Ernest Lim's investing blog

Unique insights into SGX small caps

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Singapore – Asia’s worst equity market YTD, any opportunities ahead? (29 Oct 20)

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Dear all It is less than a week from the U.S. election. U.S. markets are understandably jittery. S&P500 has fallen 316 points, or 8.9% from its intraday high of 3,550 on 12 Oct 2020 to touch an intraday low 3,234 on 30 Oct 20. In fact, S&P500 has tumbled 195 points or 5.6% this week. S&P500 closed at 3,270 on 30 Oct. The media has written extensively on the risks surrounding U.S. election since months ago hence the election event risk is hardly a new one. Examples of risks which media has written about is the possibility on contested election […]

UG Healthcare – 6 interesting aspects on UG which caught my attention! (26 Oct 2020)

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Dear all, UG Healthcare (“UG”) recently caught my attention. It has tumbled approximately 20% from an intraday high of around $1.15 on 7 Aug 2020 to close $0.915 on 26 Oct 2020. The doji formation on 26 Oct 20 on good volume may be an early indication that selling may abate in the near term. The recent weakness in UG’s share price is likely attributed to profit taking in the share prices of its Malaysia listed peers and occasional news on the development of vaccines which may result in demand for gloves and consequently their average selling price (“ASP”) falling […]

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

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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)

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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 […]

S&P500 at 2,979 – limited potential upside (8 Sep 19)

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With reference to my earlier write-up (click HERE) titled “Why am I cautious going into July…”, July was coincidentally the peak for S&P500. Hang Seng touched an intraday high of 29,008 on 4 Jul 2019 before slumping 4,108 points to an intraday low of 24,900 on 15 Aug 2019 (Hang Seng closed at 26,691 on 6 Sep 2019.) Personally, given the current market levels and information, I am not comfortable to raise my current percentage invested from 53% to significant levels (say >80%). Why am I cautious in the market? Do read on…   Factors supporting my cautious basis Above […]

HRNet – All time oversold levels amid lowest price since IPO! (29 Aug 19)

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Dear all Another exciting week! This week, HRNet caught my attention as it approaches all time oversold RSI level. In addition, it is trading at the lowest price $0.560 since its IPO price at $0.900. Given the basis below, my personal view is that HRNet may be presenting a favourable risk reward setup for a long trade. Do look at the basis and more importantly, the risks inherent in such trades.   My personal basis a) Average target price $0.93! Based on Figure 1 below, average analyst target is around $0.930, representing a potential capital upside 66%. Estimated div yield […]

CKH Holdings at 19-year oversold levels; multi-year low price amid 10-year low valuations (6 Aug 19)

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Dear all What a hectic and exciting week! This week, CKH Holdings (00001.HK) (“CKH”) caught my attention with its 19-year low RSI level since end Dec 2000. At the time of writing this, CKH last trades at HKD67.60, level last seen around 21 Feb 2014. With such a precipitous decline, CKH is trading below its 10-year average valuations. Given the basis below, my personal view is that CKH may be presenting a favourable risk reward setup for a long trade. Do take a look at the basis and more importantly, the risks inherent in such trades.   My personal basis […]

Why am i cautious going into July… (2 Jul 19)

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Dear all, With reference to my market write-up published on 29 May 2019 (click HERE), where I mentioned that the sell-off in the markets revealed interesting trading opportunities, markets coincidentally bottomed on 3 Jun 2019 and staged a strong recovery. I have already sold into strength and reduced my percentage invested in stocks from 150% in early June to 12% now. Personally, I am cautious in the market going into July. Why is this so?   Basis below 1) Markets jumped yesterday following the U.S. / China trade truce announced over the weekend, despite the lack of details on what […]

Halliburton trades at 9-year low price, amid 10-year low valuations (17 Jun 19)

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Dear all This week, Halliburton (“HAL”) caught my attention as it closed at US$21.38 on 14 Jun 2019, lowest since 1 Jun 2010 and 7 Aug 2009, amid 10-year low valuations. Given the basis below, my personal view is that HAL may be presenting a favourable risk reward setup for a long trade.   Potential basis to long a)  At US$21.38, this is the lowest close since 1 Jun 2010. At 12.5x current PE and 1.9x P/BV (see Figure 1 below), these valuations seem attractive as compared to its 10Y average PE and P/BV 29.3x and 3.2x respectively; Figure 1: […]

Hang Seng & STI have fallen close to 2,900 & 250 points in one month! (28 May 19)

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Dear readers, Asian markets have fallen quite a bit in the past one month. For example, Hang Seng has fallen close to 2,900 points since touching a high of 30,280 on 15 Apr to trade 27,391 which is the low last seen in January. STI has fallen almost 250 points from an intraday high of 3,415 on 29 Apr to close 3,165 today. Looking at the indices may be deceiving as many shares have fallen a lot. For example, based on Table 1 below, most stocks have fallen at least 10%, with Sembmarine tumbling almost 17% in less than a […]