (SGX: V03), Willas-Array Electronics Holdings (SGX: BDR), World Precision Machinery (SGX: B49), Alpha Energy Holdings (SGX: 5TS), Alset International (SGX: 40V), Artivision Technologies (SGX: 5NK), Asiatravel.com Holdings (SGX: 5AM), A-Smart Holdings (SGX: BQC), Azeus Systems Holdings (SGX: BBW), Boustead Singapore Limited (SGX: F9D), Captii (SGX: AWV), Challenger Technologies (SGX: 573), CSE Global (SGX: 544), DISA (SGX: 532), International Press Softcom (SGX: 571), ISDN Holdings (SGX: I07), Keppel DC Reit (SGX: AJBU), Koyo International (SGX: 5OC), M Development (SGX: N14), Mapletree Industrial Trust (SGX: ME8U), New Silkroutes Group (SGX: BMT), New Wave Holdings (SGX: 5FX), PEC (SGX: IX2), Plato Capital (SGX: YYN), Procurri Corporation (SGX: BVQ), Rich Capital Holdings (SGX: 5G4), Silverlake Axis (SGX: 5CP), SinoCloud Group (SGX: 5EK), Stratech Group (SGX: BRR), Synagie Corp (SGX: V2Y), YuuZoo Networks Group Corp (SGX: AFC).

Global and local semiconductor stocks are mostly cyclic in nature, following the economic cycles (affecting consumer’s demand with purchasing power, usually stronger business during bullish economy). US NASDAQ stock exchange has many technology stocks, including semiconductor sector, therefore its stock index also behaves in cyclical way, suitable with “Buy Low Sell High” Optimism Strategy. Few technology stocks could be the leader for long term (a few decades) due to the competitive technology development (including possible mastering of knowhow by competitors with time or by chance). Therefore, a smart investor needs to monitor a technology stock (could be semiconductor, telco, etc), ensuring it is a giant stock (applying Dr Tee criteria) each year before continuing long term investing, otherwise safer to position only in short term or medium term trading during bullish cycle of semiconductor sector.

In Singapore, 5G related stocks are mainly semiconductor suppliers (eg. process/testing equipment, precision engineering, printed circuit board, etc), smaller players but at least 2 are giant stocks (based on Dr Tee giant criteria). Semiconductor sector is considered essential business during Covid-19 pandemic, manufacturing could still continue in Singapore and some other countries.

Here, 5 Singapore semiconductor supplier stocks with reasonably good fundamental (growing business with low debt) are selected for review, potentially could benefit from 5G business (driven by clients’ demand). However, each 5G stock requires different positioning of stock strategy, either for long term investor or short term trading. Only Micro-Mechanics and UMS are giant stocks for investing but other stocks may be considered for trading.

1) Micro-Mechanics (SGX: 5DD) – Singapore Semiconductor Giant Stock

Micro-Mechanics designs and manufactures high precision parts and tools used in applications for the wafer-fabrication (front-end) and assembly processes (back-end) of the semiconductor industry. The company operates in 5 countries: Singapore, Malaysia, Philippines, USA, and China.

Micro-mechanics is a multi-role giant stock, suitable for different personalities of investors. It could be a long term growth stock (supported by growing businesses with strong cash flow and little debt). It is also ideal for medium term cyclic trading with “Buy Low Sell High” optimism strategy. It may be considered as a defender for dividend stock investor with about 6% dividend yield currently. Each of the 3 stock strategies require different entry and exit plans.

2) UMS (SGX: 558) – Singapore Semiconductor Giant Stock

UMS provides high precision front-end semiconductor components, and electromechanical assembly and final testing services. Semiconductor is main business. It operates manly in Singapore, Malaysia, Taiwan, US, South Korea and China.

UMS is a highly cyclic giant stock (despite fundamentally strong), currently at moderate high optimism, therefore not suitable for consideration for long term investing (requiring a global financial crisis with bearish semiconductor cycle before the next entry with condition business fundamental will still be strong). UMS is ideal for medium term cyclic trading with “Buy Low Sell High” optimism strategy, recovering well from nearly 50% price correction in recent global stock crisis due to Covid-19 pandemic. It may be considered as a mid-fielder for mid-term investing with about 4% dividend yield while waiting for capital gains.

3) AEM (SGX: AWX) – Singapore Semiconductor Stock

AEM provides system testing and handling solutions for semiconductor and electronics companies in Asia and globally. It operates through Equipment Systems Solutions, System Level Test & Inspection, Micro-Electro-Mechanical Systems, and Test and Measurement Solutions segments

AEM is a very cyclic stock in long term (partly due to cyclic business of semiconductor cycle), currently at high optimism, therefore not suitable for consideration for long term investing (requiring a global financial crisis with bearish semiconductor cycle before the next entry with condition business fundamental will still be strong). AEM is suitable for medium term momentum trading with “Buy Low & Hold” position trading strategy, supported by strong business performance over the past 5 years due to bullish semiconductor cycle. It may also be considered as a striker for very short term momentum trading with “Buy High Sell Higher” strategy but requiring strict compliance with S.E.T. (Stop Loss / Entry / Target Prices) trading plan.

4) Frencken (SGX: E28) – Singapore Semiconductor Stock

Frencken operates as a capital and consumer equipment service provider worldwide. It has 2 segments, Mechatronics and Integrated Manufacturing Services (IMS). It only has partial business related to semiconductor, therefore closer to a technology stock with diversified sectors.

Frencken is a cyclic stock in long term (despite reasonably strong business fundamental over the past 5 years, following economic cycle), currently at high optimism, therefore not suitable for consideration for long term investing (requiring a global financial crisis with low optimism before the next entry with condition business fundamental will still be strong). Frencken is ideal for medium term cyclic trading with “Buy Low Sell High” optimism strategy, recovering well from nearly 50% price correction in recent global stock crisis due to Covid-19 pandemic. It may also be considered as a striker for very short term momentum trading with “Buy High Sell Higher” strategy but requiring strict compliance with S.E.T. (Stop Loss / Entry / Target Prices) trading plan. It has particularly strong business fundamental in 2019, supporting the rising prices then, careful monitoring of future quarterly financial performance is required for short term trading.

5) Avi-Tech Electronics (SGX: BKY) – Singapore Semiconductor Stock

Avi-Tech Electronics provides burn-in, manufacturing and printed circuit board assembly, and engineering services for the semiconductor, electronics, life sciences, aviation, and other industries. It only has partial business related to semiconductor, therefore closer to a technology stock with diversified sectors. It serves customers in Singapore, US, Malaysia, Germany, Philippines, Thailand, Taiwan, and China.

Avi-Tech is an average performance technology stock in long term (despite reasonably good business fundamental over the past 5 years, following economic cycle), currently at moderate high optimism, therefore not suitable for consideration for long term investing. Avi-Tech is also not a good choice for trading due to lack of price strength. It may be considered as a mid-term defender for dividend stock investor with about 6% dividend yield currently. However, since there are so many better choices of 5G stocks (even Micro-Mechanics or Singtel also has 6% dividend yield, supported by stronger businesses), Avi-Tech is clearly a choice from the bottom of the list, reviewed for the sake of comparison with other 5G stocks.

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Technology stocks (including semiconductor) could be exciting experience for an investor, especially with cyclic investing. Sometimes, a strong momentum technology stock could surge more than 100% in price in less than 1 year. A stock trader could be in dilemma, whether to sell (potential “risk” is may miss further upside in prices) or to hold (potential risk is huge price correction during stock crisis, eg. price may cut by half in recent Covid-19 pandemic).

A simple and powerful stock strategy is to apply “50/50” method, i.e. whenever stock price of a giant stock is doubled, just sell half of the stocks, since capital is recovered (with 2X price, selling 50% stocks), an investor has stronger holding power for the remaining 50% position as the worst could happen in future would be 0% gain, not losing money at all (assuming remaining 50% stocks drop to $0, possible worst case). However, for technology or semiconductor stocks which are cyclic at high optimism, it is relatively safer to sell 100% of stock first, buying back the same giant stocks at lower optimism in the next opportunity.

Micro-Mechanics, UMS and AEM are not 30 STI index component stocks but they are much stronger than most of these blue chip stocks (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

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Filed Under: Fundamental Analysis, Market Cycle Investing, Stock Market, Technical Analysis, Trading, Value Investing Tagged: 5G stock, AEM, Avi-Tech Electronics, cyclic investing stock, Frencken, Micro-Mechanics, semiconductor stock, technology stock, telco stocks, UMS

5 Genting Group Casino Stocks (神机妙算)

Posted on April 30, 2020 Written by Dr Tee (Ein55)

Genting Gerhad casino stocks Malaysia Singapore Hong Kong Plantation

Genting Group is a famous regional casino with 50 years of history, started in Malaysia (Genting Highland), then extending to whole world, including Singapore, UK and US, currently aiming for Japan casino license. Usually there is no certainty in a business but casino is a unique sector which is almost guaranteed to win due to the “unfair” design of games (神机妙算) in favour of the house if there are positive incoming tourists in the region with supporting local government.

Casino stocks are usually cyclic in nature as business is dependent on economy condition, especially on wealthy gamblers (VIP and premium members) which may have more capital for gambling when stock market is bullish or vice versa.

Read the article further to understand the potential of Genting Group, both risks and opportunities, not learning only 1 but all 5 Genting stocks: Genting Berhad, Genting Malaysia, Genting Singapore, Genting Hong Kong, Genting Plantation.

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Genting Berhad is the parent stock, owning other 4 subsidiaries Genting companies with 4 distinct businesses:

1) Genting Berhad (Bursa: 3182) – Malaysia Giant Blue Chip Stock

2) Genting Malaysia (Bursa: 4715) – Malaysia Giant Casino Stock

3) Genting Singapore (SGX: G13) – Singapore Giant CasinoStock

4) Genting Hong Kong (HKEx: 678) – Hong Kong Cruise / ResortStock

5) Genting Plantations (Bursa: 2291) – Malaysia Giant Palm Oil / Property Stock

Genting Group main business is related to casino (main focus of this article). It diversifies business into plantation / property (through Genting Plantations, a giant stock but affected by low optimism palm oil prices) and cruise / resort (through Genting Kong Hong, a weak fundamental stock, would get worse during Coronavirus crisis).

Genting casino business depends on licenses issued by local country: monopoly in Malaysia, duopoly in Singapore (another casino is MBS – Marina Bay Sands), competing with many others in UK (the largest casino operator) and US. Despite casino is a “sure win” business, it requires huge capex in building the casino and integrated resort, paying high tax to local government and business is dependent on tourism (eg. casino business is badly affected for at least 2 months without income during global lockdown).

An investor may invest directly in Genting Berhad (parent stock) if requires more diversification of businesses and also casino business over the world (not dependent on certain country). Here, we would focus on 2 casino stocks in 2 countries, Genting Malaysia (which includes casino in Malaysia, UK, US) and Genting Singapore (which includes casino in Singapore and possibly Japan if license is obtained).

2) Genting Malaysia (Bursa: 4715) – Malaysia Giant Casino Stock

The founder of Genting is Mr Lim Goh Tong (林梧桐) who was already a successful businessman before taking high risks in building the first casino in Malaysia without government assistance in 1960s. During the construction of Genting Highland resort (which later becomes a casino), he nearly died 6 times in various unexpected accidents. He is awarded the only casino license (more than 50 years till now), a legend in Malaysia history.

When Dr Tee was still a small kid, I remember my first trip in life was around 9 years old to Genting Highland. Of course, I could not enter casino as a child. After growing up, I have been to casino all over the world: US (Las Vegas, Atlantic City), Malaysia (finally), Macau (a few there, see earlier article in my trip report to Hong Kong / Macau), Australia (Melbourne, Brisbane), etc, except for Singapore (well, there is admission fee for local Singapore people). I like to visit casino but I seldom gamble (similar to windows shopping) because I understand lower probability of winning for most games, only those who are lucky may win eventually (with condition to stop gambling for the rest of life after the win). Instead, I like to watch the reaction of gamblers, 9/10 are not smiling, likely losing money, trying to gamble more to win back the money.

Stock “investing” with stock tips or rumour or “insider news” is similar to gambling. A smart stock investor has to firstly understand the business (both risks and opportunities), sector prospect and stock market outlook for country and even the whole world. Let’s learn step by step here.

Genting Malaysia is a giant casino stock, business has been stable over the past 10 years, growing in revenue but stagnant in net profit, partly due to higher tax and also global expansion plans with more casino. It could generate steady cash flow (due to unlimited greed of gamblers who volunteer to donate or contribute money unknowingly) and having a culture to pay dividend which is growing each year (current dividend yield is 6.3%).

Of course, cash flow of Genting worldwide casino would be reduced by at least 2/12 months during the global lockdown, 20% or even more deduction in Year 2020. The situation would improve gradually when Coronavirus has subsided over the next few months. It is hard to stop an addicted gambler from gambling for 2 months, likely the person may double the capital for gambling next time when Coronavirus fear is over. It is a sad social issue why some people are against gambling as it could destroy a family, although it also brings additional national revenue.

Over the past few years with weaker Malaysia stock market, Genting Malaysia has dropped more than 50% in share prices (low in last few months of global stock crisis is comparable to 11 years low in Year 2009), currently at low optimism < 25%, aligning with bearish KLCI Index in Malaysia (recovering in last few weeks). Both Genting Berhad and Genting Malaysia are 2 of 30 KLCI component stocks in Malaysia. More importantly, casino business has 50 years of history in Malaysia, the monopoly business would continue to be a strong economic moat for Genting Malaysia. When KLCI recovers, both Genting Malaysia and Genting Berhad would get more support in uptrend share prices.

3) Genting Singapore (SGX: G13) – Singapore Giant CasinoStock

Singapore took a long time to finally accept casino operating in the island. Many years ago, Singapore gamblers have to go overseas (nearest is cruise in international sea or Genting Highland) when nature calls. Now, they could gamble within the island (local people has additional restrictions such as admission fee but probably could only stop some people such as Dr Tee from visiting), either in Resort World Sentosa (RWS, belongs to Genting Singapore) or MBS (belongs to Las Vegas Sands, NYSE: LVS, another overseas casino stock with reasonable business fundamental). This way, at least the losses of gamblers could be recycled to help the Singapore needy people (through government tax) and also Singapore investors (who invest in Genting Singapore).

In fact, gamblers of Genting Singapore are mostly from overseas, eg. China, Malaysia and regional countries. So, lockdown in the regional during Coronavirus pandemic would definitely affect the Genting Singapore business. During the last few months of global stock crisis, Genting Singapore share price is corrected by about 40%, low of 51 cent/share is 11 years low since Year 2009 (last Global Financial Crisis). Currently Genting Singapore is still at low optimism < 25%, aligning with bearish STI Index in Singapore (recovering in last few weeks). Genting Singapore is 1 of 30 STI component stocks in Singapore, trends of prices are well aligned with country and global stock market due to better outlook of Coronavirus condition.

Singapore government has granted both Genting Singapore (RWS) and MBS to expand further in future with more investment in non-gaming infrastructures to exchange for exclusive casino licenses till year 2030. Building of integrated resort and other new tourist attractions (capex for casino companies) would help to attract more overseas tourists to Singapore. So, this is a positive long term plan but will take up a lot of cash (capex) from Genting Singapore which may reduce the free cash flow and dividend for the next 10 years. The application of casino license in Japan is both a risk and opportunity for Genting Singapore as the share prices will be up or down, depending on the unpredictable outcome. Regional expansion is a good move, especially in related casino and integrated resort business. For Genting Singapore and most casino, main revenue generator is gaming business (over 70%, especially VIP and premium members). “Integrated resort” is mainly a way of marketing to attract more tourists to come, which some of them would drop by casino during free time, contributing some money to local economy through gambling.

Both Genting Singapore and Genting Malaysia are cyclic in nature for share prices, therefore buying casino stocks at lower optimism prices in bearish economy would have higher upside potential as casino business is more defensive in nature (assuming Coronavirus pandemic would end eventually, gambles coming back again). However, it is more suitable for investors with stronger holding power because what if economic condition is beyond recovery (eg. permanent job loss, lower productivity with negative GDP, etc), stock market may fall to a new low during global financial crisis (of course, gamblers would continue to gamble, especially when they have limited money, thinking casino is the quickest place to make money). Genting Group has good culture of dividend payment over the decades, the same Lim family (Chairman is son of founder, Lim Kok Thay) would help to support the stock investors with 5-6% dividend yield (assuming casino may lose 50% gamblers, still have 3% dividend yield) during the winter time.

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So, gambling in casino is to give money to casino (not acceptable). However, investing in casino stock is to share the profits of gambling with casino and contributing high tax to local government to help the needy people (could be considered). However, not all casino stocks are good, therefore careful selection is important. In fact, there is another casino giant stock (the owner is also the Top 10 richest person in Malaysia, same list as Lim Kok Thay, boss of Genting Group) listed in Hong Kong, even stronger than Genting casino business. I won’t mention here, interested readers may do a google of Top 10 richest person in Malaysia and their related businesses.

There are 30 STI index component stocks including Genting Singapore (investor has to focus only on giant stocks for investing):
DBS Bank (SGX: D05), Singtel (SGX: Z74), OCBC Bank (SGX: O39), UOB Bank (SGX: U11), Wilmar International (SGX: F34), Jardine Matheson Holdings JMH (SGX: J36), Jardine Strategic Holdings JSH (SGX: J37), Thai Beverage (SGX: Y92), CapitaLand (SGX: C31), Ascendas Reit (SGX: A17U), Singapore Airlines (SGX: C6L), ST Engineering (SGX: S63), Keppel Corp (SGX: BN4), Singapore Exchange (SGX: S68), Hongkong Land (SGX: H78), Genting Singapore (SGX: G13), Mapletree Logistics Trust (SGX: M44U), Jardine Cycle & Carriage (SGX: C07), Mapletree Industrial Trust (SGX: ME8U), City Development (SGX: C09), CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Mapletree Commercial Trust (SGX: N2IU), Dairy Farm International (SGX: D01), UOL (SGX: U14), Venture Corporation (SGX: V03), YZJ Shipbldg SGD (SGX: BS6), Sembcorp Industries (SGX: U96), SATS (SGX: S58), ComfortDelGro (SGX: C52).

There are 30 Malaysia Bursa KLCI index component stocks including Genting Berhard and Genting Malaysia (investor has to focus only on giant stocks for investing):
CIMB (Bursa: 1023) CIMB GROUP HOLDINGS BERHAD, DIALOG (Bursa: 7277) DIALOG GROUP BERHAD, DIGI (Bursa: 6947) DIGI.COM BERHAD, GENM (Bursa: 4715) GENTING MALAYSIA BERHAD, GENTING (Bursa: 3182) GENTING BERHAD, HAPSENG (Bursa: 3034) HAP SENG CONSOLIDATED BERHAD, HARTA (Bursa: 5168) HARTALEGA HOLDINGS BERHAD, HLBANK (Bursa: 5819) HONG LEONG BANK BERHAD, HLFG (Bursa: 1082) HONG LEONG FINANCIAL GROUP BERHAD, IHH (Bursa: 5225) IHH HEALTHCARE BERHAD, IOICORP (1961) IOI CORPORATION BERHAD, KLCC (Bursa: 5235SS) KLCC PROPERTY HOLDINGS BERHAD, KLK (Bursa: 2445) KUALA LUMPUR KEPONG BERHAD, MAXIS (Bursa: 6012) MAXIS BERHAD, MAYBANK (Bursa: 1155) MALAYAN BANKING BERHAD, MISC (Bursa: 3816) MISC BERHAD, NESTLE (Bursa: 4707) NESTLE MALAYSIA BERHAD, PBBANK (Bursa: 1295) PUBLIC BANK BERHAD, PCHEM (Bursa: 5183) PETRONAS CHEMICALS GROUP BERHAD, PETDAG (Bursa: 5681) PETRONAS DAGANGAN BHD, PETGAS (Bursa: 6033) PETRONAS GAS BERHAD, PMETAL (Bursa: 8869) PRESS METAL ALUMINIUM HOLDINGS BERHAD, PPB (Bursa: 4065) PPB GROUP BERHAD, RHBBANK (Bursa: 1066) RHB BANK BERHAD, SIME (Bursa: 4197) SIME DARBY BERHAD, SIMEPLT (Bursa: 5285) SIME DARBY PLANTATION BERHAD, TENAGA (Bursa: 5347) TENAGA NASIONAL BHD, TM (Bursa: 4863) TELEKOM MALAYSIA BERHAD, TOPGLOV (Bursa: 7113) TOP GLOVE CORPORATION BHD.

It is better to learn how to fish (investing), instead of waiting for the fishes (stock investing ideas). Drop by Dr Tee free 4hr investment course to learn how to position in global giant stocks with 10 unique stock investing strategies, knowing What to Buy, When to Buy/Sell.

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 9000 members.

Filed Under: Fundamental Analysis, Macroeconomy, Market Cycle Investing, Market Optimism, Market Outlook, Stock Market, Value Investing Tagged: Blue Chip Stocks, casino stocks, crisis stock, cyclic investing stock, dividend stock, Genting, Genting Berhad, Genting Malaysia, Genting Plantations, Genting Singapore, Las Vegas Sands, Malaysia Stocks, MBS, RWS

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