Sunday, 25 April 2021

Life is So Vulnerable!

Recently, my best friend's nephew who was only two years old just passed away. The poor little baby boy was just fine and the next moment he lost his consciousness and after arriving to the hospital, his heartbeat stopped! 

Prior to the tragedy, there was no big sickness or symptoms that worries. It is an unnatural death. Autopsy was performed, but doctor can only conclude that it was heart failure without any other reasons found. The family was desolated! 

My friend who is always being cautious about his financial, suddenly confided in me that after this incident, he started thinking that life is so vulnerable and short, and maybe we should also just enjoy the current moment a bit more than what we do now. 

One lament includes the saying that maybe we should just buy a big house with a nice sea view and enjoy the living with our loved ones, before it will suddenly become too late? 

This episode also brings me back to seven years ago when I blogged on my second post “Life is unpredictable”,  after my then broker just collapsed and died of brain stroke. 

In that post, I also refer to Dennis Ng, a local Singaporean financial adviser who passed away at the age of 42 in 2012. Dennis is very frugal and always live within or below his means. Even though he is multimillionaire and founded several businesses, he continue to stay in HDB, and take "BMW" from home to work. BMW = Bus, MRT or Walk.

It left me wonder that if life is really that vulnerable?  

Should we really be so calculative in planning our finance, being extremely frugal, saving every cents, and being worrisome about the extra dollars we are going to spend more? When perhaps one day, all these numbers does not matter anymore? 

Yes, we are happy if we see the growing numbers on our portfolio or in our bank accounts! 

That said, if I don’t spend it, it will only be a mere number that perhaps guard my continuous hidden pride within myself without doing anyone else good? Of course, we need to keep a part of it for rainy days, and unexpected events! This is common sense! 

What I am saying is that sometimes from our over emphasis on money, there are too many times when we can make our own life, or the lives of our closed ones really miserable. 

Perhaps we should spend and do treat the people around us good with our financial prowess? 

Perhaps we should help those who is really in need? Our small donation can mean a lot to those who is in need of money for survival. 

Perhaps we can have a treat for our family members and loved ones with some money spend?  

After all, we come to this world naked and we will also leave naked. 


Saturday, 17 April 2021

Will Mapletree Industrial Trust & Keppel DC REIT Benefit from Facebook’s Transpacific Data Connection (Bifrost and Echo)?

Recently, Facebook announced plans to build two new data submarine cables between Asia-Pacific and North America. They are dubbed Bifrost and Echo. The transpacific cables will connect Singapore, Indonesia, and North America, and are expected to increase overall transpacific capacity by 70%.

Source: Facebook. 

For Bifrost, Facebook will partner Keppel T&T of Singapore and Telin (aka PT Telekomuniskasi Indonesia International) and XL Axiata of Indonesia and is due to be completed by 2024. 

For Echo, Facebook will partner Google and XL Axiata, and is due to be completed by 2023. 

Will this increase in transpacific capacity benefits the Mapletree Industrial Trust and Keppel DC Reit? 

Mapletree Industrial Trust “MIT” (SGX: ME8U) 

MIT has just completed acquisition of US data centre located in Richmond, Virgina in March this year for US$208m with 100% occupancy, freehold status, and an initial NPI yield of 6%. 

The company has a medium term vision of allocating two-third of its S$6.8B AUM to data centres, meaning acquiring of S$1B worth of data centres per year in the next 5 years. The current data centre AUM is 40.8% after the recent acquisition. 

Out of MIT’s  data centres, 34.5% are located in North America and only 6.3% is in Singapore. 

MIT’s FY20/21 DPU of 9.25 cents based on current price of S$2.79 gives a yield of 3.3%. 

However 3Q FY20/21 DPU is 3.28 cents. If MIT can maintain this result, then average DPU per annum will be 13.12 cents translating to a yield of 4.7%

NAV per unit as of end 2020 is S$1.70. 


Keppel DC REIT “KDC” (SGX: AJBU) 

KDC acquired Amsterdam DC on 24 Dec 2020 for S$48.1m with 99.1% occupancy and an initial NPI yield of 5.1%. 

KDC’s core market is in Singapore accounting for 56% of its AUM of S$3B as of end of last 2020. 

FY2020 adjusted DPU of 9.17 cents based on current price of S$2.69 gives a yield of 3.4%. 

NAV per unit as of end 2020 is S$1.19. 


CONCLUSION

Typically, the identities of the tenants for Data Centres cannot be disclosed due to the strict confidentiality obligations under the lease agreements. 

Hence we are not really sure how Facebook and Google’s Bifrost and Echo projects will benefit MIT and KDC in the years to come. 

Nonetheless, I am very certain that there will be a strong and resilient Data Centre demand in the years ahead. 

Below are some of the positive numbers on DC spending coming from research companies. 

Source: Keppel DC REIT. 


Therefore it is in my opinion that MIT and KDC will continue to grow in their top and bottom line. 

What are your views? 


Sunday, 11 April 2021

Be Wiser When You First Start Your Career - In Dire Industry, it is More Difficult to Find Success!

It was decades back, and I needed to decide on which university courses to enroll. My parents are uneducated and my elder siblings are diploma grads back then. They cannot help much in my decision. 

MY CHILDHOOD AMBITION

My childhood ambition is to be lawyer. Unfortunately, coming from poverty-stricken family and living in a less than desirable estate with hokkien or mandarin speaking environment, my “England is not powderful” enough for me to be a lawyer. This is despite my photographic memory and good analytical and debating abilities. 
I then look to my second choice as an architect. I did my research and find out that I probably need 8-10 years in university and apprenticeship, before I can earn enough. “My mum will be so old by then”, I thought! 

GOVERNMENT’S ADVICE 

It was in the nineties and Singapore had so many developments ahead and engineers were highly sought after.  The newspapers headlined on the good prospects of being an Engineer by our government. 
Wow… I exclaimed! 

Being a teenager with limited experience in life, I heeded our government’s advice! Looking back, I think it was not a very a good piece of advice! 

Just go and ask all those who are still working as Engineer today? How many Engineering Head can you have, heading in a pool of engineers?

Government’s objective is always with respect to the country. It is impossible for them to cater to your individual career future. Back in 90s to mid 2000s, they probably need many Electronic, Mechanical and Civil Engineers, but after that… hmmm…. 

Ok, things do change…. 

IN A DIRE INDUSTRY, IT IS MORE DIFFICULT TO FIND SUCCESS! 

Consider if most of my university friends who graduated in Engineering, who are still working as Engineers in electronics, mechanical and manufacturing (marine, aerospace, industrial) or civil and construction industry; 

Do you think majority of them will have an edge in their career? Or will they somewhat stuck if in their mid-career stage? 

Do you think they will have better salaries and benefits, compared to those in banking and finance and real estate or digital sectors? 

Even if you are very capable and hardworking, if you are in a dire industry that render your companies in losses or little profits for many years, your career will see less success and populated by more frustrations comparatively. And even if you find success, the remuneration will be considerably lesser than the better earning industries. 

For example, manufacturing, F&B and also hotels are sectors that highly competitive with lower margin. Hence, it will be very difficult for companies in these sectors to pay you too well. 

You can be a CEO or COO in your less profitable sector with never-ending workload and stresses, but your pay can be much than the Tom, Dick and Harry mid-level executives in better paying and highly profitable sectors. 

I know of many examples that even if your result during school days is below average and certainly not as smart or hardworking than some of your friends in Engineering, you will still find yourself doing much better than your peers who are in the Engineering or Manufacturing sectors. 

If you amassed a lot of technical skills over the years in Manufacturing sectors such as Construction, Aerospace, Marine & Offshore, your expertise will in fact limit you only to within the industries.  Or else, it is likely that you will see pay cut moving to other sectors. 

On the contrary, if you are working in banking, real estates, or big software companies, then you can see vast opportunities and it is easier to transit across sectors. Or at least within the sectors, companies will be profitable with better packages. 

Of course, there will be exceptions. I am generally making reference to the majority of cases! 
Otherwise, you can also be in mainly supporting functions such as in Finance, HR, Legal and IT etc, then you can easily move across industries. 

FINAL THOUGHTS

Singapore is a finance hub. Without doubt and by looking at STI components alone, you can see that we are in a country mainly driven by finance and banking and/or real estates. These sectors during good and bad times are still profitable. 

However, take a look at the manufacturing sectors, especially those cyclical ones, how many are already out of businesses. 

Singapore is inviting all the tech companies into Singapore. There will be bright future. 
Hmmm… but maybe in two to three decades time, it will not be so good anymore. Who knows? 

Therefore, make sure you can anticipate earlier than your peers if your industry is going sunset all the way. And even in these good industries now, try not to be over-technical and over niche in your job. 

This is because later on, it can be more difficult to transit to other industries, when your industries becoming overly dire without much hope ahead. 

Don’t always think our Government is right and just obey their advice! Their interests may not be aligned with yours. 

It will be wise to seek advice from people you respect who has more experience in life and career, and can see further. 

And, that someone must really have genuine interest for your future, or at least someone who is less selfish. And, if you received something good, try to also be grateful and give back. 

While I was taught to be a cheerful giver, I have experienced countless people who only remember me when they are in trouble. They are normally only thankful when I help them to solve their problems. 
When their troubles are tide over and life is good again, they will never catch up with you or even say “hi”. They will only catch up when they need something from you, and when you are in need of help, they will bestow you with one sentence “take care” and fullstop! 

Please don’t be that kind of person who only ask and ask and take and take, and without giving at your end. 

Asking people for help is so easy. But when we ourselves need to help others… how many will go through the trouble of doing that? 

Therefore, let us help one another and learn to be mutual and win-win! 


Tuesday, 6 April 2021

Invaluable Million Dollar Investment with No Monetary Return for a Long Time!

What is our one major investment that we will have to endure no monetary return for a long time? 

Oh yes…. For parents, this investment is unquestionably on your child/children! 


It not only includes the money spent on them, it is the time and energy on them, and the undivided love and attention for them guiding them during their grow up years. 

SPENT MORE THAN 1 MILLION IN THE LAST DECADE 

Recently I told some friends that so far, me and my wife has definitely spent more than SGD 1 million of expenses directly or indirectly because of our four kids. 

It sounds unbelieving, but it is definitely not bragging. 

I have been recording my daily, monthly, and yearly expenses.  Recently I extracted and compiled all the proof of spent. To my astonishment, our expenditure for the last decade on kids easily surpassed the million-dollar mark. 

In the following articles, I will just cite a few examples, and you can do your own math to see if I am lying. 

The more than 100K amount includes the direct kids spending and our household expenses such as all expenses spent within the household, including expenses on my helper and my parent-in-law staying with me mainly for the kids too. It however does NOT include mortgages, household vacation and car expenses, which in many ways are also indirectly for the kids. Hence, the actual expenses may be even higher.  

How can the expenses be so high?  Maybe you will think that we are a family that probably splurge on expensive education, unnecessary expensive meals or toys or apparels for our kids? 

Certainly not! 


WE ARE NOT SPENDTHRIFT!

Apparently, we are cautious spending on restaurant meal, and normally eat at home. Even when we eat out, my kids love to eat only pizza and Encik Tan drumstick rice!  We will try to share for most of the time in order not to waste food and money! I have little preference on food myself. I prefer Hawker or Kopi Tiam food, so low cost actually. 

For toys, my kids also have lesser toys compared to my friends. They also recycled some of their clothing, handing over from siblings to siblings. For phones, they also use our old and used phones. 

Yet, the expenses are still so high? 

Welcome to Singapore! 


TIMES HAVE CHANGED

In the old days, there are very little competition in enrichment classes. It will be rare that your friends are going for tuition, or swimming lessons or other paid sports or art lessons. Furthermore in the 80s and 90s cost of living in Singapore is really much lower, and everyone live a much simpler life. Parents care less for their kids’ education. After taking my PSLE and O Levels, my parents don’t even know I already taken these major exams. Instead, my mum’s primarily focus is for me to eat well! 

Therefore, back in those days, raising 5 or 6 kids is probably even cheaper than 1 or 2 kids of present times, taking into account all sorts of inflation, and average peer and environmental pressure. 

Let me cite a few examples in the following to prove my point. 


KINDERGARTEN COST

During my time, most of us will be schooling in PAP kindergarten at the age of 5 and 6 only. School fees and uniforms and books must be dirt cheap. This is because even our bottom few percent low-income parents can afford. 

Today, most kids go for N1, N2, K1, K2. Yes 4 years! Most with both parents’ working and no helper nor parents helping, it will be 6 years even. 

At the lower end, you will spend SGD5K per year just on school fees. That is approximately what I spent for my kids for half a day session in Church school. And this is definitely one of the cheapest in the entire Singapore. 

Before government subsidies, I reckon most parents will on average spend at least SGD1K per month and that will be SGD 12K p.a. Nonetheless, many pre-pri-schools are already charging SGD1.5 to 2K per month. MindChamps is charging close to 2K monthly for full day although working mum can have some few hundred subsidies provided you fulfil income criteria. 

It is hence inevitably that for just 4 to 5 years, your one child school fees can already hit 50K to 100K or more. 

It excludes school uniforms, books, materials, and all sorts of extra costs that many schools will be charging. There is also extra school enrichment and year end concerts, all requiring $$$. Sometimes, it is difficult to explain here, but once you experience it, you will know what I mean. 

On yes…. School buses are not cheap either at SGD100 to 150 per child monthly, depending on distance.

Baby Bonus does help, but that can cover partially only the expensive pre-natal, delivery, confinement etc expenses. Of course you can choose public hospital, but I think among almost all my friends who are middle-class, it is almost unheard of that anyone choose public hospital delivery services. 

In the old days, only the top income can afford private hospitals, and all rest of Singapore are all going to the very affordable public hospital. 


INSURANCE COST

As healthcare cost increase, we as parents also worried and started buying insurance for our kids once they are born. During my younger days, where got parents buy health insurance for their children?

For my kids, we bought NTUC income health insurance. For reference purposes, one is close to SGD500 and the other is SGD780 per annum. 

ENRICHMENTS

For Chinese enrichment classes, we sent them to Berries/Busybees. In a classroom setting primary school student, we pay ~SGD750 per 16 lessons per pax. 1 lesson per week. In one year, there are 52 weeks, so yearly charge will be 3.25 x SGD750 = SGD2.4K. Enrolment fees and materials for lessons are separate.  

By the way, this is just for Chinese hor….! Still have Maths, and other subjects. 2.5 to 3K per year is very common for each weekly enrichment classes subject. We only go for Chinese! 

You can find some of the pricing in this blog: https://blog.moneysmart.sg/family/best-tuition-centres-singapore/ 

For sports on my two kids now, I easily spent 1.5 to 2K per month, excluding shoes, apparels and rackets, courts booking fees, competition fees etc. Recently, I heard from my friend that his friend spent 4K per month just on one sport for his primary school kid. Crazy! Yet, this is how competitive the parents can be nowadays!  

Of course, you can also spend nothing on your kids. It is totally up to you. 

Personally, I do have my own reason in giving my kids this foundation of sport. 

Again, looking back to my old days when my parents spent nothing on me, and I am lucky to learn myself the sport I love and, in some way, excel in it without paying much! 

Nowadays, if you spend nothing on coaching, it is almost impossible that your kid can go up to national level in any racket sports or swimming or whatever popular sports! Tell me if you manage to find any example, unless the sports require only in-born talent! Very very rare! 


MISCELLANEOUS 

Then you have children’s shoes or apparels that are always needing to change as their feet and body grow so fast. The price of shoes, even those white ordinary school shoes without brand are at least SGD25 to 30. Those white shoes of Nike/Adidas are normally SGD50. 

During our time, panda white shoe is SGD5 maybe! Who wear panda to school nowadays? 

Clothing, school bags, pencil boxes, lunch boxes, water bottles are all very expensive nowadays compared to the old days. Toys are also more expensive! 

When you have more household members in the house, more aircons will be running incurring expensive electricity and maintenance fees. FYI, when I was young, I have no air-cons, no washing machine, no heater, no bed in my house until I am young adult. 

To be honest, we are still living frugally today, as I will not waste electricity unnecessary due to my humble upbringing. Still, our expenses are very hefty as everything in Singapore is really getting more and more expensive. 


FINAL THOUGHTS

Many years ago, when my kids are still at younger age, I use to tell my wife, 

any schools for my kids, who cares? They will grow smart themselves and character building is more important!”. “Don’t need tuition lar…! “Don’t need to buy insurance lar!” 


However, once you are in it yourself, and you experience today’s ever increasingly expensive and competitive Singapore, then you will understand that sometimes, it is inevitable! 

You are really NOT that kiasu parent, but it is just that you really love your kids and wanted them to have a good foundation to start with. Of course, I emphasize again that character building is even more important! 

Finally, raising a kid in Singapore today is totally different from in the 80s or even 90s, let alone, two, three or four.

I did a post last year on, 

How Much Does It Cost in Detail to Raise a Child in Singapore for Low, Middle and High Income Households

For middle-class, I suspect It can easily cost more than ½ million to raise a kid in their life time.  

Then there is also the intangible part of it. The huge amount of time you spent on the children, teaching them, driving them around, loving them, are all “pricey intangible expenses” that otherwise your time can be used to earn more money?  

To be honest, I sometimes feel that it is better during our childhood days when there are fewer material comparisons, and the masses are all not so well to do, aside from the top few percent. 

Even when I belong to the bottom few percent lower income family, I still grow up in a very very decent environment comparatively without inferior complex. 

During my childhood, I did not feel “lacking”, because I did not have tuition or enrichment lessons. Even, when our family cannot afford to eat MacDonalds or take the occasional taxi, I still find it pretty normal as a kid without much complaints. 

It is so different today! 

How about you? 

How much are you spending on kindergarten? 

Will you spend on enrichment classes for your kids and how much?  

Will you spend to groom your children? 


Undoubtedly, kids are definitely one major investment that we will have to endure no monetary return for a long time? That said, the intangible returns of investments of the indescribable joy are huge for any parents!  






Saturday, 3 April 2021

20,000 Less People In Singapore Each Day During Covid Year?

FOREIGN VISITORS

From Singapore Tourism Board (STB) as below… 

"Singapore attracted approximately 19.1 million visitors in 2019 with receipts at S$27.1 billion, according to preliminary figures by the Singapore Tourism Board."

"Due to unprecedented global travel restrictions and border closures, Singapore saw a decline in both visitor arrivals and tourism receipts in 2020. Visitor arrivals fell by 85.7 per cent in 2020 to reach 2.7 million visitors (nearly all from the first two months of 2020), while tourism receipts declined by 78.4 per cent to S$4.4 billion in the first three quarters of 2020."

This translates statically to a net decrease of 16.4 million overseas visitors during covid year. 

And it pro-rates to 1.37 million lesser overseas visitors per month in Singapore. 


OUTBOUND TRAVEL 

Prior to Covid in 2019, Singapore residents made a total of 10.7 million outbound departures compared to in 2020 where there were a total of 1.5 million outbound departures. See table below. 

Source: https://www.singstat.gov.sg/find-data/search-by-theme/industry/tourism/latest-data 


This means that 9.2 million more Singapore residents stayed in Singapore during covid year. 

And it pro-rates to 767 thousand more Singapore residents in the country per month. 


NET EFFECT

Overall statically and for reference purpose, 

  • There were 7.2 million less people in Singapore during covid year. (i.e. 16.4 minus 9.2 million) 

  • On average per month, you will have 600 thousand less people in Singapore
  • On average per day, you will have 20 thousand less people in the country



 


Rolf's Portfolio Update - End March 2021

OVERALL PORTFOLIO 

Due to the stock rout in February and March and falling gold and silver prices, my overall portfolio value fell 6%. However my cash position increase slightly from other sources and with higher USD to SGD exchange rate, overall net fall in portfolio is limited to 3%. 

As for portfolio mix, there are not much changes since last update from End January (click here). I am still holding on to ~75 percent shares and 25 percent cash - bonds - metals. 


 

PORTFOLIO MIX

My tech component saw its rout in the last two months affecting mainly my China tech stocks. My Tech mix fell by 2%. On the contrary REITS rose by 1%, and O&G rose 0.6% since end of January. 

 



STOCK PORTFOLIO

Since my last update, I sold off Raffles Medical at losses, but recovered the losses by selling HKSE renewable stock GCL-Poly Energy (3800) at double bagger. I bought into SEA Limited and stake in it increase from 3.5% to 6.7% of my overall portfolio. 

 



CONCLUSION

In my last portfolio update on 26 Jan 2021, I closed the article with “How long can stock keep rising?” 

Indeed in less than one month after that, Market is bearish until recently. Tech and Growth Stocks started to tank, although STI started to climb more than 8% to as high as 3200 recently driven by the three main banks in Singapore and also recovery stocks. 

But why did tech and growth stocks fall even when the market is cheering for the vaccine drive and recovery optimism?

With improved economic outlook, investors expect a rise in inflation and US Treasury yields is rising. Rising yields is slowing the rally in technology and growth stocks as investors are worry about the rising debt costs for these companies. 

On the contrary, higher yields have lifted financial stocks and accelerated a rotation of funds into other Covid-beaten sectors.  

You may be wondering, will stock prices continue to rise or fall in the next quarter? 

I am not overly concern, as I intend to stay unaffected with little or no action. But if there is a significant rise in stock prices, I may cash out profits to stay with more cash. Personal preference! 





   



Thursday, 1 April 2021

Looking Back At My 7th Year Of Blogging – THANK YOU ALL OF YOU!

Seven years ago on 1st March 2014, I started this blog. So it is exactly 85 months ago. How time has flew just like that. 

Today, I take some time to re-look into my initial blog articles when I am still a newbie blogger back then. It is definitely nostalgic and a ride back to memory lane.  

There are several reasons why I started blogging back then. I wanted to do something different. i.e. start a blog! I wanted to go against my comfort zone as I was (or still am) deemed a “computer idiot”. Starting a blog may be easy-peasy for many, but for me it was an uphill task. Above all, I wanted my children one day to read my blog, and to learn something out of it! 

Read: Reasons for Blogging

Read: Purpose


Why did I choose Rolf Suey as my nickname? 

This blog is for me to find the true “myself” or “Yourself”. Do you realise that “Rolf Suey” with all the letters re-arranged can become “Yourself”. And the best way to find who your true self is, is to invest in Yourself! 

It was also my mid-career crisis that triggered this blog. I do felt old at the time of starting this blog and hence, I also gave the blog title a caption “Better Late Than Never” to encourage myself, and those who start late. Today, I have changed the caption to “Invest in Yourself”, although in theFinance.sg you can still see it as “Better Late Than Never” 


THE OILY BLOGGER 

Back then, there were already many established bloggers such as AK of ASSI, Dividend Warrior, Alvin of BigFatPurse (Dr Wealth) Jared of SMOL, Uncle Jacob of CW8888, Thomas of Bully the Bear, Kyith of Investment Moat, Brian of FFF, Kevin of Turtle Investor, Mike of Silly Investor, and Andy of Tacomob probably started his blog around the same time as me. And many more…. 

Feeling the need to differentiate myself from these established bloggers, Hmmm… then I think and think…. And since I worked all my life in the Oil & Gas (O&G), Marine Offshore industry, I decided to focus more about this industry’s counters. After all in early 2014, it is the golden years of Marine and Offshore stocks listed in Singapore Stock Exchange. 

So very quickly, I was given the nick name of “Oily Blogger” from Jared aka SMOL. 


MY THEME IS STILL PRETTY MUCH THE SAME

Non-commercial 
One principle I laid down for this blog in the beginning is that it will be “non-commercial”. This means that I do not write for brands or products to generate advertisement income. 

Please do not be mistaken, I am absolutely not against blogs with commercial contents! It is just a personal preference. I wanted to keep this blog “commercial-free”, something like a journal for my kids, myself and for my readers, where my one hundred percent honest opinions will be expressed.  

I am glad that after seven years, this principle is still intact. 

Oily Articles Still…
As I mentioned earlier, I was called the “Oily Blogger” because I started my first year of blogging with quite many Oil and Gas (O&G) articles, providing insight into the market, the relevant companies in general. After the oil crisis in 2015 many O&G marine/offshore counters had become non-interesting or had actually went bust. 

Still, after all these years despite the downturn, I and not tired of blogging about this market. I still write about companies like Keppel and Sembmarine and occasionally also overseas companies like US and China Oil counters. And I thankful for the readers’ support. 

Perhaps in a matter of time, more O&G companies will also transit into Clean/Renewables companies. I did wrote an article on that.  


It is about Life! H2F3
Aside from investment and stock analysis, this blog is definitely about life. Over the years, topics often converged into these 3 categories of Health, Wealth & Relationships. 

Then in August 2015, I devised my own formula of “H2F3”. They refers to “Health, Family, Finance, Friends, Hobbies” and are what matters most to me. Every now and then, I will write about my H2F3 updates. The writing helps me to look back clearly, in order to move better forward. 

Refer here for what does H2F3 (Health, Hobbies, Family, Finance & Friends) means.

Today, it is still very much alive! Read: Rolf 2020 (H2F3) in Review

Travel, Property, Kids’ Expenses, Biography etc
Prior to Covid, I also enjoyed sharing my travel experiences on this blog. Once traveling resumes, I will continue my sharing. 

I also have great interest in the property market in Singapore as well as topics on children since I am a parent myself. 

One topic that I have blogged lesser nowadays is biography of great people. Since 2016, my focus had turned from many great people to just ONE.  


FRIENDS IN THE BLOGOSPHERE – THANK YOU! 

The past 7 years of blogging has been nothing but fruitful and enriching. 

And it is NOT possible without all my blogosphere people. Many of the bloggers and readers become my blogosphere friends or “comments sparring partners”. 

I also met up with a few of them in real life. 

Knowing all of you here has been one of the most fruitful reward of blogging. 

Thank you to all of you. 

Wish you all a Happy and Blessed Good Friday and Easter Holiday! 



Sunday, 21 March 2021

My Health Problem - Life Is A Roller-coaster, Just Gotta Ride It!

After my last few articles revolving around how we successful sold our old properties and bought our new home, most readers will think that life is good for Rolf! 

Not quite! 

2021 has a rocky year for me. While all seems perfect on the surface, everyone faces problems in life, and I am no exception. 

Health issues cropped up already end last year. 

While I am feeling fine (in my opinion), a scan reveals otherwise, diagnosed me with complex intestinal problems! It is kind of an inherent problem that almost become fatal more than ten years ago. But I honestly know that this time it is way milder, as I feel normal without any major symptoms, unlike in the past that I can crouched in absolute pain. 

That said, doctor is giving me medications, and the body has to endure the side effects. Doctor advised that medication is temporary with surgery was suggested. It’s not going to be a minor surgery, and I am praying for God’s intervention for my miraculous healing, that no surgery will be needed, and I shall be healed. 


God’s healing miracles already took place many times in my family. My own illness healed in the past. My wife's huge tumour miraculously gone within two months, my son being miraculously healed having struggled critically in intensive care when he was born etc. 

Therefore DO NOT be misled into believing life for others is always smooth and sound, while thinking that ours are not as good. 

It is often not as what it seems on the surface. 


MY ROLLERCOASTER LIFE

My life has always been full of ups and down. 

At the age of four or five, I was hospitalised for deadly mosquitoes bites. As adult, I was also hospitalised with near-death incident. And this took place at the peak of my career, somewhat putting a halt onto it. 

Up to even the late 1990s, my parents’ household income is a meagre SGD800 with five mouths to feed. Since young, financial insufficiency always led to quarrels within the family. Then I work hard and started to earn good money myself through tuition with thousands in the bank as savings. Somehow, I squandered all of it to Singapore pool soccer bets. 

At one stage of my working adulthood, I was left with less than SGD50 in my bank account, having to repay my school debts and support close ones. My personal  investment journey began well, before I eventually bought a stock that eventually goes bust. 

Not until I met my wife, my boy-girl relationships were painful with betrayals against me, even from close friends, not just once but twice. In my school days, friends whom I really cherished and treated well were also not the nicest to me. 

My career has not been smooth sailing too. When my career storm to the peak with wealth and authority over a short few years, I took a “tumble” and was humbled to a job to learn to serve rather than to command. The financial and oil crises also allow me to witness many retrenchments and faced uncertainty in my career over a long period of time, even up to today.

Even our children’s birth have not been all uneventful, with many scares and tears, before joy and laughter.  


SUFFER FIRST, ENJOY LATER

With all being said, while for most part of my life has not been all smooth sailing, it does not mean that I am unhappy all the time. In fact, it is quite the opposite. I am normally happy and cheerful with always many close one and friends around me, helping me when I am down. I am very thankful!  

Each time, I will take my sufferings as lessons learnt, to become stronger and wiser in life. And each time after being “beaten”, I will come back to become a better person, at least in my opinion. 

The rewards reaped after the lessons are often not tangible, but of spiritual and self-realization that life is not always only about myself, my family, or “what I am going to get out of it”. It is about righteousness, compassion, and having a warm and loving relationships with God and with others, in peace, in love and in joy. 

For instance, my humble beginning taught me to be down to earth. Thereafter I started to grow my wealth slowly but steadily in a more sustainable manner. My erratic career also taught me not be arrogant and over the moon when things are all going so well in the way I want. Instead, I was taught to be humble in work, keep on learning and always preparing for the worst. 

My not so ideal relationships in parents’ household, my own boy-girlfriend days, and with friends in my younger days, enables me to establish much better relationships today, be it with my own family, relatives and friends and my colleagues. 

Throughout my life up to now, I always suffer first and enjoy later. 

In fact, if you look at the bible, all the great people, such as Abraham, Joseph, David, Moses and of course Jesus all suffer first before glory is or will be eventually revealed. 

Hence, it does not necessarily mean you are unlucky or a bad person if you are suffering now. It may be that this trial and tribulation is to train you to be better later, and for something more glorious to take place later. 

THE CONTEMPORARY CULTURE TODAY

Sadly, I think what the contemporary culture teaches nowadays is about big house, big career, big returns from investments, good schools, lots of friends and followers in social media etc

Then my friend sent me a video, with message as follows:


WHAT GOOD IS;

A big house with a small family

High income with less peace of mind

High IQ but less emotions

Good knowledge but less wisdom in life

More education with less common sense

Highly advanced medications, but poor health

Touched moon, but neighbours unknown

Expensive watches, but no time

Many affairs, but no true love

Many friends on Facebook but no friends in real life

In general, there are lots of human beings today, but less humanity. Nobody is interested in helping others or care if they are dying. People are more engross into sharing that event on social media. 

It is sad, but this is the reality. 


CONCLUSION – STAY POSITIVE, HOPEFUL AND FAITHFUL

Despite my problem today, I will stay positive. One colleague who also went through a health ordeal, told me that staying positive is the best medication. I will pray without ceasing, and put my trust in a higher power. I believe that all things happen for a reason now, but eventually it is meant to strengthen and prosper in future. 

While it is not easy, and I admit that I was emotional initially, but it is also exemplary that at least for the past few months, it has not affected my house sale and purchase, and I am happy that this "property thingy" has come to almost an end now. Neither is my family relationship and work adversely affected. In fact, I think they are becoming better lately.  

The bible wrote in 2 Corinthians 4:8-12, 

8 We are hard-pressed on every side, yet not crushed; we are perplexed, but not in despair; 9 persecuted, but not forsaken; struck down, but not destroyed— 10 always carrying about in the body the dying of the Lord Jesus, that the life of Jesus also may be manifested in our body. 11 For we who live are always delivered to death for Jesus’ sake, that the life of Jesus also may be manifested in our mortal flesh. 12 So then death is working in us, but life in you.

So while I am staying positive enduring the side effects of medication, and hoping for the miracles of healing, of course I will be most thankful and willing to receive your prayers or written testimony. Do pm me. This will be more valuable than gold and silver. 

If you are also facing problems yourself, I also hope that you can endure and overcome your problems with God. And if you need anything such as prayers or my humble testimony sharing for encouragement, do pm me too. 

May our Good Lord bless and keep you. 




Friday, 19 March 2021

Thank God That We Finally Bought Our House!

This post is the final series of my property articles.  

After four months, we finally bought our new house. I reckon it is a relatively short time, considering that most of my friends took one year or more to find their dream home!  

Not knowingly, it is somewhat overdose for us in the past months, as we indulged so much of our time and effort into the “property topic”. But guess it is inevitable, as “home” is after all a place that we will live in. 

At times, it can be very mentally stressed too. 

Putting your house on sale with many strangers scrutinising your house is not the most enjoyable. Having your house sold first, and then are left without a house also give us a weird feeling. On the other hand, viewings on other people’s house exudes slightly better feeling. But this is NOT before you were told by the agent of the ridiculously high pricing that the Seller is insisting on selling, even when the condition is not at all on par. 

Browsing through ad listings can be frustrating too. 

Frequently, you can be really disgusted by the listings asking exorbitant pricing without even understanding the market price. Then, you can see the same house listings over and over again, and rarely a reduction of price despite being there for donkey years. The new listings are also getting more and more expensive. And when you discover a decent listing, agent will inform that it was already sold. 


VIEWINGS – “THE SPIRIT” IS IMPORTANT 

The same time when we decided to sell our house, we also did our research for our new house and make arrangements for viewings. 

It is advisable to go for decent number of viewings to have a feel of the ambience. The feel of the surrounding, the neighbours, the roads nearby, the traffic, the noise etc. is what I termed as “The Spirit”. 

In one instance, we viewed a house with their ancestors photos all over the walls of the house. It gave a very eerie feel. The same night my wife had nightmare of the house. 

We also met seller(s) who asked their household member with unfriendly tattoos, stationed at their door front, and gave us stern look during the viewings. We have no idea what is the rationale behind that, but it is definitely a turn off.  

Areas like Eunos and Macpherson have houses with decent pricing. However, “The Spirit” in that area are just not quite right for us. Perhaps it is the aura of the Mosque and Industrial, lacking the homely feeling for us. Then you have Upper Thomson, Lentor, Springleaf that are great areas with Nature Reserve. But for amenities you have to travel a little further to AMK. 

In my personal opinion, the Eastern side of Singapore is definitely one of the better locations in Singapore. So many nice food, lesser pollution, near to East Coast, and low rise buildings etc. Then again, “The Spirit” for us now is also not right. It is probably a place we will consider staying when our kids are older, as their schools are just too far, and we do not intend to change their schools. 


GOD’S CHOICE FOR US

After close to 40 viewings, including 5 second viewings, we finally optioned-purchase our house at Serangoon Gardens. 

We have the best feel in Serangoon Gardens. Every time we go there, we have a very peaceful feeling and the ambience feels right for us. 

In the morning, there is wet market and hawker that sell really tasty local food. At night you have Chomp Chomp. There are also coffee shops, and so many nice cafes and restaurants, and NTUC at MyVillage, with so many banks around the area. 

Location wise in Singapore, it is also central. Many people tell me about the horrors of jam into/out of Serangoon Gardens. I know that area very well, having drove there many times in the last decade or so, and it really depends on where in the Gardens you are located, and how well you know the area to evade traffic jams. 

The exact location of our future house is fortunately not to be located in the jam zone. It is also within close proximity to the Garden circus, as well as walk to bus-stops that is only few stops to MRT. 

We are thankful that this is definitely a house bestowed to us by God. 

First it was not a house that is always in my mind. There is this one house that has been always in my mind that I almost wanted to offer, but it just didn’t happen. Each time there will be reasons stopping us from making an offer. 

On the contrary, this house of ours, just popped out of nowhere after our disappointments with all the viewings. The deal was closed within one week, including viewings, offers, negotiations and acceptance of cheque. This is very similar to the previous houses purchased, with deals all closed within a week including the first viewing. 

So many times in my life, the things I wanted most with my own desire and using my own strength has often turned out to be NOT the best option for me. Instead, the those things that come out of nowhere when I am “down, broken or contrite” has turned out to be the most suitable for me. 

Not just that, we are also very comfortable with the agent(s), and the seller(s), of whom both parties are very friendly and reasonable in the selling and negotiations. This also explains why the deal was closed within a week. 

It is also the nicest house we have viewed so far (within our range), and in terms of price PSF, it is also definitely one of the most reasonable. 

The appearing of the house is also after we prayed fervently. Furthermore, prior to the purchase, we were involved in a righteous act of God with parties concerning to this house. This gave us a very peaceful and joyful feeling that this is the right house.  

“The Spirit” is just right! 

Thank God for helping us to choose our house. 


Wednesday, 17 March 2021

Things To Look Out In Your Property Search! Our Real Experiences.

In my last post, I detailed the factors to consider when selling your properties. In this article, I will share our property search experiences over the past few months and things you should look out for. 


CHOOSE YOUR LOCATION 

Areas that are definite “No No No!” 

FIRST, crossed out locations that are completely out! For us, they are fringe locations such as Changi, Loyang, Woodlands, Yishun, Sembawang, Seletar, Kranj, Boon Lay, Chua Chu Kang etc. 

Then there are areas next to or very near cemetery. For instance in D19 Japanese Cemetery, the houses at or nearby i.e. Perry Avenue, Chuan Hoe and Jalan Limbok that are “No No no” for us. We are not afraid of ghost, but in general the “Spirit” of these locations will not be that ideal. 

Zoom into “shortlisted” locations

For a start, our shortlisted focus are as below: 

- D19 & 20 : Serangoon, Kovan, Thomson, Bishan, AMK

- D13 & 14 : Macpherson, Potong Pasir, Eunos 

- D15 & 16 : Eastern precincts of Katong, Joo Chiat, Bedok

- D23 : Hillview, Dairy Farm, Bukit Panjang 

- D26 : Upper Thomson, Sembawang Hill, Lentor, Springleaf

It is quite a wide area of focus because we do not want to be restricted by limited advertisements within a specific area only, that we eventually miss out on good deals! 

In the past, twice we had ended up buying houses that were not our initial choice of locations. As we looked back, they are very good choices liken to be “God chosen” to suit His and our needs. 

For more info about list of districts, refer below: 

Source: www.ura.gov.sg/realEstateIIWeb/resources/misc/list_of_postal_districts.htm  

KNOW WHAT IS MARKET PRICING

Be aware of prices across all places

During the initial search in Propertyguru, 99.co and SRX, we did not set filter on “locations”. The reason being we wanted to have an overall feel of the market pricing. In this way, you will know if buyers are asking reasonable or ridiculous prices. 

Please also use 99.co to check the transacted pricings or visit URA website here. URA website only gives transacted pricing up to last five years, while 99.co is extremely informative providing very detail information on past transacted prices up to few decades back. Accuracy of the information to be verified! 

Find out what is the last offered price

When sellers are asking for sky high prices in a sellers’ market, it can be really demoralising for the buyers.  Being there at house viewings conversing with the agents can give you a better feel of the realistic price level to close the deal rather than just depending on the asking price on the advertisement! 

Always try to find out what is the last offered price and when was that, and what is the deal closing price the seller(s) is(are) asking. 

Of course you have to give leeway to what agents tell you. Many will just fake that there is a last offered pricing even when there isn’t, just to arouse your interest to offer. That said, smart agents also want to close the deal quickly to earn their commissions, knowing that giving potential buyers a unrealistic offered price will turn off the deal. 

Find out the “Valuation of Property” 

Prior to making an offer, it is almost a must to find out the valuation of the property as it will affect your loan amount. 

For example, a house is selling at SGD2 million. Then, 75% bank loan is SGD1.5 million. But if the same property is only valued at SGD1.8 million, then you can only borrow up to 75% of SGD1.8 million which is SGD1.35 million. You will have to top up the difference (SGD1.5 – 1.35 million = SGD150K) in cash. 

During viewings, I recommend that you ask the agents what is the valuation of the property. Most agents will always tell you “Valuer can match asking pricing”. BUT, that is always from the sellers’ point of view. 

It is advisable to get the valuation from Buyers’ point of view, i.e. your own bankers. 

If you need help on getting free valuation of the properties of your interest at a better service than the typical bankers, even during viewing stage, please PM me at rolfsuey@gmail.com. 

Know what is “Entry Quantum Price”

The entry pricing of FH-999 landed property today is set at a minimum quantum of SGD3 million. For condo, it is at least SGD1 million. 

At entry quantum pricing, the PSF is usually higher. For e.g. >SGD1,700 psf for a landed property is considered high PSF, if it is neither a brand new house nor at a very ideal location. However, because the entry quantum is SGD3 million for FH-999 landed, then for a land size of 1600 to 1700sf, it is not considered  expensive anymore with SGD1,650 to 1,700 psf. You can imagine that SGD3 million decent landed properties will be sold within a short time. 

Price Yardstick 

In general, FH-999 landed will be priced above SGD1,000 psf. Anything below SGD1,000 psf will be single storey or remote locations or really big land making the quantum price higher, beyond the mass market’s reach. 

If you are able to find anything below SGD1,300 psf for 2.5/3 storey FH-999 landed, it is considered decently good pricing. Of course, conditions, locations, and Gross Floor Area (GFA) and many other factors will influence the pricing too. I will discuss more on pitfalls in the next section.

A rough benchmark of SGD300-350 psf can be used for additional levels/floor area if you are considering  A&A. This means that additional 1000sf of floor area should be SGD300K to 350K. For E.g. the same land size one with 2.5 storey, 3000sf of floor area is priced at SGD3.8 million, while the other is 2 storey priced at SGD3.4 to 3.5 million. 

Newly constructed landed properties are usually priced above SGD2,000 psf. 

Discount

Our experiences tell us that ~ +/-7% discount to the asking price can be a good benchmark. For E.g. 3.5 million asking price closing at 3.25 to 3.3 million. 1.6 million closing at 1.5 million.  We had also encountered properties with asking price 15-20% above market pricing, hence it is really very subjective, depending on sellers. 


BEWARE OF PITFALLS 

Houses that just cannot sell

Aside from ridiculously priced houses, there are also houses that are just so difficult to sell being in the market for a very long time with multiple agents marketing. I was told by a friend that one house that we have viewed was already in the market since 2018 until today.  

Somehow, “The Spirit” of these houses or the owners are just unexplainably bad too. 

My recommendations is NOT to buy these houses that has been in the market for a very long time already. This is despite that they are generally cheaper. You may be able to buy cheap now, but likewise, you will need to sell cheap too in future, and it will be very hard to liquidate too! There is always a reason why these houses are so difficult to sell. 

Odd-shaped house 

Don’t ever go for odd-shaped house. It can be a very nicely renovated house, cheaper than prevailing market rates, but there must be a reason why they are cheaper. Usually, there is a lot of wastage in floor area, meaning less usable area. We have seen odd-shaped house either on triangular land or all the rooms’ layout are just weird with lots of corners, and there is no way you can change the house layout. Normally odd-shaped house also have narrower living room, and you will never have the “can see far far” feeling once you step into the house. 

Traffic in front and back 

Houses with main door facing the busy main road is also a “No No No”. That said, houses with the backyard facing the main road is still ok, provided that the front facing is quiet. Also, it is better not to have too many bedrooms facing the main roads, otherwise noise and dirt will be a big concern. 

Door number, Road names

114, sounds ok in English. But because I am Hokkien, 114 means “death of hunger”! Aside from 114, 44 is another number we avoid. Door numbers 4, 14 and 24 etc are generally still ok for us. There are road names that sound a bit too funny. For e.g. I wanted to arrange for a viewing of house at Jalan “Lanjut”. Then after second thought, I think better not. Imagine you tell people you stay at “Lanjut”, translating that into Hokkien! Then there are “Lim Tua Tow”, “Lorong Pisang”, “Jalan Manis” etc. 

Super low ceiling 

Landed house with floor to ceilings height below 2.8 metres is also a “No No No” for us. I did buy a laser distance meter to verify floor to ceiling height during our viewings. With low ceilings, you will still get the small feel of house, regardless of how big the house is. 

Super dark house

Then there are houses especially inter-terrace house that are super dark. While traditionally North-South facing is good, but for Inter-Terrace, it is better not to go for NS facing as it will be very dark, if without a proper air well. 

No parking or super crampy roads outside

There are also houses with very “crampy” roads outside. We once visited an area of Sembwang Hill Estate and there many roads there that are just so narrow.  All the roadside parking were “jammed up”. It will even be so difficult to park car once you reach home. Then there are houses with no parking outside for visitors, because it is all double yellow lines outside. Visitors will have to park somewhere else and walk few minutes to your house. 

Elevated level 1

Then there are landed houses with elevated level one. This means that after you park your car, you have to climb 1.8 to 2m of stairs before arriving at the door of your living room. Imagine you have friends or relatives visiting who are wheelchaired? You will need to plan carefully to install a wheelchair elevator or someone strong enough to carry the disabled. 

Direct west-sun-facing

House with direct west-sun-facing is also not popular. However, it is less of a concern if there are proper balcony and not many rooms are facing west. Normally the newly constructed houses within 10 years old will take west-sun facing into their design consideration and cleverly evade the west sun heat. You can also plant trees to block the west sun. 

For west-sun-facing house, if it is Semi-D or Corner Terrace, it is not so much of a concern. This is because the west and east-sun facings are also shining parallel into the sides of the house, in fact making the house, especially the living room, very brightly lit, giving a very good feeling. 

CONCLUSION

In my next final article, I will write about our viewing experiences and our final choice! Stay tune… 

PS: The author seek legal disclaimers on all recommendations or pricing or psf figures. These information are provided solely based on writer’s personal experiences and as a rough rule of thumb to help readers with information. Readers or buyers should do their own due diligence or check with professional for advice in their property purchase journey. 



Saturday, 13 March 2021

STEPS ON - How To Sell Your Property And How to Plan For The Purchase Of Your Next Property!

Those who follow my blog will know that we managed to sell two properties early of the year. READ: How We Sold Two Properties In One Month and Very Close to My Asking Price! 

End last year, the conviction came that we should sell our properties, and purchase a new property. We went for it!  

For those who have intention to sell their property and buy a new one, hope that this article recounting our experiences can be of help to you. 

The sequence how we started are as follows. 

REASONS FOR THE SALE AND PURCHASE

To begin, it is obvious that you ought to be know the reasons why are you selling your house, and why are you buying your new house. For us, it is crystal clear and the reason was cited in our earlier article. 

SALE – ASKING, TRANSACTED AND SELLING PRICE

Next, do your research in PropertyGuru, 99.co or SRX apps. Search within your vicinity/condo the “Asking Price” and the “Past Transacted Price”.  

The price guide is normally in Price per square feet i.e. psf. 

For better units within the same condo, such as newly renovated, high floor, good facing and regular layout, the psf is definitely going to be higher than the average transacted psf. 

Below is a screenshot extracted from Propertyguru for the Condo Bishan Point. 

source: Propertyguru 

You can also visit URA website for actual transactions that have their Caveats lodged. Refer here. 

The “Asking Price” is usually higher than the “Transacted price.” This is because the Seller will want to give room for negotiation. Hence, in the ad, you will see “Negotiable” beside the asking price. However, do note that some Seller will instead indicate “Starting from” or “View to offer”. 

For example, after doing your research, your ideal selling price is SGD1.3 million. You can then probably either set your asking price as SGD1.4 Million “Negotiable” or SGD1.25 million “Starting from” or “View to offer”.  

Frankly, it is better to set pricing as “Negotiable” rather than “Starting From / View to Offer” since most buyers love to negotiate down the pricing giving them a “sense of achievements”, rather than bid up the pricing, that potentially can turn off the real buyers.  

WORK OUT YOUR FINANCIALS 

Create an Excel Sheet 

Next, I created an excel sheet. See below two examples. This is to ensure that my financial is in place. For those who wanted this excel format, please email me at rolfsuey@gmail.com 

Below are just arbitrary numbers for your reference. 



Loan Eligibility 

Contact your bankers to check your indicative loan IPA i.e. In-Principal-Approval. Otherwise, I recommend Redbrick Mortgage Advisory (refer here) who renders extremely good services and can help you search the best loan and legal conveyancing deal in the market. 

Monthly Mortgage 

Check your monthly mortgage. You can either download apps on phone, or you can ask for an excel sheet from your bankers. 

Affordability 

Referring to my excel spreadsheet that with all inputs identified, you can then clearly know

- what is the value of house you can afford 

- how much cash you have left for renovation

- what is the monthly mortgage cash outlay after deducting CPF

CONTACT YOUR AGENTS 

It is better to do your research first before contacting the agents for discussion. Then at least you already know your stuffs, and will not be over-influenced by the comments of the agents. 

If you are not very sure about the choice of agent, maybe it is good to get two agents for different opinions, or even get two agents to do the marketing. 

Refrain from getting too many agents to freely market your house. I have seen ads with more than 10 agents marketing, and sometimes it can be really a turn-off, and they have been in the market for a long time “unable to sell”. 

For me, my agent is my decade-long friend who knows the estate really well with good transacted track records in the past. Not only I gave my agent a longer exclusivity for the sale, I also did not short-change her/him and gave 2 percent commission plus GST. In return, my agent managed to sell my house in a short time, and at record PSF, and way above my initial expected deal closing price. 

Everybody is happy! 

Good luck to you if you are selling your house. 

In the next article, I will share my experience on my search of house. 

Hmmm.... I am not going to be a property blogger. It is just that the topic of "properties" have a big place in my mind for the past three to four months. 



Saturday, 13 February 2021

Will Pinduoduo Inc (PDD) Keep on Growing?

PINDUODUO (PDD. NASDAQ) – Together, More Savings, More Fun! 

Source: https://investor.pinduoduo.com  


Pinduoduo returns more than 500 per cent in the last one year. 

Despite only started in 2015, Pinduoduo is now the second-largest e-commerce platform in China, only behind Alibaba. Pinduoduo has been enjoying strong growth, with 3Q20 revenue jumping by 89% yoy to RMB 14.209 Billions. The company now has 731 million active buyers on its platform. 

Pinduoduo emphasize on team purchase model to promote interactions between users to increase volume of sales while giving more savings to the users.  Many of Pinduoduo current crop of sellers were originally on Alibaba's Taobao platform. 

By continuously expanding the range of products available, the online platform attracts new merchants and brands selling everything from toothbrushes to Rolls-Royce cars!


SMART AGRICULTURE “DuoDuo Maicai” 

PDD operates China's largest online marketplace for agricultural products, and is the only major tech company in China to make improving agriculture a stated strategic priority. 

In my opinion, this is definitely one of the biggest potentials of PDD. 

In China, most farmers due to their lack of direct access to consumers, rely on middlemen who rip them off and reduce their profits. PDD helps farmers by teaching them how to sell to consumers directly on its platform eliminating the needs of multiple middlemen. PDD also educate farmers and offers them smart AI-generated farming suggestions to raise agricultural productivity and quality.  

Pinduoduo “DuoDuo Mai offers next-day, self-pickup grocery service. Buyers can place an order for groceries before 11 pm and pick up their orders from 4 pm onwards the following day. There are designated pick-up points for convenient access. As China’s largest agricultural e-commerce platform, Pinduoduo works with millions of farmers, merchants and logistics providers. The platform first gathers information on the types and availability of local agricultural produce, then curates a list of items to be offered to shoppers each day.


FINANCIALS

Refer to PDD's 3rd quarter unaudited results here

While all good things are being aforesaid about Pinduoduo, the company is still loss making. 3Q20 operating loss was RMB 1,296.7 million (USD 190.8 million). However, this is a much-improved figure compared operating loss of RMB 2,792.0 million in the same quarter in 2019. 

Despite its loss-making status now, Pinduoduo has been increasing its revenue qoq and yoy with close to 90% increase in revenue in the latest quarter. 

What is more remarkable is Pinduoduo’s strong gross margin profile. In an article from seeking alpha in Jan 2021, it states:

“Over the past ten quarters, Pinduoduo's gross margin has fluctuated between 72% (Q1 '20, where the pandemic heavily impacted operations) and 85.7% (Q2 '18). Alibaba's gross margin sits at about 44%, while JD's hovers at 8.7%. As long as Pinduoduo can maintain a >70% gross margin over the course of the next eight to twelve quarters, as revenues could be set to nearly triple, its earnings picture will dramatically improve. Even if expenses rise, it's likely that the total expenses' growth rate will lag gross profit's rate with these margins.”

That said, cash position is strong. Net cash provided by operating activities was RMB 8,321.8 million (US$1,225.7 million), compared with RMB2,618.2 million in the same quarter of 2019, primarily due to an increase in online marketing services revenues. 

TTM cash flow from continuing operation is RMB 22.8 billion (USD 3.4 billion). 

Cash, cash equivalents and short-term investments were RMB 45.6 billion (USD 6.7 billion) as of September 30, 2020, compared with RMB 41.1 billion as of December 31, 2019.


LATEST NEWS

Dec. 21, 2020,  Pinduoduo Inc announced that a global institutional investor will purchase close to US$500 million of new shares through a private placement as the agriculture-focused technology platform pursues its strategic priority of raising farm productivity and improving food security and quality.

Pinduoduo expects to use the proceeds to strengthen its balance sheet and make strategic investments. The share issue follows an oversubscribed convertible note-and-equity offer last month, in which the company raised a total of US$6.1 billion, including overallotment.


SUMMARY

The shares of Pinduoduo is not cheap. PDD’s market cap is close to USD 240 Billion valuing a whopping of more than 55x the equity value in the most recent quarter. Price to TTM Sales is ~38x. 

For comparison and information sake, 

- Singapore’s Sea Limited (PB ~182x, PS~40x)

- Alibaba (PB~11x, PS~7x)

- JD.com (PB~15x, PS~1.8x)

- Tesla’s (PB ~35x, PS~25x)

- Zoom (PB ~83x, PS~65x). 

As grocery shopping shifts rapidly online, Pinduoduo is investing in creating a low-cost, next day logistics infrastructure suited to handle perishables. 

Farmers now have increase knowledge of smart agriculture technology and  direct access to consumers, thereby earning better margins while consumers pay lower prices! 

Pinduoduo future in agriculture e-commerce is huge in China’s billions population. 


PS: I am invested in PDD. 


Sunday, 31 January 2021

Keppel Exiting Rig Business – What it means?

Keppel announced on Thursday that she will exit the right-building business. Keppel Offshore and Marine. (KOM) will be split into three companies. 

1) Operating Co – An asset and people light company focused on design, engineering and procurement; fabrication to be subcontracted to third parties;

2) Rig Co – To charter/manage Keppel Corp’s rigs with the ultimate aim to sell all rigs; to be dissolved thereafter; 

3) Development Co – To complete construction of Keppel Corp’s order book; to be dissolved thereafter. 

This is not unexpected as Keppel has been dragged down by its rig business in recent years following the oil crisis, writing down assets worth hundreds of millions. 

In my previous article, I had cited almost exactly the strategy that Keppel is doing today. 

@QUOTE

“Otherwise, there are also possibility of selling KOM businesses in parts if not wholly, such as disposal of Rig business, Floatel business, FPSO business, Marine business, Renewable business, Proprietary Designs, Repairs business, Defunct KrisEnergy? etc.” 

@UNQUOTE

For more about my previous article: 

Rolf’s Thoughts: How Is Keppel Going to Monetize S$17.5 billions and Revamp It’s O&M Business?


FROM OIL AND GAS TO RENEWABLES 

KOM has net order book of SGD3.3 billion with more than 80 percent of which is in the renewables and gas solutions. Approximately 60 per cent is gas business today. Hence, I believed that KOM will definitely want to increase its share of Offshore Wind and Solar business. The way forward is to be Developer of Renewable Assets, as I also mentioned in my previous earlier article. 

Developer of Renewables 

The developer acts more like a consultant with extensive knowledge of the sectors, as well as familiarity with state regulation, and have high level connections in government, state power/electricity companies and financial institutions. 

Keppel has most of these pre-requisites.  

The developer of renewable assets will assess a land suitable to be developed into Offshore Wind Farm or Solar Farm. Feasibility studies will be conducted. E.g. cost of development; how much electricity it will be able to produce i.e. revenue; how to develop it with major suppliers; assess connectivity etc. 

Then, he/she will find investors to own the Wind or Solar farms. Capital is normally in billions USD. Typically, the state and major financial institutions will acquire become the major stakeholder. The developer themselves can also own a major stake in these “farms” or just a very small or no stake, acting purely as a consultant or project management company, doing the subcontracting to major Wind Turbines or Solar companies. 

Hence, the developer can be completely asset light. 


NON-COMPETITION WITH SEMBCORP MARINE (SCM) FACILITATES MERGER

The disposal of rig business will mean that Keppel is entering into a non-competitive nature with SCM. KOM and SCM are two world’s largest oil rig builders, combining these two giants in the oil and gas sector will mean almost complete monopoly in this segment of business. 

KOM exiting Rig business is strategically clever. This  move can facilitate the Merger of Keppel and SCM without having the anti-competition watch dogs blocking the deal. 

Read:

Will Keppel Offshore & Marine and Sembcorp Marine Merge? 

To Merge Sembcorp Marine and Keppel O&M is NOT up to Temasek and Shareholders alone? Anti-competition Authorities may REJECT!

If KOM and SCM is merging, and with Keppel going to dispose all the yards, SCM main construction yard will be the Mega Tuas yard. SCM can then keep some smaller yards for repairs and conversion. SCM currently has Rig and FPSO EPC capabilities. Keppel has FPSO conversion capabilities. Both have shipbuilding and repairs capabilities that can easily be further merged to reduce cost. 


COST CUTTING 

Investors and shareholders always welcome cost cutting to maximise profits. Yet, this is cruel to KOM’s more than 10,000 employees. Many heads will roll eventually. Yards will also be all sold eventually unlocking assets. 

KOM only wanted to retain Operating Co – that is people with expertise and subcontracting to third parties. Most who work in the yards, with production expertise will have to bid farewell in a matter of time, leaving behind few with more knowledge who can help to manage the subcontracting process. 

However, total exit within a short time is not possible. It will have to be done in transitional manner over the next few years. Rig Co still need to sell or charter those rigs, that will take a long time. Development Co will also still need time to complete existing construction projects. 

The morale of employees in KOM will be very low. What motivations will the employees in Rig and Development Co have? Perhaps monetary incentives or promise to relocate to other Keppel’s companies or Op Co. But this will only be extended to a smaller percentage of the employees. 

Project and engineering people will start to look for jobs. The departure of good project and engineering people will mean existing construction projects adversely affected, with project budget ballooning. 


CONCLUSION

Following Keppel’s announcement of 2H2020 losses and her new strategy, share price tumbles more than 10 per cent, closing at SGD5.01. Price to book is 0.85 based on the most recent quarterly result. 

The important question: Will I buy into Keppel shares? 

The answer is No, for now. 

Transition of a business, especially downsizing will always cause great short term adverse effect to the business. Although it looks promising in the longer term, the business will take several years before it turns good again. And we have to wait and see if it really turns good. Better to put the money into many other companies that are doing better than in Keppel now. Maybe small allocation or for trading purposes is ok.