Tuesday, October 2, 2018

Big Idea 4 & Big Idea 6 - SOLD!

I have officially disposed all my positions in Big Idea 4 and Big Idea 6. Since I have already sold, I will reveal what Big Idea 4 and Big Idea 6 are.

Big Idea 4 is…Ellipsiz Ltd.

In my last post, I have stated that “In 2 months’ time, it will announce its full year results and more answers on the use of its cash pile could be reveal in its financial report. Therefore, I will decide then on what to do with this company….”

After the release of the annual report and receiving a reply from the investor relations, I have decided to offload all my position in Ellipsiz Ltd at a loss. Nevertheless, do note that this loss was based on my re-entered price. I had previously made a 280% gain on the company prior to selling all at its peak.

So what were the factors that caused me to sell off this Big Idea?

1. Annual Report
Abstract from Latest Annual Report
In the above abstract, it seem like the Lums are intending to use this company as their investment holding firms. Other than investing in Kalms, they had yet to do anything else with their cash hoard.

In my opinion, the strategy seem to be a bit directionless. It sounds like “I will invest in any undervalued opportunities”. It is not a wrong strategy but I believe there are other better/more established investment holding firms for me to invest in.

2. Reply From Investor Relations
My Question

Their Reply

If you read through the reply, you will probably get the W** feeling. "Say like never say". Maybe even they do not have an answer?

Thus, the above factors made me consider my holdings in Ellipsiz Ltd seriously and I decided its time to offload the company fully.

Big Idea 6 is… Sysma Holdings Ltd.

I did not talk much about the company because StockResearchAsia has already wrote a lot on the company.

Despite the positive vibe in the blog posts by StockAsiaReport, I still decide to sell the company due to the following:

1. Dividends below expectations

Despite having so much cash, the company only increased the dividend from 0.5 cents to 0.8 cents. I was expecting a much higher dividend payout but I guess the management had other plans.

2. Lack of Catalysts

I do not foresee any other catalysts in the next year for the company, other than using its cash to acquire other companies. Furthermore, with so many en-bloc condo purchases by the developers, I do not foresee Sysma Holdings Ltd having significant opportunities in its niche market - the construction of GCB projects.

3. Other Opportunities

Better opportunities in other construction companies has arise and the time seem right.

Thus, in view of the above reasons, I decided to sell all of Sysma Holdings Ltd at a slight profit!

Please do your own due diligence before you take any action on the above counters.

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