Building a 100K portfolio from HKSE dividend stocks

I have been looking at investing in dividend stocks listed in HKSE as a form of increasing my geographical diversification. As US corporate bond price hit a record high and SGX REITs run up in the last one month, I started to spend more time researching HKSE dividend counters for alternative passive income. HKSE market capitalization greatly exceeds that of SG due to many China H shares listing and this increases my pool of opportunities to buy undervalued stocks. Currently, China economy is the least impacted by covid due to good control measurement by its government. Its domestic economy should be large enough to help Chinese companies to cushion the blow of this global pandemic.

Since US govt started to blacklist China companies and delist China ADR stocks on NYSE, many Chinese stocks with parallel listing on HKSE have plunged significantly. I took this opportunity to build my HKSE dividend portfolio with 100K allocated buying some local HK and China H Shares. Due to the sharp run up in share price during January, I manage to invest about 94.5K which will produce about $6.2 K dividend annually.

 

Financial summary of counters invested:

1) LINK is one of the largest REIT in the world with a market cap close to 20 billion USD. Its current price is still about 20% below pre-covid high. It has one of the best balance sheet among all the REITs that it is unlikely to cut dividend or raise cash via right issues.

2) Fortune REIT has low gearing of about 20% and unlikely to raise cash via right issues.. Its current price is still about 24% below pre-covid high.

 

 3) CNOOC is victim of US govt blacklist. However, its business is 100% based in China and won't be impacted by US delisting. Its current price is about 41% below pre-covid high.

 

4) China Mobile is one of largest wireless carrier in term of subscribers.It has one of best balance sheet especially when you compare against Singtel. Its current price is still about 33% below pre-covid high. China Mobile is also a victim of US govt blacklist. However, its business is 100% based in China and won't be impacted by US delisting.

 

5) Sinopec Engineering has one of the highest yield among H shares with excellent cash flow and little debt. Its current price is still about 26.5% below pre-covid high. Its parent company Sinopec is one of the largest listed company in China.

 

6) ICBC .. All 3 Chinese banks below have low P/B , P/E and sustainable dividend yield of > 5%.

7) CCB

8) BOC

9) Power Assets . Its current price is still about 30% below pre-covid high.

Dec2020-Monthly and FY Finance/Portfolio dividend/interest income update

Investment Portfolio valuation on 31st Dec: $1.023 million (gain 0.8%, +6.36% inclusive of dividend)

Dec 2020 Monthly Investment Portfolio Dividend/Interest received: $4.78K

FY2020  Investment Portfolio Dividend/Interest collected in 2020: $56K

FY2020 Total Realized and Unrealized gain/loss:-$43K (-2.88%, +1% inclusive of dividend)

FY2020  Total Realized gain/loss: -$52K

My dividend/interest received in 2020 help to cover my portfolio realized loss. Overall, I am sort of break even based on total Realized and Unrealized gain/loss. As an old economy investor , my portfolio consist mainly of dividend seeking Property(reit), O&G, and Finance(Euro) counters which did not fare too well in 2020. In the last few month, I have been doing a lot of portfolio rebalancing by selling almost all my high risk O&G MLP and low grade Reits counters which resulted in huge realized loss of 52k. In replacement, I have bought mostly large cap index stock from LSE and HKSE and some ETF from SGX which help to narrow losses in 2020. Overall transactions have resulted in >1/2 million of investment sold and bought which was quite a nerve racking experience. The entire 2020 pandemic crisis actually taught me a lesson to buy only quality company and not to chase after high yield.  Hopefully, the new portfolio will be more resilient in 2021 even though I know that I still have some risky counters to trim. 

One main positive in a dismal year of 2020, my liquid networth (excl properties/CPF) actually hit an all time high of >1.7 millions due to mainly salary injection and low expense. I am certainly grateful to have a job when my investment portfolio did not do well. I am holding a high amount of cash due to the uncertainty of post covid economy disaster. I will prudently add some positions  with my cash pile to build up my  annual dividend yield to about $65K in 2021.

Due to decreased and suspended dividend payout, my 2020 total dividend/interest received is 10% lower than 2019.

Liquid Networth distribution: 

 

Dec 2020 dividend/interest income update:

• Dividends received in Dec2020 from Foreign Investment (Stocks): USD $1211
• Interest received in Dec2020 from Foreign Investment (bonds): USD $1622
• Interest received in Dec2020 from banks interest/FD/others in US: USD $360
• Realized gain/loss : USD: 155
• Dividends received in Dec2020 from SGX:SGD$952
• Interest received in Dec2020 from banks interest/FD/others in Spore: SGD $208
• SGX Realized gain/loss in Dec2020: -SGD 17,348
• Total dividend and interest from my investment portfolio + bank/money market account + trading gain/loss generated in Dec2020: -SGD $11,666

Detailed Dividend/Interest received from investment portfolio in Dec2020 :

Monthly Dividend/Interest earned Y-to-Y changes from 2017 to 2020:

Nov2020- Monthly Finance and portfolio dividend/interest update

In the month of Nov, my monthly dividend/interest received is around 2.4k. This is one of the lowest monthly passive income received in the last 4 years. This is pretty much due to re-balancing of my portfolio in 2020 to cut most of my riskier counters. In replacement, I have bought mostly large cap index stock from LSE and HKSE. I believe these purchase will bear fruit next year as they are showing strong rebound in stock price and provide a more resilient dividend. In comparison to last month, my portfolio rebound by more than 60k and reduce my YTD unrealized loss to 2.9% without factoring in my dividend. With dividend, my YTD portfolio will still be positive.

My YTD dividend/interest received from my investment is about $51.7K. Currently , I am still projecting a full year of 56k dividend with one more month left in 2020. Throughout 2020, I sold off some of my riskier investment and incur a realized loss of 35k .  I should be able to maintain positive return for year 2020 with probably one more big write off (Lippo Mall reit) before end of the year. The entire 2020 pandemic crisis actually taught me a lesson to buy only quality company and not to chase after high yield.  

I have another bond worth 5K USD that was called this month. It is creating a headache for me as I could not find any bond to reinvest. Due to the record high bond market, bond yield rate like our bank deposit interest has been dismally low. The return from bond investment is so low that it is out weighting the risk.

With the extra cash I have received from callable bonds in the last 2 months. I continue to add some dividend stocks like Fortune Reit (HKSE) and GSK (LSE) as they have been providing attractive and safe yield.  I also bought around SGD10k  of CICT and SGD10K of UtdHampshire reit. In total, I have put in around $256k for 2020 investment while selling about $240k..I hope to build a more robust portfolio for 2021 and beyond to raise my dividend.interest income to go beyond 60k per annual.

Dividends received in Nov2020 from Foreign Investment (Stocks): USD $1113
Interest received in Nov2020 from Foreign Investment (bonds): USD $427
Interest received in Nov2020 from banks interest/FD/others in US: USD $362
Realized gain/loss : USD: 0
Dividends received in Nov2020 from SGX:SGD$89
Interest received in Nov2020 from banks interest/FD/others in Spore: SGD $212
SGX Realized gain/loss: -SGD 1539
Total dividend and interest from my investment portfolio + bank/money market account + trading gain/loss generated in Nov2020 SGD$1333
YTD Passive income earned from investment only: SGD $51,702
YTD Realized Gain/Loss : -SGD35,219

2020 Transaction Summary:

Monthly Dividend/Interest earned Y-to-Y changes from 2017 to 2020:

 Detailed Dividend/Interest received from investment portfolio in Nov2020 :

Liquid Networth distribution: