AK might nibble at King Wan Corp. Ltd.

The past few years were characterised by very low interest rates as money supply was ramped up by the U.S. Federal Reserves. Many businesses and individuals probably benefited from this. However, interest rates cannot stay so low for too long.

In preparation for an environment of higher interest rates, I have mentioned a few times before that I am on the lookout for businesses which are net cash or have very low gearing. I would also like to have them pay regular and meaningful dividends. I said the same thing too during an interview I gave recently.

To this end, together with a handful of companies, I have also been keeping an eye on King Wan which is a company introduced to me by Solace, a guest blogger here in ASSI, some time ago. Solace also wrote a very good piece on King Wan then and I have appended the link at the end of this blog.

Of course, it is not enough that a business is in a net cash position or has low gearing. That only represents balance sheet strength. We should also want the company to have earnings visibility.

King Wan is in a net cash position and it also has an order book that would provide earnings visibility until 2018. Just like how I like Hock Lian Seng's order book which provides earnings visibility until 2020, I like the health of King Wan's order book too.

As I invest primarily for income, I am also attracted to King Wan because they pay dividends regularly. A DPS of about 1.5c per year seems undemanding given their more normalised EPS of about 2c.

What do I mean by normalised EPS?

Well, I know that King Wan made quite a bit of money from savvy investments which gave them extraordinary gains at times but it is the health of their core businesses' which is more important in helping to determine sustainability of their dividend payouts.

So, at a price of 30c a share, for example, a 1.5c DPS, representing a pay out ratio of 75%, gives us a dividend yield of 5%. Doesn't sound too bad, right? Then, why did I not buy some of its stock?

Well, as I shared with Solace in a chat before, I have a certain amount of money to be allocated and, after some thought, I decided to put King Wan in the same category as Hock Lian Seng which comparatively gave a higher dividend yield with a lower payout ratio of about 40%.

Am I going to invest in King Wan now, I asked myself, as Hock Lian Seng's stock price has shot through the roof? Why not a nibble?

OK, if Mr. Market should give me a better offer, I might.

Related post:
Tea with Solace: King Wan Corp. Ltd.

The lowest income tax payable in many years (YA 2015).

I just did my income tax filing for Year of Assessment 2015. 

Yes, I am always quite early, preferring to get it out of the way ASAP.

My estimated income tax payable has reached a new low.

I have shared some ways which could help us pay less income tax before and I have included the links at the end of this blog.

This year, the government, to celebrate SG50, is allowing all qualifying donations a tax deduction of 300% of the donation amounts in 2015. 

This is up from 250% in recent years.





As we journey towards financial freedom, let us not forget the less fortunate. 

Do good and pay less income tax? Why not? 

I am sure all of us can find a charitable cause that we support in 2015.

Reference:
What type of donation is tax deductible?





So, how much is my estimated income tax payable for YA 2015?

Estimated income tax payable is $772.14.

Related posts:
1. Ways to reduce income tax. (YA 2013)
2. Double your income but not your tax. (YA 2014)
3. One of the most noble things we can do.

Green is not just the color of money.

People remember Mr. Lee Kuan Yew for saying many things before but I think few would remember him making a statement regarding global warming and whether governments around the world were doing enough to tackle the problem.

He will be sad if the polar bears vanish from the North Pole, but sadder still should the ice cap melt at the South Pole. These dire consequences of global warming featured prominently in Minister Mentor Lee Kuan Yew's inaugural Singapore Maritime Lecture at the Fullerton Hotel yesterday. 

"When the polar bear disappears from the Arctic, I will be sad when I see them at the zoo. But I will be sadder when the Antarctic ice cap melts because the water level will rise so much," he said. The calamity confronting humanity has no easy solutions nor are governments doing enough to tackle this problem, said Mr Lee. 

"I am not optimistic about the will of governments to attack this cause," he told some 300 top maritime executives, in response to a question about how Singapore can contribute to climate change. "I do not see any leaders saying let us eat less, eat more vegetables, eat less meat." 

Source: 
http://www.wildsingapore.com/news/20070910/070926-1.htm

Close friends would know that I am a bit of an environmentalist. I carefully wash and clean what could be recycled and deposit these in recycling bins regularly. I also try to grow some plants at home. I am careful to conserve water and electricity while still having a comfortable life.

I also try to reuse product packaging where possible and friends are constantly amazed by how I actually find a purpose for stuff that many would have simply thrown away. Some readers would remember how I put a Bengawan Solo mooncake tin to good use, for example.

So, I suppose it is not surprising that what Mr. Lee Kuan Yew said so many years ago stayed at the back of my mind. Then again, why the sudden flashback?

Well, I have been eating less meat recently. This is partly because I think I do not need much meat in my diet as I grow older and partly because I think they make me fat. The fact that not having meat helps the environment is a plus.

Do you know what else is a plus? The cost savings.

Here are some photos of my meals this week:

Price: $2.50

Price: $2.30

Price: $2.60

For dinner this evening, I decided to boil some broccoli I bought from the supermarket in an Ikan Bilis soup stock.
Price: $0.87. Ok, add water, heating and some Ikan Bilis.
Maybe $1.20?

Want to try doing something meaningful beyond your weekly routine? If you are not a vegetarian, try cutting back on meat this week.

I am not sure if you would like it but I think you would see the many benefits of doing so. Of course, you would also be doing your bit for the environment although you might not know it.

Have a good week ahead!

Related posts:
1. AK71 on climate change.
2. AK71 on more frequent storms.

If AK can grow money trees, so can you!

Not too long ago, I revealed that I bought a money tree and a few other plants for my planter at home. I have spent some time re-potting them and I want to show them off:

The money tree is the tallest plant in the pot.

Re-potting the cacti was more daunting a task.

I hope I didn't damage their roots or something in the process. It would be totally inauspicious if the money tree should die on me.

What else do I do from time to time on weekends other than growing a money tree?

Well, I enjoy picking fruits from another money tree which I have been growing for many years. 

Another money tree? It must be quite big to be bearing fruits, you might think.

Surprisingly, I don't need a pot or soil for this money tree. I just need a calculator, a pen and some paper. Got you!

Yes, it involves real money this time.

I am quite happy to spend some quality time with my money tree and my "money tree".

Like what you see? You can do it too. Believe it.

-------
Update (3 January 2016)

How is my money tree doing?

Not too bad. :)

Related posts:
1. Grow some plants that bring wealth?
2. Create Dividend Machines. (Interview with AK.)