SATS - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
01/11/17	UOB Kay Hian	SATS	4.94	4.5	Hold
01/20/17	DIR	SATS	5.19	4.97	Hold
02/02/17	Credit Suisse	SATS	5.26	4.9	Neutral
02/08/17	UOB Kay Hian	SATS	5.15	4.5	Hold
02/10/17	CIMB	SATS	4.98	5	Hold	DCF & PER19x CY19
02/10/17	DIR	SATS	4.98	4.93	Hold	DCF
02/10/17	Kim Eng	SATS	4.98	3.76	Sell	PER17x FY18
02/10/17	Lim & Tan	SATS	4.98	0	Hold
02/10/17	OCBC	SATS	4.98	4.7	Hold	Buy @ $4.40
02/10/17	phillip	SATS	4.98	4.73	Neutral	DCF
02/10/17	UOB Kay Hian	SATS	4.98	4.6	Hold	DDM, PER23x FY18, Buy @ $4.30
03/21/17	DIR	SATS	4.82	4.93	Hold	DCF
04/03/17	UOB Kay Hian	SATS	4.88	4.6	Hold
04/07/17	Credit Suisse	SATS	4.89	4.9	Neutral
05/03/17	UOB Kay Hian	SATS	5.12	4.6	Hold
05/18/17	CIMB	SATS	5.28	5.17	Hold	DCF & PER19x
05/22/17	CIMB	SATS	5.29	5.11	Hold	DCF & PER19x
05/22/17	Credit Suisse	SATS	5.29	4.65	Underperform
05/22/17	DIR	SATS	5.29	5	Hold	DCF
05/22/17	Kim Eng	SATS	5.29	4.9	Hold	PER17x
05/22/17	OCBC	SATS	5.29	5.12	Hold	DCF, Buy @ $4.7 or lower
05/22/17	phillip	SATS	5.29	5.08	Hold	DCF, PER23.2x FY18
05/22/17	UOB Kay Hian	SATS	5.29	5.05	Hold	DDM
06/06/17	UOB Kay Hian	SATS	5.22	5.05	Hold	Buy @ $4.75
06/16/17	OCBC	SATS	5.08	5.12	Hold	Buy @ $4.70 or lower
07/14/17	DIR	SATS	4.94	5	Hold	DCF
07/20/17	Credit Suisse	SATS	5.09	4.65	Underperform
07/24/17	Kim Eng	SATS	5.08	4.9	Hold	PER
07/24/17	DIR	SATS	5.08	5.05	Hold	DCF
07/24/17	phillip	SATS	5.08	5.08	Neutral	DCF, PER23.2x FY18
07/24/17	UOB Kay Hian	SATS	5.08	5.1	Hold	DDM
07/24/17	CIMB	SATS	5.08	5.11	Hold	DCF & PER19x
07/24/17	OCBC	SATS	5.08	5.05	Hold	DCF, Buy @ $4.7 or lower
07/24/17	Lim & Tan	SATS	5.08	5.09	Sell	Bloomberg consensus
08/02/17	DIR	SATS	4.85	5.05	Hold
08/02/17	UOB Kay Hian	SATS	4.85	5.4	Buy	DDM, PER23.5x FY18
08/22/17	Credit Suisse	SATS	4.83	4.6	Underperform
09/05/17	UOB Kay Hian	SATS	4.76	5.4	Buy	DDM, PER23.5x FY18
09/18/17	OCBC	SATS	4.74	5.05	Hold	Buy @ $4.70 or lower
09/25/17	DBS Vickers	SATS	4.65	5.02	Buy	DCF & PER21x FY18
09/25/17	CIMB	SATS	4.65	4.24	Reduce	PER18x CY19
09/26/17	DIR	SATS	4.57	5.19	Outperform	DCF
10/02/17	OCBC	SATS	4.61	5.05	Buy
10/04/17	UOB Kay Hian	SATS	4.66	5.4	Buy	PER23.5x FY18
11/01/17	DBS Vickers	SATS	4.7	5.02	Buy
11/02/17	UOB Kay Hian	SATS	4.75	5.4	Buy	PER23.5x FY18
11/10/17	UOB Kay Hian	SATS	4.71	6	Buy	DCF, PER24.6x FY18
11/10/17	OCBC	SATS	4.71	5.05	Buy
11/10/17	CIMB	SATS	4.71	4.81	Hold	PER20x CY18
11/10/17	phillip	SATS	4.71	5.24	Accumulate	DCF, PER23.2x FY18
11/13/17	Kim Eng	SATS	5.01	5.7	Buy	PER21x FY19/20
11/13/17	Credit Suisse	SATS	5.01	4.6	Neutral
12/04/17	UOB Kay Hian	SATS	5.24	6	Buy
12/20/17	CIMB	SATS	5.26	4.81	Hold
01/16/18	OCBC	SATS	5.78	5.5	Hold	Buy @ $5.05 or lower
02/14/18	Kim Eng	SATS	5.25	6.1	Buy	PER21x FY20
02/14/18	UOB Kay Hian	SATS	5.25	5.9	Buy	DCF, PER25.2x FY18
02/14/18	OCBC	SATS	5.25	5.5	Hold	Buy @ $5.05 or lower
02/14/18	CIMB	SATS	5.25	5.17	Hold	PER20x FY19
02/14/18	phillip	SATS	5.25	5.33	Neutral	DCF, PER23.3x FY18
02/14/18	DBS Vickers	SATS	5.25	5.67	Buy	DCF, PER22x FY19
03/09/18	UOB Kay Hian	SATS	5.03	5.9	Buy
04/13/18	UOB Kay Hian	SATS	5.18	5.8	Buy	PER25.3x FY19
04/19/18	CIMB	SATS	5.45	5.17	Hold
05/30/18	Lim & Tan	SATS	5.35	0	Hold
05/31/18	phillip	SATS	5.28	5.58	Accumulate	DCF
05/31/18	UOB Kay Hian	SATS	5.28	5.7	Buy	DCF, PER24.3x FY19
05/31/18	DBS Vickers	SATS	5.28	5.64	Buy
05/31/18	OCBC	SATS	5.28	5.5	Hold
06/11/18	UOB Kay Hian	SATS	5.13	5.7	Buy
06/14/18	OCBC	SATS	5.06	5.5	Buy
07/03/18	UOB Kay Hian	SATS	4.91	5.7	Buy
07/20/18	phillip	SATS	5.1	5.58	Accumulate	DCF, PER24.7x FY19
07/20/18	UOB Kay Hian	SATS	5.1	6.1	Buy	DCF, PER23x FY20
07/20/18	Kim Eng	SATS	5.1	5.9	Buy	PER21x FY20
07/20/18	CIMB	SATS	5.1	5.06	Hold	PER20x CY19
07/20/18	DBS Vickers	SATS	5.1	5.65	Buy	DCF & PER22x FY19
08/17/18	UOB Kay Hian	SATS	5.1	6.1	Buy
09/10/18	UOB Kay Hian	SATS	5.01	6.1	Buy
09/18/18	OCBC	SATS	4.93	5.39	Buy
11/08/18	UOB Kay Hian	SATS	4.99	5.6	Buy	EV/Invested Capital
11/09/18	phillip	SATS	5.11	5.47	Accumulate	DCF, PER24.3x FY19
11/09/18	OCBC	SATS	5.11	5.39	Hold
11/09/18	CIMB	SATS	5.11	5.06	Hold	PER20x CY19
11/12/18	DBS Vickers	SATS	4.88	5.6	Buy	DCF, PER22x FY20

Stock calls for 26 November 2018

Date	Analyst	Company	Last	Target	Call	Valuation
11/26/18	phillip	Geo Energy	0.205	0.245	Buy
11/26/18	phillip	Golden Energy	0.23	0.36	Buy
11/26/18	OCBC	SIA Engineering	2.51	2.64	Hold	DCF
11/26/18	CIMB	Venture	14.72	17.44	Add	PER12.3x FY20

Another bad news for bitcoin!

https://sg.finance.yahoo.com/news/us-military-darpa-program-hops-074953491.html

US DARPA is trying to develop another version of blockchain without monetary incentive.  This new blockchain will contradict the existing blockchain because crypto miners won't be interested in a non-monetary crypto mining.

Apple is cutting its iPhone XR prices in Asia.

https://www.cnbc.com/2018/11/23/iphone-xr-discount-japan-report.html

After the reported poor iPhone sales, Apple has decided to cut its XR prices in Asia to boost its sales.

We've reported previously that Apple couldn't continue to sell at high prices because of the elastic demand.

http://sg-stock.blogspot.com/2018/11/apple-has-cut-production-orders-by-13.html

Apple financial statement won't look good if the volume and price drop simultaneously.

The National Council of Churches of Singapore (NCCS) got it all wrong.

https://sg.news.yahoo.com/nccs-concerned-commercial-disney-theme-christmas-light-orchard-road-124236546.html

The commercialization of Christmas started with the introduction of Santas Claus.  Therefore, NCCS is barking up the wrong tree.  Just ask the kids how they perceive Christmas and they'll tell you Santas Claus and not Jesus.

Orchard road is a dying shopping street and it is trying to stay alive with the Christmas decors.  Without these decors, who will wanna visit orchard road?

NCCS, please stay out of commercial streets because the retailers are trying to make a living.  When these retailers are out of business, nobody will make any charitable donation.

Baltic dry index - 1008

Today, Wednesday, November 21 2018, the Baltic Dry Index climbed by 5 points, reaching 1008 points.

Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.

==================

Related stocks: Sembcorp Marine, Cosco & Pan Ocean

US rig count - 1079

The US drilling rig count is down 3 units to 1,079 rigs working for the shortened holiday week ended Nov. 21, according to Baker Hughes data. However, the count is up 156 units from the 923 rigs working this time a year ago.

Land-based drilling was down 6 units this week to 1,052 rigs working vs. last week. Offshore units gained 3 units to reach 25 rigs working, while those rigs drilling in inland waters were unchanged this week to 2 rigs working for the week.

US oil-directed rigs were down 3 units from last week to 885 units working, and up from the 747 rigs drilling for oil this week a year ago. Gas-directed rigs were unchanged at 194, and up from the 176 units drilling for gas a year ago.

Among the major oil and gas-producing states, Texas, at 532 rigs, and North Dakota, at 52 rigs, were down 3 units each. Oklahoma and Wyoming, at 144 and 28, respectively, were down 2 units each. Alaska and Utah each lost 1 unit to reach respective counts of 5 and 4.

New Mexico was up 3 units to reach 108 rigs working and Louisiana, at 69, was up 4 units.

All other states were unchanged from last week.

Canada gained 7 rigs for the week. With 204 rigs running, the count is less than the 215 units drilling this week a year ago. Oil-directed rigs rose 6 units bringing the count to 124 rigs for the week. Rigs targeting gas in Canada gained 1 unit to 80 rigs working.

=======================

Related stocks: Keppel Corp, Sembcorp Marine & Cosco

Sasseur - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
06/07/18	Kim Eng	Sasseur	0.77	0.9	Buy
06/20/18	Citi Research	Sasseur	0.76	0.92	Buy
08/07/18	Kim Eng	Sasseur	0.75	0.9	Buy	DDM
09/18/18	DBS Vickers	Sasseur	0.71	0.91	Buy	DCF
11/13/18	Kim Eng	Sasseur	0.68	0.9	Buy
11/14/18	DBS Vickers	Sasseur	0.68	0.91	Buy	DCF

Sarine - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
02/28/17	CIMB	Sarine	1.9	1.95	Hold
05/15/17	CIMB	Sarine	1.915	1.96	Hold	PER15.3x CY18
02/06/18	CIMB	Sarine	1.05	1.56	Add	PER17.2x CY19
02/27/18	CIMB	Sarine	1.18	1.53	Add	PER17.2x CY19
05/15/18	CIMB	Sarine	1.03	1.53	Add	PER17.2x CY19

Sanli Env - Stock calls

Date	Analyst	Company	Last	Target	Call	Valuation
11/14/17	SAC Advisors	Sanli Env	0.3	0.36	Buy
01/11/18	SAC Advisors	Sanli Env	0.295	0.36	Buy	PER15.9x FY18
05/25/18	SAC Advisors	Sanli Env	0.25	0.36	Buy

Stock calls for 23 November 2018

Date	Analyst	Company	Last	Target	Call	Valuation
11/23/18	CIMB	Jumbo	0.405	0.54	Add	PER21x FY20
11/23/18	UOB Kay Hian	Jumbo	0.405	0.42	Hold	PER20x FY19, Buy @ $0.38
11/23/18	CIMB	Q & M	0.505	0.47	Reduce	PER20x FY20

Crypto mining bankruptcy is rising rapidly now.

https://bitcoinexchangeguide.com/giga-watt-crypto-mining-company-files-for-bankruptcy-with-millions-in-bitcoin-owed-to-creditors/

Crypto mining bankruptcies are happening in the USA and China now!

https://www.thestar.com.my/tech/tech-news/2018/11/22/as-bitcoin-prices-fall-mining-cryptocurrencies-is-no-longer-profitable-for-many/

https://www.independent.co.uk/life-style/gadgets-and-tech/news/bitcoin-price-crash-cryptocurrency-mining-bankrupt-china-bitmain-giga-watt-a8646821.html

When a product is conceived and developed on flawed structural design and bad economics, it is doomed to fail in a matter of time.

http://sg-stock.blogspot.com/2018/11/a-financial-analysis-on-initial-coin.html

Fund managers don't invest in ICOs and Cryptocurrencies because they understand the investment risks as explained in our financial analysis posting for ICO & Crypto.

No more trade talk between Trump and Xi.

https://sg.finance.yahoo.com/news/u-asks-allies-avoid-huaweis-equipment-wsj-035619742--finance.html

Look like the trade tralk between Trump and Xi won't end well because the US is embarking on a smearing campaign now.

The US is also engaging in cybersecurity snooping especially through the US operating system (Windows).  It is also eavesdropping on other leaders through network tapping.

China should just kick Microsoft out of China because of cybersecurity risks too.

I've stopped using microsoft products after microsoft acknowledged publicly that it had a backdoor in its system for the US NSA.

A financial analysis on Initial Coin Offering (ICO) and Cryptocurrency.

Before we embark on the ICO and Crypto analyses, we will need to understand the proper concepts of value and money because ICO and Crypto developers are trying to portray their digital tokens as cryptocurrencies that are tantamount to monies.

What is a value?

Value in financial term is just a monetary worth but value by itself has 2 inherent meanings: Extrinsic and Intrinsic values.

Basically, an extrinsic value is a perceived value of an item and it differs from person to person because a perceived value is something very subjective and is affected by our want(s).  An extrinsic value is usually highly volatile because it is affected by an elastic demand.  Therefore, the extrinsic value (price) is affected by demand and supply.

For example, you may perceive $10 of an item as cheap but I may value it as expensive because our perceived values and wants are different.

Conversely, an intrinsic value is an essential value, which is vital for our survival and is commonly defined as a need.  An intrinsic value has low volatility because it has an inelastic demand.  Therefore, intrinsic value is not affected by the demand and supply.

For example, water has an intrinsic value to us because we need water for our survival and we will consume water regardless of the water price.

Please let me digress a bit to explain the demand-supply concept because I feel that it is important to get the concept right.

Many people have the wrong notion of the demand-supply concept.  Demand and supply concept is premised under a perfect world condition.  That was what I learnt in my economics class aeon ago.  A perfect world is defined as an environment with no alternatives and is ceteris paribus.  However, we live in an imperfect world.  For example, I can travel to Kuala Lumpur from Singapore in a budget airline like Airasia, which has some direct competitors (direct alternatives) like Scoot, Jetstar, etc., and the indirect alternatives will be to travel in a train, car or coach.  Thus, Airasia cannot keep its fare prices high by reducing its supply.  Subsequently, I will use my own bar diagram to illustrate the flawed demand-supply concept of bitcoin instead of the standard demand-supply curves graph.  Likewise, bitcoin has many competing alternatives.

-->

Currently, about 17m of bitcoins are mined insofar but the price is hovering at US$4,500m on 20 November 2018.  Cryptocurrency was developed based on a flawed demand-supply concept because the developer(s) didn’t have a proper understanding of economics.  Please see the bar diagram below.

If the demand-supply concept conceived by the crypto developer(s) works in reality, bitcoin price will be approaching a record high level as there is only about 4m of bitcoins (21m in total) left to mine but the bitcoin price is at US$4,500 (Nov 2018) instead of its peak of US$20,000 (Dec 2017).  The bar diagram has revealed that bitcoin is developed on a flawed demand-supply concept because bitcoin price does not follow the demand-supply principles.

-->

Let us get back to the analysis again.

Generally speaking, a product with an intrinsic value will have an existing or future extrinsic value but a product with an extrinsic value may not have an intrinsic value.

For example, the air we breathe in has an intrinsic value but no existing extrinsic value.  However, when there is any serious air pollution, we will put an extrinsic value on the air by buying an air purifier within our monetary means because we need clean air to stay healthy.

Water has both extrinsic and intrinsic values because we only drink water for our survival.  There is no added benefit for drinking more water because we will get water poisoning when we drink excessively.

A luxury item has an extrinsic value but no intrinsic value because it is just a want and we can do without it since it does not affect our survival.

Next, we will need to understand the functions of money in order to analyse any cryptocurrency.  Money is an economic concept and serves 3 primary functions.

3 Functions:

1.     A medium of exchange

2.     A store of value

3.     A unit of account

As we can see, money is not created by technology because the aforesaid functions need not be fulfilled by technology.  Let us look at the functions in more details.

A medium of exchange is an intermediary instrument to facilitate transactions.  Therefore, it has to be something that is easily transferrable and money serves this role better than barter trade.  Cryptocurrency also fulfills this function well because of the ease of transfer.

A store of value is an asset that has a relatively stable value over time so that it can be saved and used in the future.  In a nutshell, it is an asset with an intrinsic value and has a low volatility for change.  Money has an intrinsic value not because it is backed by a country’s reserves but rather its legal tender status that is passed in the parliament.  This legal tender act allows the government to impose upon users to use the stipulated money as a medium of exchange and the state money cannot be rejected.  In short, we need to use the state money for any transaction in the country.  Thus, this legal tender status is not affected by the financial reserves of a country and is recognized to have a low volatility for change unless the government declares it as void.

For example, cowry shells were recognized and used as monies 3,000 years ago.  Why? This was because cowry shell was declared as legal tender in the past and not because it was backed by the financial reserves of the involved countries.  However, cryptocurrency does not fulfill this function because any user can reject it as a medium of exchange since it is not protected by the legal tender act and it has high price volatility.  Consequently, cryptocurrency does not have an intrinsic value, that is, a real need to use it.

A unit of account is a monetary unit of measure that is divisible.  For example, a 100gram gold ingot is non-divisible for $2.75.  Conversely, money is easily divisible.  Cryptocurrency also serves this function well because it is in a digital form, which is easily divisible.

Since money has to serve the aforesaid 3 functions in order to be widely accepted, cryptocurrency cannot be classified as money as it does not fulfill the basic requirements.  Therefore, the proponents who try to portray cryptocurrency as money is doomed to fail.  Furthermore, bitcoin is also not suitable to be a payment system because of its structural design flaws and volatile processing fees.

An ICO is an issuance of specific digital tokens based on another cryptocurrency.  In other words, the ICO is piggybacking on a specific cryptocurrency, which is based on a public blockchain.  This ICO infrastructure exposes ICO investors to higher risks than necessary but the issuer will not discuss these risks with the investors.

A responsible and ethical organization will not use a public blockchain to process and store sensitive data because of confidential and privacy issues.  When a company uses a public (decentralized) blockchain, it has to allow external nodes to access its data using public keys.  This kind of decentralization will renegade the company’s confidential and privacy terms.  Let me ask you this question: How many people are comfortable to show their bank statements to strangers even though the strangers cannot alter their bank account information?  I believe you get the whiff of my drift now.  Therefore, the reputable financial institutions, medical facilities, etc., will not use public blockchains for their data processing and storage.  I will not discuss the security of blockchain because it is irrelevant in our financial analysis.  For your information, blockchain security is hackable by using a method known as 51% attack (plus double spending technique).

Next, an ICO has a higher risk because it is riding on another dicey cryptocurrency, which will derive a lower success rate in the end.  This lower success rate can be fully explained by the binomial probability theorem.  For example, if an ICO has a probability of 80% success rate but it is piggybacking on another crypto, which also has a probability of 80% success rate, the ensuing outcome for the ICO success rate will decrease to 64% (0.8 x 0.8 = 0.64).  A mathematics theorem is always a working theorem unlike a business or philosophy theorem and I will prove the working binomial theorem with some applicative examples.

A bi-nomial theorem involves 2 coefficients (Bi) which is what the name is known for.  A binomial theorem is often used in the calculation of probability, financial derivative, factorization, etc.  For example, (x-2) is a binomial expression because it has 2 coefficients that consist of (+1)x and (–2).

The simple binomial probability (P) methodology will be:

P_AB = P(A) * P(B)

The other common binomial probability (P) methodology will be:

P_{AB =} P(A₁B₁) + P(A₂B₂) + P(A₃B₃) +…………+ P(A_nB_n)

--> The binomial theorem can be arranged into a pascal’s triangle (binomial pyramid) to solve a binomial factorization.  The pascal’s triangle is shown below as:

As an example, we will apply the above pascal’s triangle to solve the factorization of (X-2)³.

Using normal factorization method:

(X-2)³ = (X-2) (X-2) (X-2)

            = (X²-2X-2X+4) (X-2)

            = (X²-4X+4) (X-2)

            = X³-4X²+4X-2X²+8X-8

            = X³-6X²+12X-8

Using binomial factorization method:

Since (X-2)³ has an exponent of 3, we will use (1 3 3 1) in the pascal’s triangle as the X coefficients to solve the factorization.  The first coefficient will have decreasing exponents while the 2^nd coefficient will have increasing exponents in the working expression.

(X-2)³ = (1)X³ * (-2)⁰ + (3)X² * (-2)¹ + (3)X¹ * (-2)² + (1)X⁰ * (-2)³

            = (X³ * 1) + (3X² * -2) + (3X * 4) + (1 * -8)

            = X³ + (-6X²) + 12X + (-8)

            = X³-6 X²+12X-8

The binomial theorem is able to solve the binomial factorization with the same answer as the normal factorization method.  Therefore, binomial is a valid theorem.

2017 was a superb year for the ICO industry because many billions were raised.  Since most of the ICOs are using ERC20 infrastructure and Ethereum cryptocurrency, this phenomenon makes Ethereum highly vulnerable and volatile.  As the ICO issuers take between 1 to 2 years to fully develop their ICO eco-systems,  ICO investors are already suffering from the crypto carnage now because they exchanged their Ethereums at higher prices in 2017 for the ICOs.  Furthermore, there will be a rush to cash out of their ICOs in 2019 and this will depress the Ethereum prices.

--> In conclusion, the ICO issuers expose ICO investors to higher risk by lowering the success rate and offer no additional benefit to the investors.  Thus, I will avoid ICO and Crypto investments because more than 80% of them are either not feasible or scams.