Ernest Lim's investing blog

Unique insights into SGX small caps

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China Railway Construction (01186.HK) – Bargain buy, or value trap? (22 Sep 2020)

el15

China Railway Construction (“CRCC”) recently caught my attention as it has tumbled approximately 44% from an intraday high of $9.99 on 5 Mar 2020 to close HKD5.64 on 21 Sep 2020. Is this a bargain buy, or a value trap? Let’s take a look.   First up, a description of CRCC Quoting from its 1HFY20 results, CRCC’s businesses cover a variety of construction, survey, design and consultation, manufacturing, real estate development, logistics and materials trading and other business with refined industry chain covering scientific research, planning, survey, design, construction, supervision and management, maintenance, operation, investment and financing, etc.   Six […]

Riverstone – Is the recent 32% decline justified? (12 Sep 2020)

el15

Riverstone recently caught my attention. It has tumbled approximately 32% from an intraday high of $4.90 on 7 Aug 2020 to close $3.33 on 11 Sep 2020. One client even thought that Riverstone has already undergone a bonus issue! The recent weakness is likely attributed to its co-founder selling 15.5m shares at $3.95 (Bloomberg cites a 90-day lockup on seller); the possibility of a vaccine resulting in demand for gloves and consequently their average selling price (“ASP”) falling off the cliff and some Malaysia investors selling shares to raise cash, as their moratorium on loan repayment ends (click HERE for […]

Recent weakness provides accumulation opportunities (9 Sep 20)

el15

Dear all Based on Table 1 below, U.S. indices have fallen between 5.5% – 10% from the close of 2 Sep to 8 Sep. Nasdaq led the decline with a 10% drop. These are interesting times indeed! Why do I say so? Read on below. Table 1: Performance of various indices from 2 Sep to *8 Sep 20 Source: Ernest’s compilations (*STI and Hang Seng are based on 9 Sep closing prices) In my personal opinion, this recent U.S. market weakness provides accumulation opportunities for the well prepared and for those who have been waiting on the side-lines to accumulate […]

Stocks sorted by total potential return (7 Sep 2020)

el15

Dear all U.S. markets have fallen sharply with Nasdaq dropping almost 1,200 points or 10% from an intraday high of 12,074 on 2 Sep to an intraday low of 10,876 last Fri. For example, Apple Inc. has lost $219b in market cap from the close of 1 Sep through 3 Sep which is larger than the market cap of Exxon Mobil Corp., for long the world’s largest company! In view of the recent decline, some clients have asked me which are the stocks that they can look at. Below is my compilation of the top ten stocks and the bottom […]

Wilmar – Is this a good time to accumulate? (2 Sep 2020)

el15

Wilmar recently caught my attention. It has fallen approximately 11% from an intraday high of $4.95 on 7 Aug 2020 to close $4.41 on 1 Sep 2020. Six points attracted me to Wilmar. Let’s take a look. 1. Imminent catalyst i.e YKA IPO – left one approval to go Wilmar cited that its Chinese subsidiary, Yihai Kerry Arawana Holdings Co., Ltd (“YKA”), has obtained listing clearance from the Shenzhen Stock Exchange (“SZSE”) ChiNext Board Listing Committee (the “Committee”) and has submitted the updated prospectus to the China Securities Regulatory Commission (“CSRC”) for final registration approval for listing on SZSE ChiNext Board […]

Starburst – building order books; bright outlook (24 Aug 2020)

el15

In May 2019, I met Starburst’s Managing and Executive Director Mr Yap Tin Foo. Since Mar 2020, Starburst has been on a roll in winning contracts and I believe it is an opportune time to meet Mr Yap again. Despite Mr Yap’s busy schedule, he agrees to meet me on 1-1 basis to share his company’s business operations and prospects. Below are some of my takeaways from my discussion with him and from its recent results briefing.   Company description Quoting from Starburst’s press release, it is an engineering specialist in a niche industry, and designs, fabricates, installs and maintains […]

China Everbright Water and NetDragon look interesting… (30 Jul 2020)

el15

This week, notwithstanding the continuous interest in glove companies, pharmaceutical companies etc, there are some companies which seem to have some steady inflows, based on chart observations. Two companies come to my mind, namely NetDragon and China Everbright Water Limited (“CEWL”). What is so interesting about the above companies? Let’s take a closer look at its chart and other noteworthy points. 1. NetDragon – on an uptrend, with all 13 analysts calling it a BUY Company description – before I delve into the chart… Some readers may not be familiar with NetDragon (HKSE: 0777). According to NetDragon company description, it […]

Chart alert! Yoma may breach $0.280 in the near term (23 Jun 2020)

el15

This week, Yoma catches my attention on a spike in share price, accompanied with an expansion in volume. Let’s take a look.   Chart analysis Yoma’s chart has been on a short-term uptrend since 24 Mar. ADX last trades 22.2, amid positively placed Dis, indicative of a trend. Its short term exponential moving averages (“EMA”) are rising steadily and its long term moving averages (namely 200D EMA and 200D SMA) are plateauing. Indicators such as OBV and RSI are strengthening. Volume has picked up significantly today and yesterday which may signify good odds of breaching its key resistance $0.275 – […]

China Everbright Water – bullish break above trading range (10 Jun 2020)

el15

This week, China Everbright Water Limited (“CEWL”) catches my attention this week. Since 17 Mar 2020, CEWL has been trading sideways from $0.200 – 0.230. Based on chart, CEWL seems to be on the verge of a breakout. It last trades at $0.235. What is so interesting about CEWL? Let’s take a closer look at its chart and other noteworthy points.   CEWL – Broke out of 2+ month trading range with volume expansion Bullish chart underpinned by rising EMAs and volume Based on Chart 1 below, since 17 Mar 2020, CEWL has been trading sideways from $0.200 – 0.230. […]

S&P500 has rebounded 31% from 23 Mar 20! Time to buy, hold or sell (19 Apr 20)?

el15

S&P500 has staged a whopping 683 points, or 31% rebound from its intraday low of 2,192 to close 2,875 on 17 Apr 20. Many clients have asked me (almost daily) whether we have already seen the bottom and is this a good time to buy stocks etc. At 2,875, S&P500 is just 15% away from its record intraday high of 3,394 on 19 Feb 2020. The rally in Wall Street is at a stark contrast to grim news from Main Street in terms of job losses; significant number of deaths from Covid 19; lockdowns and poor corporate results. Both bull […]