Feb 2025 Portfolio Update

Portfolio: 30.33% (was 9.35%)

ES3 (Straits Times Index Fund): 3.34% (was 2.34%)

S&P (S&P 500 Index): 0.56% (was 1.77%)

2800 (Tracker Fund Index): 13.26% (was 4.32%)

It was days before the last update and plenty of things happened for my portfolio.

Not only did OKP did very well in the days after earnings release, Alibaba had a revival (again?) that was way more optimistic than the last 2, or 3 times where it rose and faltered.

In fact, the HSI did very well in a matter of days, but Alibaba's rise seems especially prominent as Xi seems to soften his stance on private enterprise and 'common prosperity,' a term that I still struggle to understand.

The market treat me very kindly beside the upmove by Alibaba and OKP. Clifford Modern Living release a special dividend of HKD 0.112 per share. That removes 113.8m (or 104.9m RMB) of cash from its books.

What is the residue value? Clifford has100m RMB of deposites, and 344m of cash before this announcement. It also have 62.8m in silver bullion, which should be lower than market value since silver prices went a little higher since.

It has  payables of 118m - 34m of receivables, which net to 84m. There is about 60m of other liabilities, so total up there is 144m of liabilities.

The liquid assets totaled (100+344+62.8) 506.8m, and taking away 104.9m for dividend means it is 401.9m of net liquid assets. There are 144m of liabilities, so the result is 257.9m RMB.

There are 1015.75m shares, and current stock price is 0.67 HKD. That is a market cap of 680m HKD, or 636.7m RMB. Buying stock now is paying for a enterprise value of 378m.

Free cash flow is about 80-150m in the last five years. Even if we looked back last 10 years, the lowest was 77m. So I think it is perhaps wise to hold on to the shares.

Clifford has been quite a good investment, yielding me 70% returns so far. It is my third biggest position.

Transactions:

Sold out the small position of Wee Hur in CPF portfolio. The language and tone from the directors at the AGM don't sound too shareholder-friendly. Wee Hur, iirc, doesn't have a good track record in being so in the past, but who knows it might do a Centurion (I lost 200-300% returns on this, it was my third biggest position) and bite me.

Took profit on a small amount of OKP. OKP still weighs 40++% of my portfolio.

About 1500 shares of Alibaba, which is 3 call options worth of shares, were called away. I also had purchase 2 call options of Alibaba some time earlier, strike price 125. These option expire at the end of the year.

That is all I guess. Grateful that the market is kind to me, and will be looking out for how Anta Sports do in a few weeks, after earnings. I have quite a bit of synthetic positions, through options, on it.

Thank you OKP.

The agreement to terminate the viaduct contract with LTA. 2018.

Bread and butter projects for OKP-- maintenance.

Some questions wrote in prior to AGM

It took a long time to build up a position in OKP. This was 4-November-2020.

AGM in 2023, where its fortune were starting to turn for the better.

OKP was probably the first company I bought based on the basis that a company is under some sort of duress but is likely to recover. The very first shares were acquired in 2017-8.

The viaduct collapse was followed by mutual cancellation of the project. Shortly after, employees and directors were hauled to court. 

All troubles do come to an end. Things start turning for OKP, beginning with Mr Or Toh Wat having his charges withdrawn. Then in 2019, the arbitration between CPG Consultants and OKP came to a close, awarding some 40++m to OKP. At the same time, the valuations of the shophouse properties began appreciating as the world fought COVID. 

When 40++m were finally transferred to OKP, the market was very disappointed when there are no special dividend. Instead, the management was awarded directly by bonuses. Whether the investors believed the explanation given by directors during the AGM then (it was family tradition to withhold all dividends payout to the directors for one year, for financial prudence) or that the market has a short memory, the price did recover a little.

During the last two years, OKP won tenders for various cycling track projects, and they turned out to be extremely capital-efficient (high gross profit margin). The management was quite confident that the margins could be maintained.

Yesterday's result release reflected that confidence. A special dividend was also declared (2.5 cents).

The amount was probably the biggest since the period 2009-2012.

The share price was then between 50-90+ cents a share.

Perhaps today's move signifies some kind of recovery. But I am pragmatic-- I believe that being project-based, earnings are volatile and hence thinking in terms of price-earnings ratio is a little inappropriate.

***

I think I will remember today for some time.

OKP is, by far, my biggest position, ever. I had over 540,000 shares at one point. For years I have been telling my friends to buy OKP when prices was depressed (around 19 cents). I shared what I knew but few are convinced.. and even those who were convinced could not withstand its lack of liquidity.

The lack of liquidity means there will be no exit doors should my friends wish to sell. I had to adsorbed a modest (retrospectively) amount of shares from a friend, using the open market, on the day's bid-sell price, because that friend could no longer endure the liquidity.

I looked stupid for almost seven years.

Today's +20% move elevated my portfolio beyond S&P 500's return (at last). My portfolio was severely impacted by realized losses in Central China Real Estate. That realized loss alone, was 20% of my portfolio size, and it crippled my confidence and XIRR.

Those losing years brought back a little sense of empathy. I began to understand why some of my friends bought crypto, or meme stocks. I probably wouldn't feel so sympathetic if I never have lost money. Success in my earlier years blinded me from pain.

Losing money in investments in 2022 and 2023 wasn't the only

I started having issues at my workplace in 2023. My mum health (and still is) had issues, and I seen the inside of an A&E more than I wished to.

***

Truth to be told, I was looking at my phone with wet eyes as the market opens. I was at TTSH with my mum... and I told my mum we can afford a little luxury today. 

Instead of queueing up with 30 over people for coffee in TTSH's canteen, I went next door and bought us a couple of latte. Instead of just having bread and butter sandwich prepared from home, I bought a pot of hotpan chicken from the Korean food stall.

Thank you very much, OKP. Gratitude is all I have for what I experienced today.

Year-To-Date Update (Feb 2025)

 

That is me, recently. Not sure what happen but I hope it isn't anything huge.

Portfolio: 9.35%

ES3 (Straits Times Index Fund): 2.34%

S&P (S&P 500 Index): 1.77%

2800 (Tracker Fund Index): 4.32%

Major Transactions:

(1) Bought 1000 shares of Anta Sports to sell covered calls on. I am moderately bullish on Anta and Intrinsic Volatility for Anta is making the price of these calls worth it. Buying stock and selling calls of overpriced assets don't make sense to me. Yes, volatile, but highly overpriced stocks, like Nvidia and Tesla in the past, gives a option writer eye watering gains. But attention should be paid to risk-- I don't want to hold these stocks at current prices.

Nvidia, Current price: 129.84 Strike 130. Call option price 8.3. Expires in 19 days.

Tesla, Current Price: 361.62. Strike 365. Call option price 15.6. Expires in 19 days.

Anta Sports, Current Price: 86. Strike 87.5. Call option price: 3. Expire in 17 days (27-Feb)

Alibaba (HK), Current Price: 100. Strike 100. Call option price: 4.47. Expire in 17 days.

The yield respectively:

Nvda: 6.38%

Tesla: 4.27%

Anta: 3.43%

Alibaba (HK): 4.47%

The idea that rewards should commensurate with risk is seldom violated. As of now, I feel that Anta is moderately priced for its financials.

(2) Sold 1000 shares worth of Anta in put options and bought 1000 shares of Anta in call options, expiring one month.

This is what I would call "hand itch" trade. This trade is known as a "synthetic." Very little amount of money was put up for this trade, which would expire in 2 months. Realistically, due to theta decay, I would start selling a month or so before expiry.

Stocks: Since Anta Sports cost 85 HKD, 1000 shares of Anta cost 85000 HKD, or approx 14800 SGD

Options: Selling put (strike 85) gave me 4.62 per contract, and cost 4.95 (call options strike 90) to buy those call options. Each option contract is 200 shares, so I need 5 contracts= 5 * 200 * (4.95-4.62)= 330 HKD, or approx 60++ sgd.

Obviously that would mean Anta has to go close to 95 HKD for my options to start making money. Next month is earnings month, so it is worth a punt.