8th Sep 2023 portfolio update

Introduction

This week was dramatic with the a good swing in markets and nice drops. We expect such drops create opportunities to enter the market and reposition. For us, we did multiple trades to reduce the cost, but at end we kept almost same ownership in the portfolio. Biggest impact was from the high drop and swing of STG, but we have full trust in the share in the mid-term and that will support the portfolio till end of 2023 from current prices. The major line in portfolio and STG remain supported. Changes summarized as below and will be explained at below sections.

1. Trading in IMPP, selling third quantity @ 1.54 and buy back @ 1.35
2. Trading in STG, selling around 3% of STG @ 9.4 and buy back @ 8
3. Increase ownership in Baba
   

Imperial pick IMPP has imperial management !!

After the success with STG, we were searching for same fundamentals and IMPP caught our focus. We usually buy with time and monitor the stock and its news and dive to its history. From what we found newly that IMPP management has mixed work toward shareholders. So, IMPP current financials is amazing, but with its management way, it could be not in the future. What is the issue ?!

We noticed continuous issuing of units and warrants convertible to new ordinary shares at very low prices ! No specific identity of the owner of those warrants and units except they are institutional ! For us, we understand that you can get new cash from loans that require interest payments or issuing new shares, but why the issue of new shares at low prices like $1.25, $1.5 or $2 while the share is trading multiple of this price. They could expand from the profits and not sell the company for low for others.

This week strangely management announced a buyback program for its shares. Market just responded for a day. That could show the non-trust.

What is the conclusion? For those historically bought the share above $46, they are theoretically gone ! Such prices will not come back based on current conditions. But for us and based on above, all those conditions created volatile environment and the share change direction highly up and down with good volumes. For us, IMPP is good pick for trade and those institutions bought units for $2, $1.5 & $1.25 will provide the support for current low prices. We still keeping IMPP in our portfolio, but will not raise for now except for trading requirements.

Insane STG

STG still show good movements even when declining. Volumes are mostly higher than average and management is already owning more than 50% of the company and doing well toward the company either by reducing operating expenses, paying dividend for last year, or initiating a buying program to its shares. We remain confident about STG during the time remaining for this year. The swing happened this week, prove the requirement of balancing the portfolio. But, at the end STG is our main portfolio ownership.

Baba, blue-ship safe

It was long when we bought Ali Baba. We still feel the current prices is a bargain and with current market drops, we can’t ignore even reduced bargain and our focus came to Baba below $90. By current increase, we awarded Baba the 2nd rank in our portfolio and will continue moving toward portfolio stability. The spin-off of profitable Ali Baba clouds is coming closer and that will profit the owner of the mother company. Even conditions in China is improving and even the worry of China governments working against Baba is easing. Instead governments is providing support. Baba is one of the highly profitable companies in China and the world. So, your money with Baba is in the safe.

Conclusion

As all our steps this week explained, we provide the changes to our portfolio % ownership and performance as below. STG drop in ownership driven by being the highest to be drop in price. For portfolio performance always remained better than global markets.

#	Stock	% (1/9/2023)	% (8/9/2023)
1	STG “Sunlands Technology Group”	68.5	63
2	BABA “Ali Baba Group”	7	10
3	IMPP “Imperial Petroleum”	7	7.5
4	AFLYY “Air France KLM”	4.5	5.5
5	AAP “Advanced Auto Parts”	4	4.5
6	MQ “Marqeta”	3	3.5
7	DNFGY “Dong Feng Automobile”	2	2
8	SMTSF “Sierra Metals”	2	2
9	CALM “Cal Maine Foods”	2	2