Portfolio Review for February 2021

 

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For my previous portfolio review click here

YTD(2021) I have made a total profit of S$62,784.49 from my equity investments(predominantly in HK) with an XIRR of 335.11%(XIRR is annualized). From my 6 years of tracking, I have made a total of S$162,427.14 from this portfolio alone.


In terms of benchmarking with STI, HKSE and World index. There was a substantial pullback recently due to inflation and interest rate worries. The large difference between my XIRR and TWR is due to XIRR being annualized in nature and the drastic price appreciation of some of my stocks recently.

Portfolio composition(4 index etfs and 26 stocks):

Transactions:

Reduced 12% of Chanjet(HK:1588) at 178% gain

Reduced 13.3% of Inspur(HK:596) at 148% gain

Reduced 14.3% of XD(HK:2400) at 214% gain

Sold all Wharf Reic(HK:1997) at 30% gain

Sold all Shunho Holdings(HK:253) at 47% loss

Initiated a 3.4% position in Vobile(HK:3738)

Initiated a 3.13% position in Kingsoft(HK:3888)

Commentary: 

As mentioned in my previous post here. I have rebalanced my top three counters. I sold all of my Wharf Reic as its share price has moved up quite drastically faster than its fundamentals. I also sold Shunho Holdings which is only around 1.4% weightage in my portfolio. Even though it is still of immense value, the crossholding structure and passivity of the founder is quite worrying.

I used the proceeds from the sale of Wharf Reic and Shunho Holdings and bought into Vobile at $29 after a 40% drop from its peak and Kingsoft at $60.8 after a 27% drop from its peak. 

I did mentioned previously on my January portfolio review here that these two stocks were in my watchlist. 

Kingsoft(HK:3888) is a software company led by Lei Jun the founder of Xiaomi and backed by Tencent. Their WPS which is a competitor to Microsoft Office has been competing with Microsoft in China for over 20 years. Like Microsoft, it has recently transitioned to a Cloud service Saas model and growing quite aggressively. Kingsoft Software and Kingsoft Cloud are spun off from Kingsoft recently and it is now flooded with cash. 


As you can see from this sum of parts breakdown. This holding company is still grossly underestimated with a total market cap of only 47% of their listed subsidiaries. Lei Jun puts WPS in every Xiaomi phone, this gives WPS an advantage with a baked in increase in potential user base.

Vobile(HK:3738) is a SaaS industry leader around the world in content recognition, protection, monetization, and marketing.  It is the only listed company on HKSE that deals with copyright protection. 


Vobile service the world’s largest distribution platforms, film studios, TV networks, sports leagues, music labels, and other content owners. Intellectual property protection has reached an unprecedented height in China and the US. With the growth of user generated platforms like YouTube, Tiktok, Facebook and professional rights holders like Netflix, Disney plus and HBO Max. This company will be riding the trend of digital copyright protection through their advance algorithm. 

The company is deemed a technology innovator and was recognized in 2017 by the Emmy Awards for Technology and Engineering. Vobile has implemented a number of important strategies and financial indicators in 2020, including the acquisition of Verance Corporation’s video watermarking patents and technologies, which will help Vobile provide existing and potential customers with a wider range of products and services.

All these measures have strengthened the confidence in Fubo. It is expected that the group's revenue will reach 135 million US dollars in 2022, and the earnings per share will be approximately 0.06 US dollars. As more and more people spend more time online and on-demand video sites based on advertising revenue such as YouTube continue to grow, the demand for monetization of content sites will continue to grow.

With the recent stake purchase by AntChain(Subsidary of Ant Group), a blockchain ecosystem might be possible. Come to think of it, it is the most suitable technology to incorporate blockchain. Under the background of vigorously promoting the protection of intellectual property rights in China, Ant has enough motivation to develop the copyright business of Antchain. I believe that with the rapid development of the AntChain copyright business, the revenue potential from the AntChain business may also be quickly verified.

I will go deeper into these two companies later on. 


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