Portfolio Review for 8th September 2021

 

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For my previous portfolio review click here

YTD(2021) I have made a total profit of S$22,052.38 from my equity investments(predominantly in HK) with an XIRR of 10.42%(XIRR is annualized). From my 6 years of tracking, I have made a total of S$121,695.03 from this portfolio alone.


The China anti-trust/monopoly crackdown has shocked the market and caused massive irrational selling, especially in the tech sector which I am most vested in. The selling might be showing signs of bottoming these few days, but one can not be completely certain.

Articles like this is giving confidence back to the capital markets. CCP actually wants to open up its capital markets more to foreign investors. If you have tracked the pulse of the market, many stocks on HKSE are being connected to Shenzhen and Shanghai. This means the VIE structure is here to stay as gradually and ultimately, most of the domestic Chinese will own shares of VIE structure on HKSE. 

Portfolio composition(1 index etfs and 23 stocks):


Recent Transactions:

Sold all Cosco Intl HK(HK:517) for 37.26% profit

Sold all Qingling(HK:1122) for 20% profit

Sold all Xinyi Energy(HK:3868) for 33.21% profit

Sold all Teladoc(US:TDOC) for 9% profit

Sold all Tracker Fund(HK:2800) for 23.32% profit

Sold all APT Satellite(HK:1045) for 0.84% profit

Sold all Fu Shou Yuan(HK:1448) for 6% profit

Sold all Netease(HK: 9999) for 5.05% profit

Sold all Sinopec(HK:386) for -2.97% loss


Initiated a 4% stake in Tencent(HK:700) 

Initiated a 5.86% stake in Kuaishou(HK:1024)

Initiated a 3.93% stake in AK Medical(HK:1789)

Initiated a 4.29% stake in Tencent Music(US:TME)

Initiated a 3.04% stake in IQIYI(US:IQ)


Added more Central China New Life(HK:9983) to 3.02% of port

Added more JDHealth(HK:6618) to 4.41% of port

Added more Weimob(HK:2013) to 6% of port

Added more China Youzan(HK:8083) to 6.6% of port

Added more Kingsoft(HK:3888) to 5.04% of port

Added more Chanjet(HK:1588) to 3.83% of port

Added more Haidilao(HK:6862) to 3.61% of port

Added more GDS(HK:9698) to 5.34% of port

Added more XD(HK:2400) to 3.38% of port

Added more Alibaba(HK:9988) to 5.87% of port

Added more Ishare HSTech ETF(HK:3067) to 3.86% of port

Commentary:

This past two months gave me the opportunity to take profit for my net net value investments and buy more into higher conviction Chinese tech stocks that have been brutally sold down. I also swapped Netease with Tencent seeing that the latter has dropped more severely and is more diversified. Tencent has also been aggressively buying back their own shares daily. In terms of gaming wise, I prefer Tencent more because games like Honor of Kings and Wild Rift/League of Legends(from their controlling stake in riot) has unlimited lifespan and is extremely popular world wide and in China. Tencent has dropped to a level where a slight premium to its price to fcf against Netease is warranted seeing both the quality of assets and moat are superior to Netease.

Inspur(HK:596) continues to trend higher. Even at the current price, its still the cheapest Saas company in China in terms of price to sales. With no government policy risk(state owned) and the recent announcement of certain states asked to transfer state owned enterprise cloud out from private and into government run cloud, the growth prospect of this third largest cloud company in China looks promising. The risk I see is their cloud conversion is slow as they still focusing very much on growing their enterprise software and not like Chanjet which has stopped their enterprise segment and focused on cloudification which they have reached 85% of revenue now.

Kingsoft(HK:3888). It is obvious that this holding company is trading at a big discount compared to its sum of parts. Their WPS business which is listed on Shanghai has a market capitalization of HK$139.2 billion. KingSoft has a 50.1% stake in it which is worth around HK$69 billion. Kingsoft market cap is only HK$45.16 billion. This means their stake in Kingsoft Cloud, their gaming segment and their HK$19bil cash are all free. Good to know that the company is currently buying back its own shares too.

China Youzan(HK:8083) is currently on the verge of being privatized. Their core Youzan Technology will be listed on to the mainboard. If successful shareholders will get cash from the payment segment and Youzan Technology shares. Youzan's payment segment which has a very low revenue to asset ratio will be privatized and White Crow's personal stake in the company will be listed. No more than 5% of its shares will also be offered to the public. Including the cash offer of their payment segment the price given was HK$1.4654. My gut feel is the share price should ultimately go above HK$1.4654 for the public IPO to be successful. Being the largest decentralized ecommerce Saas in China with a market share of 7% it is now and will soon be more of a pure ecommerce Saas company unlike Weimob which still has the bulk of their revenue in advertising. 

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