Disclaimer:

The blog entries do not represent a recommendation to buy or sell. Please consult your financial experts before making any decisions.

Friday, December 27, 2013

Buying OCK

OCK is a company principally involved in provision of telecommunication network services. It's clients include the likes of Maxis, Digi, U-Mobile, Huawei and Ericsson. 

The main attraction of this company is the communication tower business. As a holder of Network Facilities Provider (NFP), OCK is able to build and lease the base stations to telco operators and providers in return for recurring rental income. 6 of the 7 local telco network providers are OCK's client and business partners. I believe that sharing of sites or towers is the way to go in the future due to the potentially lower rental rates enjoyed by telco operators. This is a win-win situation for OCK and telco operators. 

Last year, OCK built and acquired 60 sites for transmission station. They managed to increase that to 150 sites this year with some juicy recurring earning to expect in the coming quarters. The 150 sites would potentially contribute RM8-9 million p.a. to their top line and RM2 million p.a. to bottom line. The target for 2014 is to have another 300 sites. In addition, they also secured jobs from Digi to upgrade 400 of their existing sites to LTE 4G. In the Budget 2014 there is also an allocation of RM1.5 billion to build 1000 towers in rural areas within the next 3 years. OCK should be able to secure a few of these towers.

Other than the tower busines, another potentially lucrative segment for OCK is the solar power segment. Solar business is very lucrative since one only needs to invest upfront and reap the returns for a long long time. OCK currently owns a 1MW solar farm in Kelantan with concession period of 21 years. This farm delivers lucrative recurring income of RM1.4 million p.a. to the top line. The break-even period is about 5-6 years. And OCK plans to own up to 30MW within the next 3 years.

Another positive development by OCK is the expansion into Myanmar and Cambodia. These two countries offer many new jobs due to the lack of infrastructure there. 

In August 2013, OCK placed out 10% of its stock to LTAT at 47 sen a piece, for a total of RM12.1mil to fulfill the bumiputra quota in preparation to list in the main board. Although LTAT has disposed some of it's holdings in the past few days, I reckon that is just a normal year end book balancing by the fund.  

One caution though, is that the promise to list in the main board by September- November has lapsed. Well, investing always have risks. So I am in and bought 5000 units @ RM0.78 of OCK. Ah Bu fund looks like this now:


Financial assets at 27.12.2013

Name
Purchase Date
Purchase Price
Current Price
Unit
Current Value
P/L ex Dividend
Dividend
P/L inc Dividend
Cash
Hle-Broking


20098,03





Stocks
OCK
27.12.13
0,78
0,77
5000
3850
-1,8%
-1,8%
Sunreit
04.10.13
1,40
1,23
5000
6150
-12,0%
89,25
-10,7%
Cypark
22.10.13
2,17
2,52
3000
7560
16,1%

16,1%
Datasonic
19.11.13
1,70
2,13
7500
15975
25,5%

25,5%
Total Stock
33535,00
62,5
%
Total cash
20098,03
37,5
%
Total
53633,03
Current profit
3633,03
7,3
%
Total dividend
242

ps: Datasonic underwent a 1-to-5 share split on 23.12.2013. Thus the number of units are now 1500*5=7500.

Sunday, December 22, 2013

Starting it up

My mom is a fan of fixed deposits and it is understandable since she is almost near her retirement age and hence capital protection is naturally her top priority. However, it is in my honest opinion not a wise investment since the inflation rate will erode her money over time. So I have decided to be her "Fund Manager". Here is the arrangement: She will provide me RM50k as capital and I will give her 10%-capital-protected-annual return. So that is how this fund started. BTW, this fund has a unique chinapek name: Ah Bu's Huat Fund.

Investing is never an easy thing to do and to describe. Some say it is an art while some use all imaginable calculation methods to justify it. For me, it is mixture of both. We can analyse and identify good stocks but the price movement is out of our control. It might take days, months or even years for some stocks to receive some recognition from the market. Along the way we will have to pay some tuition fees in terms of money lost. I must admit that I am not a skillful investor due to repeated mistakes (buy high, sell low; buy on emotion; buy on rumour; etc). But I believe everyone can invest successfully, provided he or she puts in efforts and is willing to learn along the way and also has some lucks too.

So in this blog, I will analyse some suitable stocks and also update the fund portfolio. The fund started officially on 15.10.2013. The current portfolio at 22.12.2013 looks like this:

Financial assets at 22.12.2013

Name
Purchase Date
Purchase Price
Current Price
Unit
Current Value
P/L ex Dividend
Dividend
P/L inc Dividend
Cash
Hle-Broking


24018,02





Stocks
Sunreit
04.10.13
1,39
1,27
5000
6350
-9,1%
89,25
-7,8%
Cypark
22.10.13
2,17
2,43
3000
7290
11,9%

11,9%
Datasonic
19.11.13
8,48
9,91
1500
14865
16,8%

16,8%
Total Stock
28505,00
54,3
%
Total cash
24018,02
45,7
%
Total
52523,02
Current profit
2523,02
5,0
%
Total dividend
242