Portfolio Review for CNY 2021

 

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For my previous portfolio review click here

YTD(2021) I have made a total profit of S$100,926.24 from my equity investments(predominantly in HK) with an XIRR of 2,562.89%(XIRR is annualized). From my 6 years of tracking, I have made a total of S$200,568.90 from this portfolio alone.

In terms of benchmarking with STI, HKSE and World index, I seem to have made further improvements in 2021. I have started to outperform the World index. 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 25 stocks):

Transactions:

Initiated a position in GDS(HK:9698)

Commentary: 

The persistent HK tech bull run continues. Those who have not read my post on HK tech bull can click here. 

Market starts to realize obscure illiquid enterprise cloud counters like Inspur and Chanjet. As of today, I have five counters exceeding 100% profit in my portfolio. Chanjet(175%), XD(206%), Inspur(136%), Weimob(188.27%) and China Youzan(134%). Even obscure net net China property agency stock: Hopefluent(HK:733) saw a strong rise.

I had a quick discussion in a telegram group regarding value. The traditional value investing which looks at internal metric might not actually perform well over the long term. I owned a few net net stocks in the past which only gave me performance when their value are unlocked via privatization or via large cash payout: 

• Wheelock SG
• Keppel T&T
• Cross-harbour
• LTC
• Oriental Watch
• Clear Media

A few net net counters that I currently own:

• Cosco Intl(HK:517)
• Qingling(HK:1122)
• Hopefluent(HK:733)
• Haw Par(SG:H02)
• Emperor E(HK:296)

Zhang Lei of Hillhouse gave a different perspective on this. His version of value means creating value for society every moment of its existence. Looking at value externally not internally. Companies that are of deep value but not in a good track and not have an expanding DNA will not create long term value for their shareholders. He was the earliest investor in Tencent and JD. His fund is one of the most profitable in the world giving an annualized return of 50% since its inception. 

The concept of net net is appealing because net net means total cash net off total liabilities > market cap. Ie, company's worth is only represented by a portion of its cash. Margin of safety is extremely high. If we incorporate Zhang Lei's version, we have to take note of the companies track and whether or not its purpose of existence is creating value to society every step of the way. A 20x price to sales company might befuddle value investors, but what if its growing at a 5 years revenue CAGR of 90%? Or its monetization phase is still at infant level? The digital track, be it cloud, mobile or ecommerce is befuddling because the amount of internal scaling is beyond believable. It transcends population size due to the amount of layers these technology can sell to a single person. The speed of monetization is also rapidly increasing due to 5G adoption. 

Its good to be aware of this. For me I try to own a mixture of both and try to be cognizant of their valuation and track potential. Tencent was only a few cents in 2007 and now its worth 757HKD per share. The debate between value and growth is interesting and deserve further discussion.