Food Junction

Wait for 2nd half results to confirm expectations

AGVA

Annonced 1HFY04 results, very disappointing to due increasing raw material costs because of high oil price.

To hold until annoncement of 2HFY04 results to assess the revenue growth.

- Expected revenue to growth from:
1. USA - new market which was described as huger potential
2. Japan - continue trend
3. Europe - moderate growth
4. China - due to acquisition of China sub. in 1 June 04 with huge distribution network

- Management ability to contain cost and improve margin of 1HFY04

- Operating cashflow should continue to be positive, although the company paid S$3.28M for a buidling in Aug04

- Continue dividend declaration amid lower amount

Initial investment merits - Thoughts

- make use of low manufacturing costs in China to produce for OEM worldwide

Fibrechem

Investment merits:
1. Strong cashflow
2. potential for increase in dividend yield
3. niche player
4. strong growth, average of at least 15% over next 2 years
5. garment market in China growing rapidly

Risks
1. Raw material priced - fluctuate with oil prices
- may be able to pass on higher cost to customer
2. Foreign competition?

Purchases made - see Trading Scapebook

China Flexible Packaging

This company looks interesting... strong operating cash, relatively large size, possible dividend declaration, high margin

Risk
- Product differentiation?
- Rising raw material cost - oil price

High dividend yield stocks

1. SMRT
2. Singpost
3. Bright Orient
4. SGX
5. SBS Transit

Setting Criteria

1. ROE > 15%
2. PE <>
3. Dividend yield > 5%
4. Consistent and predictable earnings
5. Positive operating cashflow, net cash position, minimum debts

e.g. Vicom