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Singapore Investment


Review 2022 & Preview 2023

Year 2022 was a bad year to me in term of stock market investment in which my portfolio lost 16%.

The table below shows the stocks in my portfolio at the beginning and end of year 2022. Only 3 out of 14 stocks manage to end the year in positive territory.

These 3 stocks are Hibiscus, Master & Uchitec.

Apart from the hopeless Fast which has already been "impaired" long time ago, JHM & MI are the worst performer of the year with a 57% & 44% loss respectively.

MI was only added into the portfolio in Jan22. At that time, it has already fallen 50% from RM5 to RM2.50.

I didn't buy and sell a lot in 2022. Besides MI, I added LEESK into my portfolio, top up more JHM & Krono's shares and traded LTKM.

This "tech-heavy" move is the main reason that makes 2022 a bad year for me.

I sold and removed LeonFB, Jaks and Master from my portfolio in 2022. It seems like I disposed Jaks too late and Master too early...

For this year of 2023, I guess tech stocks might not do very well due to the semiconductor downcycle.

Even though tech stocks have dropped a lot last year, they are still at PE of more than 20x. Those "hot" tech stocks with bright future are still traded at PE of more than 40x.

Nevertheless, I don't think I will dispose my tech stocks frantically. Some adjustment might be needed though.

Majority of tech related companies might post lower revenue and profit this year compared to 2022. I do hope that their share price will not drop heavily like last year.

Here and there I read that most experts are pessimistic about the economy in 2023. It seems like the recession risk is very real this year.

Cryptocurrencies have suffered quite a bit lately. If it were to collapse with a domino effect, is capable to result in a financial crisis?

I don't know whether this will ever happen because I don't understand crypto much. That's why I haven't touched it.

Which sector will prevail in 2023?

Apparently financial sector has a great 2022 and it might continue to do so in 2023, of course unless recession hit.

Oil & Gas sector started to pick up towards the end of last year and it might continue its momentum into this year.

Nevertheless, Brent oil price has retreated slowly to USD80 level from USD120 per barrel.

Even though there is high inflation, I think certain consumer or retail stocks might do well as they can earn more from passing the cost to consumers.

Renewable energy stocks were hotly chased after 1-2 years ago. Will this theme come back this year?

Glove companies might continue to post losses this year but I feel that their share prices might have already reached bottom.

Ringgit has bounced back significantly against USD from RM4.75 in early Nov22 to RM4.31 now.

It seems like it might continue to strengthen in 2023. Thus, export orientated companies might not enjoy forex gain like last year.

Many furniture companies reported magnificent financial results in 2022. However, market valued them at PE around 5-6x only, may be because they expect lower profit in 2023.

Metal related stocks have also slipped quite heavily from their heights in the first half of 2022, as commodities prices soften.

It seems like year 2023 might be a fluctuating year for most of them, as the market tries to determine a fair price for them.

Palm oil price also can't escape from major correction. It has dropped from RM7,000/T in May22 to below RM4,000/T now.

It is still a good price though for the planters but personally I don't think plantation stocks will be in trend this year.

Logistic sector looks OK to me except last-mile delivery, which together with telecommunication and utility companies, might have a hard time.

We are short of chicken eggs and poultry meat but poultry related companies have to survive on government's subsidies as they can't increase their selling price.

Cost of chicken feeds such as soybean & corn are still relatively high compared to pre-Covid era.

For property sector, the number of transactions and value recorded in the first half of 2022 increased more than 30% compared to the same period in 2021.

I guess for the whole year of 2022, property sales will not be too bad.

Coming into 2023, with increasing interest rate and inflation, I don't think many people will rush into buying property.

There is no property boom after this low interest rate environment. However, I can feel that there is a slight increase in property price recently.

How about the construction sector?

Besides Gamuda who sold its highway to government, I think the share price of most construction companies do not do very well in 2022.

With a new government, will the construction sector finally revived after being "dead" for so many years? Or will it get worse?

Labour shortage and increase cost pressure are still the issue faced in construction sector.

When property market is softer, we won't expect many contracts for building construction.

Infrastructure construction might be a catalyst for construction companies if big projects such as MRT3 are being carried out.

As a Penangite, I hope that the LRT project in Penang island will be implemented as soon as possible.

Malaysia will have state elections for 6 states this year. After seeing what has happened to Sabah lately, I'm a bit worry about the stability of unity government in the next 5 years.

If we are politically stable and free from economy recession this year, and the stock market is good, then we will see those low PE stocks price going up to where they should be.

At the moment I still don't have any idea of which great stock to add into my portfolio. Perhaps I've become more cautious in stock selection.

For those existing stocks:

Fast: hopeless

Gtronic: hopefully can maintain a stable result of EPS 7sen & dividend 7sen.

Hibiscus: wish it can reach my target price of RM1.50, Brent to stay around USD80.

JHM: who knows the new customer will come back to it?

Krono: growth seems limited, can the China factor be a positive surprise?

LeeSK: not as expected but not too bad.

Maybulk: just acquired a new business with small profit contribution, not too exciting.

MFCB: affected by strong Ringgit, but cash will be robust, looking at longer term.

MI: hope SMBU to save the day.

MyNews: should be able to achieve consistent profit soon barring any unforeseen circumstances.

Rhonema: forget about milk, hope for organic growth.

Scientex: Should have sold above RM4.50, might say goodbye after 10 years if above RM4 again.

Uchitec: Expect EPS to drop 25% due to tax & forex, guess should have priced in now.

That's all. Wish everyone a prosperous and productive 2023!


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