Total Portfolio Review for 2022

 

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Property investment

I have been updating my property investment journey since 2019 because it is my biggest one time investment in term of quantum. After the purchase in 2019, the unit is rented out one day after the completion date on 10th May 2019 till now. The rental has been incrementally increasing for every tenancy renewal. Total gross rental received till date is S$125,800. 

To be conservative after deducting the property tax, mcst and interest cost. I give a rough estimate of ard $106,930(85% of gross) net rental received.

In terms of full year 2022, we have received a total net rental of S$26,520(85% of gross rental). As we have signed a two years tenancy, I am confident that next years renewal will have a larger increase in rental rate due to the discrepancy of current market rate to ours.

Capital appreciation wise, YTD price has increased from 1,206 psf to 1,562 psf. Which equates to a S$367,748 capital gain. This means a capital appreciation of 31%(base on cost price) in 2022 alone.

Total gain (rental + capital) for 2022: S$394,268(33.3%)

Total gain (rental + capital) since purchase: S$535,625(45.2%)

This means the bulk of my gain comes in 2022 this year and as you can see, majority of the transactions done in Glendale this year is above 1,500 psf so its likely not a one off spike up but rather a gradual price discovery. Our loan interest is still at 1.5% pa (renewed last year for a 5 years duration), the interest can be comfortable offset using my wife's cpf oa. Can read more about this here.

The completion date was 9th May 2019. Means three years 7 months have passed. This means a rough annualized gain of 12.6% for my property investment.

Stocks investment

For 2022:

XIRR: -15%

Total PnL: -S$70,000

Portfolio value: S$411,000

No surprise here, my portfolio is purely in the HK market. China tech and property sectors have undergone two years of subprime bear like crisis. Blue chip tech stocks with very strong balance sheet have tanked 70-80%. Both external and internal risk are at inhumane level. This kind of collapse only investors who are blatantly honest and sure with their pick and themselves will continue to average down. 

Will talk about my top four holdings briefly:

Alibaba: 

Mentioned before this company owns a lot of hidden assets that the market still doesn't recognize. Current 224bil market cap after you deduct their net cash/equity investments and Alicloud stake, the rest becomes free. Close to 10% fcf yield, 15-20bil usd of fcf annually(less than 10 companies in the world can achieve this). Buyback plan of 20% enterprise value. Largest buy back in terms of quantum and percentage of enterprise in Chinese stock market history.

Tencent:

Almost in the green for this investment. More expensive than Alibaba, but more opmi friendly. Meituan scrip dividend will be ex next month. HK124 per share of listed and unlisted investments. Management is willing to unlock investments and reward shareholders. In the past, they have given out China Literature, Tencent Music, JD.com and now Meituan to share holders. Company also pays a small cash dividend yearly as a token to show that its cash is real. 

Kingsoft:

Part of the 信创 stock that I feel is pretty undervalued. This company owns 52.69% of the Shanghai listed Beijing Kingsoft Office(WPS) which is valued at 16.24bil usd. Means Kingsoft stake in WPS is worth 8.56bil usd. It also has a net cash of 2.45bil usd. But its current market cap is only worth 4.28bil usd. 

Microsoft is the largest and the only competitor to WPS. WPS currently has a smaller share of wallet, but due to the government’s focus on China localization, there will be significant share gain opportunities over the next five years. For example, with a large government SOE, Microsoft is currently 80% of their budget with the remaining going to WPS. I expect that within five years, WPS will represent over 80%+ of their budget.

AAG:

Up more than 30% from cost due to high possibility of privatization. Low single digit pe growing at 40% top and bottom line. Substantial discount to its nav even though the assets are unencumbered and tough work has already been front loaded. Most advance natural gas site with high yields. The assets that they own are gems especially at this time when natural gas are used for EV charging and household utilities. 

AAG clearly stated in the performance meeting last year that it kept cash and paid less dividends, because it had an acquisition target, but it has not been announced. Now we see the parent approving a 3billion rmb investment injection into their subsidiary which previously did an offer on AAG 4 years ago. The chance of privatization is high have to wait and see. 

Total Portfolio gain for 2022: 

S$394,268 - $70,000 = S$324,268(20.3%)