M1 Third Quarter 2016 Results

M1 share price plunged 5.15% today, a $0.12 drop, to $2.21 today. This is much expected from the poor 3Q16 results released yesterday.
穷小子 mentioned in the previous post that M1 is having a juicy dividend yield of 6.38%, but because of fourth telco is approaching, patience prevails, and still waiting at the sidelines. Take a quick look on the 3Q2016 results.

Key Financial Highlights

Operating Revenue
$277.6m to $249.1m, -10.3%

Cost of sales for 9 months
$380.9m to $294.6m, -22.7%

Net Profit after tax
$44.9m to $34.4m, -23.4%

Cash & Cash equivalents, -62.9%

Net debt. 20.5%

Net debt/EBITDA, 24.8%

EPS, -12.0%

All these financial leverage are statistically bad.

Enough of the current statistic facts, let's see the good side of it.
As we all have known, majority of Singapore's consumers are bounded by the traditional 2 years contracts. Hence, the customer base is one of the most important factors to estimate the future, which at least how 穷小子 think.

Key Performance

Mobile Customer base

Mobile Market Share

Fixed services Customer base

Well, at least its 2 main business pillars', mobile and fixed services, base are increasing, at least at a slow pace.

Conclusion
Based on today closed price, the yield is about 6.9%, but of course, pretty much expecting a heavy cut to the dividends. Cut by how much is the big question for a dividend stock.
The management outlook are estimating a decline in FY2016 net profit after tax to be around the year-to-date range.
Assuming there will be a drop of 16% in EPS for FY2016, and the payout policy remains at 80%, we may be having a dividend of 12.8 cents for the next FY.

穷小子 is expecting few bad news to happen which can really hurt M1's share price deeply.
- News of fourth telco
- FY2016 results
- Cut in dividend
- Finally the completion of fourth telco (depending)

Hence not intending to average down in the near future. The first step which 穷小子 will be taking would be either wait for the price to hit at least $2.00 (psychological level), or after the fourth telco decision announced. Depends on whichever earlier.

Lastly, bear in mind that the worst fearful concern is that, there is still no confirmation about a fourth telco yet, there is not even a first step made by the fourth telco, but M1 profits is already dropped hard. Imagine what can this fourth telco do more hurting if it realised.

P.S. 穷小子 is not spreading fear here. M1 is about 10.9% of his total portfolio now.

What to do during this period?

What to do during this period?

Ever since the epic Brexit event, STI finally surged above 2,900 points to 2,945 unexpectedly, before coming down to 2,803 in the following month. Subsequently, it has been ranged bound between 2,800 and 2,900.

Those banks, telcos and REITs stocks in 穷小子's watchlists did not have much movements during this period as well. The announcement of delaying the rates hike in September didn't have much impact on the market at all, perhaps all are well within investors' expectations.

The price at current level is not high enough for 穷小子 to take profits, nor low enough for 穷小子 to add more positions. No dividends for September and October. Honestly speaking, this is boring, and 穷小子 did not pay much attention to the market during this period too.

All these may actually become a good time for investors to take a breath and do a review

穷小子 did the following:

• Re-valuate the valuations of those stocks in the watchlists.
• Based on the valuations, set the price alerts for each of them.
• Forecast dividend's yield and set targets for next year

After doing all these, the forecast for next year's dividend yield is pathetic, at a low range of 4%. Seems that telcos and REITs valuations could be more attractive now in order to increase the yield. Especially with M1 at a dividend yield of 6.38% on today's closing price, it could be an eye-catching.
Nonetheless, we must not forget that IDA is gonna make announcements regarding to fourth telco by the end of October, and rates hikes' decision will be made in December. These are the two major factors which will affect these two sectors respectively. Lastly, the much anticipated US President election will be around the corner as well in November.

Apart from all these, STI may continue to stagnant awhile, for at least after Chinese New Year which is Jan next year. Furthermore, the dividend seasons are pretty much over for this year.
These are all the reasons which why 穷小子 has not made his purchased yet. Patience ^^

穷小子 is almost 85% invested, hence this may be his last shot for any good bargains in the market.

穷小子 Style

What is 穷小子 style? Is very simple. Living with a frugal lifestyle in a materialistic society and aiming to achieve financial freedom for the future.
There is a thin line between 穷小子 Style and being stingy style by his definitions. 穷小子 would spend and pay only for what he think is worth, but a stingy guy doesn't even have this traits at the minimum.

Try to maintain a $4 per meal for weekdays (working days). Which these are almost being covered by the current passive income.
Better still. Sometimes only spend $2.20 on Zhar Cai Peng (mixed vegetables rice), with only one meat and one vegetables. Don't worry, 穷小子 is not torturing himself, he is just a person who can finish only a bowl of purely white rice only.

Doesn't go foodcourt.
In 穷小子's opinion, food in foodcourt doesn't taste take good, it is often over-priced. Still prefer the hawket centre and those authenticate market style type.

Doesn't buy drinks when having his meal.

Doesn't buy coffee or tea, only takes self-made 3-in-1.
Can have have a Cadbury hot chocolate from the many choices.

Seldom buys new clothes, accessories, or shoes.

Prefer to choose walk if it is only a two bus stops distance, or sometimes even three, depending on the actual distance.
Walking is a good form of exercise.

Doesn't take cab when travelling alone even though it may took more than an hour via public transport.
Unless it is an emergency case.

Doesn't eat over-priced ice-cream.
He will be just as contended with only a $1.50 hot fudge ice-cream from McDonald's.

Didn't sign up for any Gym membership.
Still don't understand why is there a need for signing up a Gym membership. With or without gym, the process of exercise would still the same, except perhaps that there might be peer pressures when in a Gym. He do have a set of dumbbell at home, and can do almost various types of Gym-type level of exercise in a community fitness corner and parks.

Doesn't watch movies in a cinema. Especially doesn't purchased the popcorn set even if he visits one.
Most of the shows can be watched via online in nowadays.

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Now let's talk about the opposites sides.

穷小子 has at least a good meal in almost every weekend at a restaurant with his loves ones or family.
Spending average of around $30-$50, or even more sometimes when there is an occasion to celebrates.

穷小子 loves to eat.
Doesn't go to foodcourt but once in a while, will spent over hundred for a sumptuous meal, especially an International Buffet style to pamper himself.

穷小子 in fact loves plain water actually.
If there is a need, he can always go to a supermarket nearby to buy a drink which is way much cheaper than those from foodcourts' or hawker's (with the same types of drinks). NTUC is everywhere to be seen in nowadays.

穷小子 will go for a tea breaks at a cafe too.
Enjoy Starbucks or Coffee Bean once a fortnight averagely.

穷小子 only wears normal brands of clothing such as H&M, Aeropostale, Uniqlo.
Most of them are bought during the sale. Great Singapore Sale!!

穷小子 doesn't mind to pay for cab when there is/are companions.
Mainly because he has the mindset of that why not fully utilized the empty seats if he is commuting one. Doesn't mind to foot the bill too.

穷小子 will visits Cold Stone once in a blue moon.
Expensive? Yes. Worth it? Yes too.

穷小子 got a Safra membership at least for the exercise activities.
Willing to pay for a marathon event as well on top of that.

穷小子 willing to buy tickets of a blockbusters movies only.
He loves Marvel especially. Not only to watch them in a cinema, but purchased Atmos, 3D, etc. Have not tried GV Gold Class yet.

If you have for about more than 75% of those mentioned traits. Congratulations!! Welcome to 穷小子's style.
These are of course the few traits which came across his mind for now, perhaps shall update more to this along the way.

Money is important, but to live life to its fullest is equally important as well. Do not sacrifice your friendships or families bonding time if is just for the sake of saving the money.

The chances of these bonding will gets slimmer as times flies, especially when most of your friends starts to have each of their own families. Although these friendships and kinship are still close, you will not be able to meet up with them that much as before, and oftenly with due to each one's commitments. An experience from 穷小子. Remember, You Only Live Once. #YOLO

穷小子 used to splurge and spent lavishly on his drinking sessions, parties, gambles and on the branded during his younger days. Perhaps because he is in his the early 30s now, and have been through all these stages of life already, his mindsets and directions have changed.

Whether you see if 穷小子 is stingy or not, is up to one's perceptions. To him, it doesn't matters. Living with freedom and happiness, and a healthy with loves ones, is all that does matters right now. This is his belief after all.

Portfolio Update: CapitaLand Commercial Trust (CCT)

Have just reduced about 40% of CapitaLand Commercial Trust (CCT) holdings from the portfolio last week. Is not that 穷小子 had lost his confidence in the company, but is more due to re-balance the portfolio.

CapitaLand Commercial Trust (CCT) had a good run for the past 3 months, from $1.385 to $1.64, which gives about 18.4% return. A 18.4% profits is roughly about 3-years worth of dividends. By looking from another angle, the dividend yield drops from 6.28% to 5.3%. 穷小子 feels that there may be a profit taking session for those short term holders on this counter in the near term after such a run. Moreover, coming up would be Fed's decisions on the rate hikes and of course the US President election.
With all these reasons, 穷小子 used this opportunity to build up his war chest instead.

There is still 60% of CCT sits in 穷小子's portfolio and no doubt adding REITS into the portfolio is still one of this year's resolution,

CapitaLand Commercial Trust (CCT)

Poorlearnrich's portfolio update

The month of July and August, the second half of dividend collection! Let's have a portfolio update.

穷小子's portfolio update:

For the period of these two months, 穷小子 will be receiving a total of S$1,755.55 in dividends.

Dividends received this round: S$1,755.55

Year 2016
Total dividends: S$3,552.70
Average dividends per month: S$444.09
Average dividends per day: S$14.56

穷小子 still trying hard to increase his dividend yield for his portfolio. Although did mention that was trying to get REITS in his portfolio, still didn't manage to do so. FCT did have a sudden drop at June, but didn't notice that that day, and it recovers fast and furious subsequently. Maybe will have a chance again when rate hikes. Anyway, got FCL instead.

Been 3 weeks since the last post due to Pokemon fever. Hehe~