The Partnership Portfolio

I have explained in earlier post a brief history on the origin of AIN Partnership portfolio and where it stands now. Please take a look:

Stocks of Company	Gross Investment	Market Value	% Profit & Loss	Portfolio Percentage
A	4,300.00	5,360.00	24.65%	22.62%
B	2,562.00	2,820.00	10.07%	11.90%
C	2,660.00	2,725.00	2.44%	11.50%
D	2,552.00	2,640.00	3.45%	11.14%
E	2,453.10	2,509.00	2.28%	10.59%
F	2,384.20	2,429.00	1.88%	10.25%
Others	4,172.50	5,105.00	22.35%	21.54%
Cash	109.42	109.42	-	0.46%
Total Portfolio Value	21,193.22	23,697.42	11.82%	100.00%

* Figures in Ringgit Malaysia (RM)

** Cash includes dividends received and realized gains before being utilized for stocks purchase in the beginning of the year.

Stock A belongs to one of the senior citizens of Bursa Malaysia whom primary business is car distribution and property management. I bought them when the stock price is exactly the same as the amount of cash per share (a staggering RM4.30 per share). I should have bought more instead of placing a restriction of “maximum 25% of portfolio in one stock”. Lesson here – if you did all your research well and you have full conviction that your reasons to buy a stock are right, by all means load up at a fair if not cheap price.

A savings and loans company partly owned by Employees Provident Fund (EPF) is represented as Stock B. They made it big in personal financing in the public sector. I lived in Putrajaya and one can clearly see how these personal financing schemes boomed by the number of leaflets in the mailbox.

Stock C is a clothing brand company with exceptional growth for the past ten years in a competitive retailing industry. I like them so much that I made sure I only buy my working pants from them since I started working. What more can you do to make sure they returned the money to you as dividends?

Stock D is a Sarawak-based infrastructure company who has recorded above 20% ROE for the past five years with above 15% NPM consistently. I find no other reason to own part of the company except for how fair they are selling now relative to their growth and strong balance sheet. And oh, they started their business with swamp land reclamation.

Stock E is a vessel builder company operating out of Sabah. I have been in oil & gas industry for few years with direct exposure to offshore supply vessel (OSV) operations, and I can see the tremendous potential in it. The number of companies entering the business grew, and more Datuks than not tried to get into it. You ought to know who can profit from their ventures – the builder of the vessel that the Datuks buy.

Stock F represented a company whose chief business it acting as agents to their principal in product distribution. In East Malaysia they conquer everything from FMCG products to building materials. I’ve been a salesperson before (still am) and I can appreciate the fact that if you cannot get high margin, seek volumes. The company’s NPM was historically below near 5%, ROE was so-so at 8 – 10%. But look at the East Malaysia map – just how many more consumers can there be? Next stop – Peninsular Malaysia.

The ‘Others’ is collection of stocks that individually does not reach 10% threshold of total portfolio size, so I find it less compelling to share. Most of them were companies whose financial statements I deemed attractive, but not enough studies were made to warrant a bigger position in their stocks.

In total, there were 12 stocks that the Partnership owned as of 30^th December 2011.