5 Glove Giant Stocks Recovering from Crisis (孤掌难鸣)

Posted on May 19, 2023 Written by

During the first year of pandemic in 2020, due to extraordinary demand for gloves, both the sales (>3X) and net profits (>5X) have set record high for glove manufacturers, supported by higher volume and higher selling prices, driving share prices to over 5-10 times compared to pre-pandemic. However, the quick return has invited many smaller players, supply more than demand when fear of COVID was fading over the past 2 years, glove stocks suffer big drops of both sales and income to about 10-20% of peak performances, even lower than pre-pandemic, driving the share prices like a roller-coaster, this time to less than 10% of peak prices.

In this article, you will learn 5 glove giant stocks in Singapore and Malaysia benefit from recovering in cyclic business in post-pandemic with over 2X upside potential of share prices, each requiring unique stock strategies for investing or trading.

1) Top Glove (SGX: BVA) / (Bursa: 7113) – Singapore / Malaysia Giant Glove Stock

2) Hartalega (Bursa: 5168) – Malaysia Giant Glove Stock

3) Kossan (Bursa: 7153) – Malaysia Giant Glove Stock

4) SuperMax (Bursa: 7106) – Malaysia Giant Glove Stock

5) Riverstone (SGX: AP4) – Singapore Giant Glove Stock

“Crisis is Opportunity‘, a golden investing rule but only true if the stock prices are falling to low Optimism while business is still intact or having high chance to recover. For glove stocks, due to cyclic business induced by pandemic (孤掌难鸣), despite some are still making losses now, demand for glove will be back sooner or later, especially when smaller players could not survive through the cold winter, demand will be more than supply again (currently many glove manufacturers only produce less than 50% capacity).

Buy Low may lower before an investor could Sell High in future, no one could predict the lowest/highest points for stock prices or businesses. Therefore, it is more practical to Buy Low enough, having patience to hold and then Sell High enough one day, integrating with several key indicators for business and stock price reversal. Crisis investing requires diversification over a portfolio of 10-20 giant stocks over several sectors and countries, alignment with own personality (eg. short / mid / long term) is key for success.

The largest glove stock, Top Glove, takes the lead to announce recently that ASP (Average Selling Price) of glove will be adjusted higher. Other competitors would follow the same trend of market leader, when glove selling prices are higher, when demand may be increasing in the next 1 year with more sales (glove also has expiry dates, inventory will be exhausted), likely they would report profits again, even if only aiming for target of pre-pandemic in 2019, both the sales and share prices could have 2X upside potential.

Top Glove (listed in both Singapore and Malaysia), Hartalega, Kossan and SuperMax are considered the Big Four of glove manufacturers in Malaysia, all are giant stocks (based on Dr Tee criteria), will be discussed in further.  Riverstone is a smaller player (listed in Singapore) but having strong business fundamental, will be discussed as well.

In recent 15th Ein55 Charity Course (6 May 2023) on Global Discounted NAV Stocks, we have raised fund of $16,300 for Tzu Chi Singapore to help needy families in Singapore. Under the spirit of charity, Dr Tee decides to share 5 glove stocks discussed (SuperMax is an undervalue stock with stock price much less than discounted asset value) with readers as strikers in post-pandemic with light at the end of tunnel for glove industry (read each details in this article to fully understand on how to position in these giant stocks).

So, we will elaborate here mainly on 5 giant glove stocks (Top Glove, Hartalega, Kossan, SuperMax, Riverstone) which may be considered for both longer term investing (when correcting below a fair price with holding power) and short term trading (following S.E.T. trading rule – Stop Loss / Entry / Target Prices).

1) Top Glove (SGX: BVA) / (Bursa: 7113) – Singapore / Malaysia Giant Glove Stock

Top Glove is the world’s largest rubber glove manufacturer with many types of latex and nitrile gloves from manufacturing facilities in Malaysia, Thailand and China. Founder and major shareholder is Lim Wee Chai (27% ownership), was No 14 richest person in Malaysia (Forbes’ List), but ranking drops significantly with share prices from nearly RM10 to less than RM1 at one time.

Top Glove has dual listing in Malaysia Bursa (longer history) and Singapore SGX. The relative stock performance are aligned but due to different group of investors, short term share price in SGX (BVA) can be slightly different from Bursa (7113). Fundamentally, each share (SGX or Bursa) is the same but short term share price may not be due to difference of forex (SGD/MYR) alone, especially ringgit has been weaker over the past few years.

Due to low optimism in share price but weaker business (may turn around to positive in about 1 year), Top Glove may be considered as a striker stock (aiming for high potential capital gains with little or no dividend support) for short term / medium term trading with condition the share prices (Bursa: 7113) has to stay above RM1 as critical support (SGX BVA will be S$0.30 with 0.33 exchange rate for SGD/MYR).

Minimum target could be 2X for trading (RM2) but if there is any global uncertainty with stock price below RM1, a trader may need to exit with stop loss (eg. 5-10%), minimizing risk of Buy Low get lower. If the cyclic business is recovering well over the next years, then the stock may be position as “mid-fielder” stock for longer term holding for both growth in capital gains and dividend payments, then the fair price target would be >RM3 of its Ein55 intrinsic value. Before the hot summer with greed, an investor or trader has to endure through winter time of reversal from bear to bull.

2) Hartalega (Bursa: 5168) – Malaysia Giant Glove Stock

Hartalega is the world’s largest nitrile glove manufacturer. Founder and major shareholder is Kuan Kam Hon (about 50% ownership with family), was the No 9 richest person in Malaysia (Forbes’ List), also drop in ranking with falling of share price from about RM20 to RM2.

Hartalega main product of nitrile glove has higher profit margin compared to latex (rubber) glove. However, this profitable product segment also attracts many competitors, therefore the high growth of Hartalega is getting slower, now is more aligned (sustainable rate) with other major competitors, sharing the big pie of glove industries.

Similar to Top Glove, Hartalega is more suitable for crisis recovering trading but critical price support is RM2 (compared to RM1 of Top Glove). Even with weaker quarterly results recently, the share price did not fall further, supported above RM2 instead, a sign of market confidence. Top Glove and Hartalega has strong correlation in share prices of about 1:2, therefore when one stock starts to move in certain direction, another stock would follow, especially if it is glove industry or general market trend. For short term trading, Top Glove is stronger than Hartalega, therefore recently Hartalega has been catching up with lagging prices above RM2.

Stock market usually is 6-12 months ahead of economy or company business, therefore positioning in either glove leader (Top Glove or Hartalega) has additional protection of stronger companies while bottom fishing to Buy Low, ideally following S.E.T. (Stop Loss / Entry / Target) for short term trading plan, monitoring future business and Ein55 Optimism level for longer term investing.

3) Kossan (Bursa: 7153) – Malaysia Giant Glove Stock

Kossan is the world’s second largest glove manufacturer (technical rubber products, medical gloves, cleanroom products, etc). Kossan is a strong growth stock (supported by growing businesses with strong cash flow), performance is stronger than the main competitor, Top Glove. Kossan has low debt level, having potential to expand further with more leveraging if needed. The glove industry is big enough for major players to share the big global pie of growing demand for gloves in manufacturing and healthcare sectors.

Again, similar strategies as Top Glove to position Kossan at low Optimism level, except critical price support is higher at RM1.25 (trading above this level is relatively safer), compared to RM1 support of Top Glove.

4) SuperMax (Bursa: 7106) – Malaysia Giant Glove Stock

SuperMax is a leading medical / latex gloves manufacturer. SuperMax has additional protection of having undervalue asset more than its share price, useful consideration if a company may be in crisis, may not go bankrupt easily.

Again, similar strategies as Top Glove to position SuperMax at low Optimism level, except critical price support is slightly lower at RM0.90 (trading above this level is relatively safer), compared to RM1 support of Top Glove.

5) Riverstone (SGX: AP4) – Singapore Giant Glove Stock

Among 5 giant glove stocks, Riverstone is the smallest player but it has its niche market. Riverstone manufactures cleanroom glove (eg. hard disk drive and semiconductor) and healthcare gloves, therefore the business is relatively stronger than other major players during post-pandemic.

Riverstone is a Malaysia company but stock is listed in Singapore, therefore the share price potential is also partially affected by Singapore stock market. Choice of stock exchange for listing does not affect the company fundamental (same share ownership) but due to different characteristic of global investors in each stock exchange (eg. US, Hong Kong, Singapore, Malaysia), etc, would make a big difference in share prices which is the ultimate goal for a company to be listed. 

Riverstone is also low Optimism level but positioning different from other 4 glove giant stocks. Since Riverstone did not fall as much as other glove giant stocks (mainly supported by stronger business), it is the only glove giant stock has not recovered yet to overcome S$0.65 resistance (to become future price support for trading). Riverstone may be considered for longer term investing (not for short term trading currently) with business trend affected by both glove industry (healthcare needs) and country economy (eg industrial needs).

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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.

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), 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

Dr Tee Stock Webinar
Filed Under: Market Outlook, Stock Market Tagged: , , ,

76 Singapore Commodity and Malaysia Plantation Stocks (天时地利)

Posted on March 31, 2022 Written by

Supply chain disruptions during pandemic has resulted in surging commodity prices (eg. palm oil and other agricultural products, crude oil, metals, etc). The situation becomes worst with recent Russia-Ukraine war, global inflations would be higher in near term, pushing commodity market to even higher optimism.

Instead of worrying about uncertain markets, a smart investor may consider strong commodity giant stocks with protection by rising commodity sector business, a natural way to hedge against high inflation with interest rate hike.

In this article, you will learn from Dr Tee on 76 Singapore Commodity and Malaysia Plantation 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 and high inflations. Bonus for readers who could read every word of the entire article, learning unique strategy to position in 6 Singapore and Malaysia commodity / plantation (mainly palm oil) giant 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:

3 Singapore Giant Commodity Stocks:

– Wilmar International (SGX: F34), Golden Agri Resources (SGX: E5H), First Resources (SGX: EB5)

3 Malaysia Giant Plantation Stocks:

– United Plantations (Bursa: 2089), Genting Plantations (Bursa: 2291), Kim Loong Resources (Bursa: 5027)


These stocks have plantations and processing factories mainly on palm oil and some also on other agricultural products (eg. sugar, wheat, seeds, etc). Singapore and Malaysia has the most number of palm oil giant stocks in the world with plantations mainly based in Malaysia and Indonesia.

The best time to invest in 35 Singapore commodity stocks and 41 Malaysia plantation stocks (total 76 stocks) 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 share price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). Commodity stock investing is not based on stock strategy (Buy Low Sell High) alone, may be integrated with dividend investing, growth investing, swing trading, momentum trading, cyclic investing, defensive investing and other Ein55 strategies.

More importantly, commodity stock investing has to be integrated with commodity market itself, eg, riding the uptrend of commodity prices. Since palm oil prices are at very high Ein55 Optimism over 75% (very bullish), most palm oil giant stocks are more suitable for short term to medium term trading, while a few could still be considered for longer term investing. So, alignment with short term prices by Technical Analysis is helpful (eg. ensure higher high and high low in share prices).

There are 76 Singapore commodity stocks and Malaysia plantation stocks (not all are giant stocks with Dr Tee criteria), based on the last price traded (30 Mar 2022), sorted by 3 key Fundamental Criteria:
1) ROE (a criteria for growth stocks, eg. ROE > 5%),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 3%),
3) Price-to-Book (PB) ratio, Price/NAV (a criteria for undervalue stocks, eg. PB < 1).

From the table sorted below, 50% (38/76 stocks) are undervalue (Price to Book ratio, PB < 1), mainly due to COVID-19 stock crisis, affecting commodity business with bearish share prices a few years ago but trend is reversed currently with bullish commodity market.  There are 64% (49/76 stocks) have growing businesses (over 5% ROE, Return on Equity) with rising commodity prices while only 18% (14/76 stocks) were making losses during pandemic in Year 2021. There are nearly 50% (37/76 stocks) were paying dividend but only 20 stocks (26%) having dividend yield over 3%, potential for dividend investing (higher dividend yield may not be better).

No76 SG+MY Commodity StocksROE (%)PBDY (%)
1Asia Enterprises (SGX: A55)3.90.65.1
2AsiaPhos (SGX: 5WV)-8332.511.3–
3Bumitama Agri (SGX: P8Z)16.71.43.2
4China Mining (SGX: BHD)27.30.5–
5CNMC Goldmine (SGX: 5TP)4.21.70.9
6Cosmo Steel (SGX: B9S)2.90.63.2
7Don Agro (SGX: GRQ)15.30.63.2
8First Resources (SGX: EB5)13.52.03.1
9Fortress Minerals (SGX: OAJ)37.73.02.2
10Geo Energy Resources (SGX: RE4)51.21.419.0
11Global Palm Resources (SGX: BLW)9.30.77.9
12Golden Agri-Resources (SGX: E5H)10.20.65.3
13Golden Energy (SGX: AUE)23.51.8–
14Halcyon Agri (SGX: 5VJ)0.60.6–
15HG Metal (SGX: BTG)10.90.59.7
16Indofood Agri (SGX: 5JS)6.50.52.0
17Intraco (SGX: I06)-1.60.7–
18Jawala (SGX: 1J7)14.21.12.7
19Kencana Agri (SGX: BNE)54.61.5–
20Mewah Intl (SGX: MV4)11.80.72.5
21MSC (SGX: NPW)20.33.11.6
22Nam Lee Metal (SGX: G0I)9.90.64.2
23NSL (SGX: N02)1.00.75.6
24Resources Global (SGX: QSD)40.01.02.5
25Samko Timber (SGX: E6R)-23.912.2–
26Shen Yao (SGX: A78)-42.91.4–
27Soon Lian (SGX: 5MD)17.00.51.7
28Southern Alliance (SGX: QNS)40.42.92.3
29Sri Trang Agro (SGX: NC2)34.00.915.8
30Union Gas (SGX: 1F2)26.64.32.4
31Union Steel (SGX: BLA)12.40.46.0
32USP Group (SGX: BRS)-5.70.2–
33VCPlus (SGX: 43E)-44.215.0–
34Wilmar International (SGX: F34)9.51.13.3
35Wilton Resources (SGX: 5F7)6.21.9–
36AASIA (Bursa: 7054)-3.40.4–
37BKAWAN (Bursa: 1899)18.11.64.2
38BLDPLNT (Bursa: 5069)10.31.30.3
39BPLANT (Bursa: 5254)8.90.8–
40CEPAT (Bursa: 8982)13.40.8–
41CHINTEK (Bursa: 1929)9.31.03.8
42DUTALND (Bursa: 3948)1.10.22.9
43FAREAST (Bursa: 5029)13.11.7–
44FGV (Bursa: 5222)21.51.3–
45Genting Plantations (GENP) (Bursa: 2291)8.41.5–
46GLBHD (Bursa: 7382)-4.90.3–
47GOPENG (Bursa: 2135)-0.90.6–
48HARNLEN (Bursa: 7501)-7.10.6–
49HSPLANT (Bursa: 5138)11.91.16.7
50INCKEN (Bursa: 2607)-2.00.3–
51INNO (Bursa: 6262)26.82.6–
52IOICORP (Bursa: 1961)13.92.52.6
53JTIASA (Bursa: 4383)2.80.8–
54Kim Loong Resources (KMLOONG) (Bursa: 5027)12.72.33.5
55KLK (Bursa: 2445)19.02.24.0
56KLUANG (Bursa: 2453)4.60.40.8
57MALPAC (Bursa: 4936)4.30.5–
58MATANG (Bursa: 0189)1.80.82.2
59MHC (Bursa: 5026)14.70.8–
60NPC (Bursa: 5047)2.10.4–
61NSOP (Bursa: 2038)4.30.5–
62PINEPAC (Bursa: 1902)-5.00.3–
63PLS (Bursa: 9695)5.11.4–
64RSAWIT (Bursa: 5113)-1.91.3–
65RVIEW (Bursa: 2542)6.00.6–
66SBAGAN (Bursa: 2569)7.20.32.2
67SHCHAN (Bursa: 4316)38.00.5–
68SIMEPLT (Bursa: 5285)14.92.3–
69SOP (Bursa: 5126)18.21.1–
70SWKPLNT (Bursa: 5135)19.01.1–
71TAANN (Bursa: 5012)17.81.4–
72TDM (Bursa: 2054)-4.40.7–
73THPLANT (Bursa: 5112)10.81.2–
74TSH (Bursa: 9059)10.31.4–
75UMCCA (Bursa: 2593)1.00.81.8
76United Plantations (UTDPLT) (Bursa: 2089)19.42.36.3

However, not all the 76 Singapore Commodity and Malaysia Plantation stocks listed are giant stocks. A growing business in the past may not be sustainable during COVID-19 period and an undervalue stock may remain lagging in share prices for many years, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a low PB or low PE or high dividend yield stock may be a value trap as this may be the result of lower share price with weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies. 

Let’s learn these 6 commodity and plantation giant stocks (mainly related to palm oil) in Singapore and Malaysia, understanding the business nature, investment clock and unique strategy.

1) Singapore Commodity Giant Stock – Wilmar International (SGX: F34)

Among the 6 giant stocks studied, Wilmar has the largest market cap (about 10 times more relative to others), also the 6th largest stock in 30 STI component stocks. A giant is not defined by the size, even small cap stock could be a giant stock based on Dr Tee criteria.

The IPO of Wilmar subsidiaries in China and India help Wilmar to grow its market value further. Major shareholder is PPB Group (Bursa: 4065), Perlis Plantations Berhad, controlled by Kuok Family (led by Robert Kuok, the richest person in Malaysia). This is additional bonus with such a strong sponsor.

Wilmar has stronger business, mainly supported by higher commodity prices (eg. palm oil and sugar, etc). However, due to too bullish palm oil prices, when high inflation is tamed in future, it may affect its cyclic stock prices. Therefore, currently Wilmar (as well as other 5 giant stocks studied) is more suitable for short to medium term trading until the commodity market falling down from high optimism one day (likely triggered by another Black Swan).

Wilmar is still at moderate low Ein55 Optimism (<50%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $6/share (about 30% potential upside in medium term). The stock is well balanced, suitable for growth investing (Buy & Hold), cyclic investing (Buy Low Sell High) or even dividend investing (about 3% dividend yield).

2) Singapore Commodity Giant Stock – Golden Agri Resources (SGX: E5H)

Golden Agri Resources is a very cyclic stock, share prices has been bearish over the past 10 years (2010-2020, suitable for shorting then), incurring big loss for long term investors. The business is also more cyclic in nature, currently having upside potential with rising palm oil prces.

Crisis (eg. lower share prices) is an opportunity only for a giant stock. Despite Golden Agri does not have very strong business, its foundation is good, able to recover in share prices after 10 years of “winter” for business and stock prices.

Golden Agri is still at moderate low Ein55 Optimism (about 30%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $0.60/share (about 2X potential upside but at the price of relatively higher risk). The stock is more suitable for cyclic investing (Buy Low Sell High), aligning with palm oil optimism until the bull market has ended.

3) Singapore Commodity Giant Stock – First Resources (SGX: EB5)

First Resources is relatively smaller stock but it is also a giant stock, more suitable for shorter term trading as Ein55 Optimism is at fair price (about 50%). The share price is recovering well from low in pandemic, aiming for short term trading.

The stock is more suitable for swing trading (Buy Low Sell High in weeks or months) or momentum trading (Buy High Sell Higher with price breakout), aligning with palm oil optimism until the bull market has ended. Alignment with short term prices by Technical Analysis is helpful (eg. ensure higher high and high low in share prices).

4) Malaysia Plantation Giant Stock – United Plantations (Bursa: 2089)

United Plantations is a rare giant stock suitable for long term investing (having over 100 years of history with Danish management for several generations in Malaysia). The parent company (UIE) is listed in Denmark, the close connection with Europe market also helps in its business positioning, especially with tighter Europe regulations for palm oil products.

United Plantations has relatively stronger and more defensive business than other peers in the same sector. Therefore, it is one of the few giant commodity stocks which may be considered for long term investing, in addition to short term trading, despite operating under a cyclic commodity market.

United Plantations is at low Ein55 Optimism (<25%) but recovering steadily from low in pandemic, aiming for Ein55 intrinsic value of over $20/share (about 40% potential upside). The stock is more suitable for mudium to long term investing (Buy Low Sell High), entry with consideration of short term trading is helpful to avoid price correction.

5) Malaysia Plantation Giant Stock – Genting Plantations (Bursa: 2291)

Genting Plantation is under Genting Berhad (Bursa: 3182), a giant group under severe crisis during pandemic (casino, cruise, hotel, plantations, etc).  However, the strong foundation of parent company has helped to support subsidiaries (except for Genting Hong Kong with cruise business).

As a result, Genting Plantations is suitable for Crisis Investing to Buy Low Sell High, leveraging on very low prices with calculated risks. This is comparable with stock investing in Golden Agri, higher risk for higher gains (Genting Plantations is stronger than Golden Agri for relative business comparison).

Genting Plantations is still at low Ein55 Optimism (<25%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $17/share (about 2X potential upside but at the price of relatively higher risk). The stock is more suitable for cyclic investing (Buy Low Sell High), aligning with palm oil optimism until the bull market has ended.

6) Malaysia Plantation Giant Stock – Kim Loong Resources (Bursa: 5027)

Kim Loong Resources has strong business performance, comparable with United Plantations. It is smaller in size but a strong giant stock internally. However, due to relatively higher optimism than United Plantations, Kim Loong is more suitable for short trading or medium term investing.

Kim Loong Resources is at moderate high Ein55 Optimism (>50%, exceeding Ein55 intrinsic value). The share price is recovering well from low in pandemic, aiming for short term trading.

The stock is more suitable for swing trading (Buy Low Sell High in weeks or months) or momentum trading (Buy High Sell Higher with price breakout), aligning with palm oil optimism until the bull market has ended. Alignment with short term prices by Technical Analysis is helpful (eg. ensure higher high and high low in share prices).

===================================

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.

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), 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

Dr Tee Stock Webinar

Filed Under: Fundamental Analysis, Market Cycle Investing, Market Optimism, Stock Market Tagged: , ,

134 Singapore Property Stocks with Discounted NAV Strategy (为善最乐)

Posted on May 9, 2021 Written by

In recent Ein55 Charity Course on Global Discounted NAV (DNAV) Stocks, we have raised fund of $24,488 to help needy families in Singapore. Under the spirit of charity, Dr Tee decides to share 134 Singapore Property Stocks and 3 global DNAV stocks in 3 countries with readers (detailed strategies including Ein55 Optimism levels, Ein55 intrinsic values and DNAV will be shared):

1) Singapore DNAV Stock – Hongkong Land (SGX: H78)

2) Malaysia DNAV Stock – Paramount (Bursa: 1724)

3) Hong Kong / China DNAV Stock – Yuexiu Property (HKEx: 123)

Dr Tee, Ein55 Mentors & Graduates have together organized 11 charity investment courses (REITs in Nov 2015, May 2017 and May 2019, High Dividend Stocks in Mar 2016, Oct 2017 and Nov 2019, Global Growth Stocks in Apr 2018 and Nov 2020, and Discounted NAV Stocks in Sep 2016, Nov 2018 and May 2021) in the past 6 years, donating net income of around $222,000 to Tzu Chi 慈济 Singapore.

We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future (为善最乐).

Discounted Net Asset Value (DNAV) Strategy is valuation of company business, firstly based on the Net Asset Value (NAV) listed in current Balance Sheet. Then, we determine the net cash that would be received if all assets were sold and liabilities paid off.  Various discounts will be applied based on different quality of asset classes.  It is safer to buy stock with share price below the Discounted NAV (much more conservative than price below NAV or Price-to-Book ratio, PB < 1). Unlike PB method mainly applied for asset rich company (eg. property stocks), DNAV method can be applied in non-property or not cash-rich stocks. However, Ein55 Optimism strategies have to be integrated to avoid value trap, i.e. Buy Low Get Lower for undervalue stocks.

The best time to buy global DNAV stocks and 134 Singapore property stocks 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 share price), also could have higher potential of capital gains (when market cycle moves from fear in low optimism to greed in high optimism). Singapore property stock investing is not based on undervalue strategy (Buy Undervalue Sell Overprice) alone, may be integrated with dividend investing, growth investing, swing trading, momentum trading, cyclic investing, defensive investing and other Ein55 strategies.

There are 134 Singapore property stocks (not all are giant stocks with Dr Tee criteria), based on the last price traded (7 May 2021), sorted by 3 key Fundamental Criteria:
1) ROE (a criteria for growth stocks, eg. ROE > 5%),
2) Dividend Yield, DY (a criteria for dividend stocks, eg. DY > 3%),
3) Price-to-Book (PB) ratio, Price/NAV (a criteria for undervalue stocks, eg. PB < 1).

From the table sorted below, over 75% (101/134 stocks) are undervalue (Price to Book ratio, PB < 1), mainly due to COVID-19 stock crisis, affecting property construction business with bearish share prices but property asset valuation remains stable.  There are only 20% (27/134 stocks) have growing businesses (over 5% ROE, Return on Equity) while over 50% (72/134 stocks) were making losses during pandemic in Year 2020. There are nearly 50% (62/134 stocks) were paying dividend but only 22 stocks (16%) having dividend yield over 3%, potential for dividend investing.

No134 SG Property StocksROE (%)PBDY (%)
13Cnergy (SGX: 502)–1.1–
2A-Smart Holdings (SGX: BQC)0.8521.8–
3AEI Corporation (SGX: AWG)–2.6–
4Aims Property Securities Fund (SGX: BVP)–0.41.9
5Asia-Pacific Strategic Investments (SGX: 5RA)–0.8–
6APAC Realty (SGX: CLN)10.621.15.1
7Abterra (SGX: L5I)50.492.1–
8Acromec (SGX: 43F)–1.9–
9Alset International (SGX: 40V)53.451.1–
10Amara Holdings (SGX: A34)–0.5–
11Amcorp Global (SGX: S9B)–0.6–
12AnnAik (SGX: A52)0.2940.31.8
13Astaka Holdings (SGX: 42S)–5.5–
14BBR Holdings (SGX: KJ5)–0.5–
15BRC Asia (SGX: BEC)7.6931.31.3
16Blackgold Natural Resources (SGX: 41H)–––
17Boldtek Holdings (SGX: 5VI)–0.7–
18Bonvests (SGX: B28)–0.50.3
19Boustead Singapore (SGX: F9D)9.011.42.9
20Boustead Projects (SGX: AVM)7.4691.10.8
21Bukit Sembawang Estates (SGX: B61)5.7480.90.9
22Bund Center Investment (SGX: BTE)2.1970.97.3
23CSC Holdings (SGX: C06)4.5310.4–
24CapitaLand (SGX: C31)–0.82.5
25CASA Holdings (SGX: C04)2.6380.35.6
26Chemical Industries (Far East) (SGX: C05)2.7820.42.1
27China International Holdings (SGX: BEH)14.620.39.1
28China Yuanbang Property Holdings (SGX: BCD)5.9910.1–
29Chip Eng Seng Corporation (SGX: C29)–0.44.4
30City Developments (SGX: C09)–0.91.0
31DISA (SGX: 532)–4.3–
32Debao Property Development (SGX: BTF)–0.1–
33ETC Singapore (SGX: 1C0)–0.3–
34Edition (SGX: 5HG)–1.6–
35Engro Corporation (SGX: S44)8.5630.62.0
36Fraser and Neave – F & N (SGX: F99)5.0260.73.5
37Far East Orchard (SGX: O10)0.1240.42.6
38Figtree Holdings (SGX: 5F4)–0.52.9
39First Sponsor Group (SGX: ADN)5.9960.82.2
40Fragrance Group (SGX: F31)0.1330.6–
41Frasers Property (SGX: TQ5)1.4770.50.9
42GYP Properties (SGX: AWS)–0.4–
43Gallant Venture (SGX: 5IG)–0.9–
44Golden Energy and Resources (SGX: AUE)2.1010.7–
45Goodland Group (SGX: 5PC)–0.31.0
46GuocoLand (SGX: F17)2.2340.53.6
47HL Global Enterprises (SGX: AVX)0.2630.4–
48Hatten Land (SGX: PH0)–0.9–
49Heeton Holdings (SGX: 5DP)–0.2–
50Hiap Hoe (SGX: 5JK)–0.40.8
51Hiap Seng Engineering (SGX: 510)–––
52Ho Bee Land (SGX: H13)3.7820.52.9
53Hock Lian Seng Holdings (SGX: J2T)2.080.61.0
54Hong Fok Corporation (SGX: H30)–0.31.2
55Hong Lai Huat Group (SGX: CTO)–0.3–
56Hong Leong Asia (SGX: H22)5.3120.81.0
57Hongkong Land Holdings (SGX: H78)–0.34.5
58Hor Kew Corp (SGX: BBP)0.8610.2–
59Huationg Global (SGX: 41B)–0.2–
60Hwa Hong Corporation (SGX: H19)2.2211.03.3
61IPC Corporation (SGX: AZA)–0.2–
62ISOTeam (SGX: 5WF)–1.1–
63Imperium Crown (SGX: 5HT)–0.2–
64Jasper Investments (SGX: FQ7)–––
65KOP (SGX: 5I1)–0.4–
66KSH Holdings (SGX: ER0)4.7570.66.0
67Keong Hong Holdings (SGX: 5TT)–0.4–
68Keppel Corp (SGX: BN4)–0.91.9
69Keppel Reit (SGX: K71U)–0.94.4
70King Wan Corporation (SGX: 554)0.7530.2–
71Koh Brothers Group (SGX: K75)–0.2–
72Koon Holdings (SGX: 5DL)–––
73KORI Holdings (SGX: 5VC)0.8520.3–
74LHN (SGX: 41O)19.850.94.7
75Ley Choon Group (SGX: Q0X)–1.1–
76Lian Beng Group (SGX: L03)4.060.32.0
77Low Keng Huat (Singapore) (SGX: F1E)7.0070.55.1
78Lum Chang Holdings (SGX: L19)–0.63.3
79Luminor Financial Holdings (SGX: 5UA)–0.5–
80MYP (SGX: F86)–0.4–
81Metro Holdings (SGX: M01)2.150.42.7
82OIO Holdings (SGX: KUX)–––
83OKH Global (SGX: S3N)–0.3–
84OKP (SGX: 5CF)2.6960.53.8
85OneApex (SGX: 5SY)–1.1–
86Oxley Holdings (SGX: 5UX)–1.03.3
87PSL Holdings (SGX: BLL)–0.3–
88Pacific Century Regional Development (SGX: P15)–1.08.7
89Pacific Star Development (SGX: 1C5)–––
90Pan Hong (SGX: P36)15.440.52.4
91Pavillon Holdings (SGX: 596)–0.4–
92Pollux Properties (SGX: 5AE)0.0960.6–
93PropNex (SGX: OYY)34.44.94.9
94Raffles Infrastructure Holdings (SGX: LUY)13.350.5–
95Regal International Group (SGX: UV1)15.284.3–
96Renaissance United (SGX: I11)–0.3–
97Rich Capital Holdings (SGX: 5G4)–1.4–
98Roxy-Pacific Holdings (SGX: E8Z)–1.0–
99Ryobi Kiso (SGX: BDN)–2.2–
100SHS Holdings (SGX: 566)–0.8–
101SLB Development (SGX: 1J0)6.8380.63–
102SP Corporation (SGX: AWE)2.4590.38–
103Sasseur Reit (SGX: CRPU)4.2541.017.06
104Second Chance Properties (SGX: 528)1.7860.781.61
105Sin Heng Heavy Machinery (SGX: BKA)1.0630.331.54
106Sinarmas Land (SGX: A26)3.5450.430.32
107SingHaiyi (SGX: 5H0)–0.46–
108SingHaiyi Group (SGX: 5IC)5.3190.492.63
109Singapore Land Group (SGX: U06)1.230.531.28
110Sinjia Land (SGX: 5HH)–0.95–
111Soilbuild Construction (SGX: S7P)–0.75–
112Straits Trading (SGX: S20)3.3470.712.22
113Sysma Holdings (SGX: 5UO)2.1210.59–
114TA Corporation (SGX: PA3)–0.38–
115T T J Holdings (SGX: K1Q)–0.4212.614
116Tai Sin Electric (SGX: 500)5.3640.8164.348
117Thakral Corporation (SGX: AWI)4.4180.4076.522
118Thomson Medical Group (SGX: A50)–4.946–
119Tiong Seng Holdings (SGX: BFI)–0.2991.562
120Top Global (SGX: BHO)–0.531–
121Tosei Corporation (SGX: S2D)6.1090.5832.585
122Tritech Group (SGX: 5G9)–1.063–
123United Overseas Australia – UOA (SGX: EH5)6.4010.7292.678
124UOL Group (SGX: U14)0.1340.6562.3
125USP Group (SGX: BRS)–0.204–
126Vibrant Group (SGX: BIP)2.4560.307–
127Wee Hur Holdings (SGX: E3B)6.810.4512.439
128Wing Tai Holdings (SGX: W05)0.0880.4541.593
129Yanlord Land Group (SGX: Z25)8.3060.4284.857
130Yeo Hiap Seng (SGX: Y03)–0.8922.21
131Ying Li International Real Estate (SGX: 5DM)–0.391–
132Yoma Strategic Holdings (SGX: Z59)–0.405–
133Yongmao Holdings (SGX: BKX)7.6820.3590.309
134Yongnam Holdings (SGX: AXB)–0.308–

However, not all the 134 Singapore property stocks listed are giant stocks. A growing business in the past may not be sustainable during COVID-19 period and an undervalue stock may remain lagging in share prices for many years, could end up as a crisis stock. Fundamental Analysis alone is not sufficient, a low PB or low PE or high dividend yield stock may be a value trap as this may be the result of lower share price with weakening businesses. Therefore, deeper analysis is required with LOFTP (Level, Optimism, Fundamental, Technical, Personal Analysis) Strategies. 

Let’s learn these 3 global Discounted NAV giant stocks in 3 countries, understanding the business nature, investment clock and unique strategy.

1) Singapore DNAV Stock – Hongkong Land (SGX: H78)

Hongkong Land is part of Jardine Group with over 100 years of history. It has property businesses mainly in Hong Kong, China and Singapore with 61% in investment properties (main source of rental income) and 39% in development properties. The West Bund project in Xuhui Shanghai of China would be major revenue contributor in the next few years.

Hongkong Land is still at low Ein55 Optimism (<25%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $9/share. This stock has Discounted NAV of $15/share (close to NAV, implying very high quality of its asset), providing high safety of margin for long term investors with stable dividend payment (about 4-5% dividend yield, depending on entry price). Assuming extreme devaluation of Hong Kong property market by 50%, Hongkong Land would still have $7.50/share value for very conservative investors.  The “loss” of Hongkong Land in Year 2020 is mainly accounting loss due to devaluation of property but cashflow is still strong to support the dividend payment, behaving as if a REIT.

Recent acquisition of parent company, JSH (SGX: J37) by JMH (SGX: J36), has helped to support the prices of other stocks in Jardine group including Hongkong Land.  Jardine Group may have more corporate actions in future to release the hidden value of subsidiary stocks including Hongkong Land, Jardine Cycle & Carriage – JCC (SGX: C07), Dairy Farm International (SGX: D01) and Mandarin Oriental Hotel (SGX: M04). However, the recovery pattern of share prices for undervalue stock can be different from growth stocks. Hongkong Land is more suitable for long term investors with patient, positioning as a mid-fielder stock, good balance between capital gains and dividend as passive income.

Readers may read earlier articles (during pandemic with low optimism prices) by Dr Tee for more details on Jardine Group of stocks including Hongkong Land:
https://www.ein55.com/tag/jardine/

2) Malaysia DNAV Stock – Paramount (Bursa: 1724)

Paramount is a Malaysia property development stock with 50 years of history in businesses. After divestment of education segment business, Paramount has drawn up a new 5-year (2020 – 2024) strategic roadmap to focus on Property development and concentrate on landed developments and integrated developments in Malaysia. In the next 5 years, Paramount plans to venture into overseas property development projects, expecting to contribute approximately 10% of the Group’s revenue. It enjoys recurring income from investment property and minority interest in education business.

Paramount is still at low Ein55 Optimism (<25%) but recovering well from low in pandemic, aiming for Ein55 intrinsic value of about $1.20/share. This stock has Discounted NAV of $2.17/share (20% lower than NAV, partly due to lower value of non-property business), providing high safety of margin for long term investors with stable dividend payment (about 4-5% dividend yield, depending on entry price). Assuming extreme devaluation of Malaysia property market by 50%, Paramount would still have $1.08/share value for very conservative investors.

Malaysia property stock investing is complicated by worse pandemic condition, political instability and weaker consumer purchasing power. Paramount is more suitable for long term investors with patient, positioning as a mid-fielder stock, good balance between capital gains and dividend as passive income.

Readers may read earlier article (during pandemic with low optimism prices) by Dr Tee for more details on other Malaysia stock affected by pandemic:
https://www.ein55.com/tag/malaysia-stocks/

3) Hong Kong / China DNAV Stock – Yuexiu Property (HKEx: 123)

Yuexiu Property is a China property developer company (state-owned enterprise), originated in Guangzhou, expanding property businesses to other 19 cities in China. In 2019, Guangzhou Metro (another state-owned enterprise) becomes the second largest investor of Yuexiu Property, deepening the strategic collaboration between 2 giants (transportation and property).

Yuexiu Property is at moderate low Ein55 Optimism of about 40%, near to Ein55 intrinsic value of $2.20. This stock has Discounted NAV of $1.27/share (much lower than its NAV), higher than its current share price, therefore no safety of margin for very conservative investors. Yuexiu Property may still be considered for growth investing with dividend payment (about 6-7% dividend yield, depending on entry price). Trend-following strategy with S.E.T. (Stop Loss, Entry, Target Prices) trading plan may be integrated into stock investing without DNAV protection.

Yuexiu Property belongs to Yuexiu Group, which also owns 2 other subsidiary stocks, Yuexiu Reit (HKEx: 405) and Yuexiu Transport Infrastructure (HKEx: 1052) which may also be considered for dividend stock investing. Major shareholder and sponsor is Guangzhou local government, providing strong support to Yuexiu Group of stocks.

Readers may read earlier articles by Dr Tee for more details on other global and local property stocks including but not limited to Yuexiu Property:
https://www.ein55.com/category/property-market/

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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.

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.

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

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5 Genting Group Casino Stocks (神机妙算)

Posted on April 30, 2020 Written by
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.

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