“I Sell Fried Chicken”

My previous post about my investor friend was super well received. So much so that I’m reluctant to even link it here anymore. I just dunno if he’d appreciate the sudden publicity.

Anyway, I said I’d share about another highly successful individual that I know personally.

Incidentally, I recently saw a Bloomberg report about him:


And now I’m kicking myself in the butt because I know this guy way way WAY before he started DoubleDragons Properties, and he even shared with me his vision for doing so.

Yup, I missed a 2,500% return, despite having good information from the founder himself.

Dunno why, never considered to investigate deeper.

I first met Edgar Sia several years ago. His good friend happened to be a major investor in the healthcare company that I worked in, and he came over for holidays with him and we had dinners together.

Edgar is as humble a billionaire as you can imagine. Yes, it’s official. He’s the youngest billionaire in Philippines, coming in at number 17 in the Forbes list.


When I first met him, I didn’t know what he did, and DoubleDragons didn’t exist yet. But he was already extremely wealthy from selling his Mang Inasal chicken chain. (I later saw his name in a Forbes Top 50 richest list for Philippines)

Yet at that time, when I asked him: “So Edgar, what do you do for a living?”

His reply?

“I sell fried chicken”

And then he went on to explain the SCIENCE behind selling fried chicken.

“Chicken is the cheapest meat per unit kg”

“Best time to kill the chicken for maximum profits in terms of meat vs feed spent, is when they’re about 2 months old”

And a whole load of other stuff such as the maximum time from killing the chicken to processing the meat so that freshness is maintained, how a day old chick looks like etc.

It was only much later, then I realized that when he said he sells fried chicken, he meant that he sells it through a chain of 460 restaurants that employs 15,000 people.


The last time I saw Edgar was a couple of years ago, just before he started DoubleDragons Properties. At that time, he mentioned to me that he saw an opening in the mid-tier cities in Philippines. He said that the major cities were over crowded with malls, and the land is very expensive.

The mid-tier cities though, have an opening as many developers have not caught on yet. On top of that, there’s massive rising spending power in these cities. The populace there is getting richer, and he foresaw that their spending needs were not met adequately. To top it all off, transportation links were not that great between the mid tier cities, and the country is dispersed through many land masses. People in the mid tier cities would likely keep their spending power within the locality.

Since then, he hasn’t been to SG anymore, probably busy with DoubleDragons. He’s been highly successful obviously, and I’m really kicking myself for not at least investigating this. Hell, I’ve the news before any other retail investor did, and I know the founder personally and we talked about this, albeit casually.

In my conversations with Edgar, I can tell he thinks very deeply about many things. Things that people may find trivial. Yet, he goes down to the minute detail. I mean, would you think there’re so many things to think about when talking about selling fried chicken?!

Anyway, congrats to Edgar. Knowing his personality (humble and easy going), plus his deep intelligence, he’ll probably be one of those folks that would be successful at anything.

Now I’m hoping he’s done with DoubleDragons so that he’d move on to the next venture. And for gods’ sake, TTI, please do the DD if he lets you know this time.

BTW, if you’re wondering why “DoubleDragons”, it’s cos he and his co-founder were both born in the year of the dragon, 12 years apart. (or maybe 24. I can’t rem exactly)


On a very different note, I was recently chatting with a reader via email about his work and financial situation. (Yes, I’ve permission to talk about it, but not revealing private details, of course)

It’s been illuminating to me because now I can fully appreciate why many retail investors look to investing their portfolio as a means to attain “financial freedom” and quit their jobs. It’s refreshing to get a different perspective once in a while.

Steve Jobs’ famous speech is the one that’s often quoted to tell us to just do whatever we like, and if we keep at it, we’ll become very good at it and be successful blah blah blah.

It’s a great speech and all that, probably gonna last through the ages as an inspiration to many many many people.

Yet, it’s probably too simplistic to think of it just like that.

The truth is, many people will get stuck in jobs they don’t like, are not exceptionally good at, and they’d be stuck in it…….. pretty much for the bulk of their adult life.

Even Steve Jobs himself bumped around for a long while, and it was perhaps fortuitous that he started Apple. He himself didn’t know what to do with his life, and spent some time in India pursing Yoga to “find himself”

Hard truths. It takes a lot of luck to do something you like, are really good at, and yet get paid handsomely for it. Most people, I suspect, just settle into a zone where they’re OK with their jobs, don’t particularly love it or hate it, but it pays the bills. It’s a necessity.

So that’s where the bulk of my conversation with the reader went. And I’m sorry that I can’t provide better advice. But these sorta stuff are not really my forte. There are many other blogs that will dissect and talk about how you can use dividends to get financial freedom etc.

I have never even went for a job interview before. Or wrote up a CV before.

But I can empathize with a difficult working environment. Yes, I do get a lot of that. It sucks. I dunno what I’d do if I’m in his situation. I won’t try to act like a saintly hero and say just quit and do something you like as per the video above.

That’s not realistic. For eg. I like to play soccer with some mates. But what, can I go be a professional and play in the EPL anytime soon? It just doesn’t work out most of the time. (I’d have you know I’m not too bad either ok… LOL)

Having considered the financial restrictions of the above said reader, and the tough working environment, I think the only viable option, is to……. take an action that ironically makes his situation even harder temporarily.

Go upgrade and learn something that’s useful and valued by society. Investing in yourself is usually the best route to take in such circumstances. It can be something different, but preferably related to what you already know. It just makes the learning curve less steep.

I’m glad to say that the said reader is probably going to take that advice.

In the above conversation, I’ve also been asked about my personal financial situation.

Well, honestly, I don’t have any massive expensive wants. My only large expenditure, is travelling. I love to travel with family (not alone). I see that as a transaction where I’m swapping money and time for experiences and memories. Well worth it IMO.

And I value experiences and memories A LOT. Like this:

I Did Something Fun As A Kid… And Now It’s Worth 6 Digits!!!

Afterall, what’s the point of a big fat bank account on your death bed? Nobody ever talks about what their net worth is when they’re dying. And I do know many very wealthy folks.

Neither do I want to leave a fortune for my kids. I mean, my parents didn’t give me anything other than an education, so why should my kids have it better? I’d train them to be the best they can be, and that’s all that’s needed. (Plus I have a personal hypothesis that the richer you are, the worse off your kids tend to be in terms of achieving their maximum potential)

Hey, don’t just take all this from me, I never died before.

Take it from this guy, a fellow medical colleague, Dr Richard Teo, who has since passed away. This speech is given to a bunch of young dental students, and it’s as heartfelt as it can be.

I mean, he knows it’s stage 4 cancer when he gave this speech. He could’ve been lying in bed moaning. Or trying frantically to spend his wealth in his last days. But here he is, talking and sharing with younger colleagues-to-be in the fraternity:


It’s as heartfelt as it can be right?

On a personal note, I realized very few of my colleagues actually really retire. I’m sure they’ve reached “financial independence” long long long ago.

I think even I myself can be considered “financially independent”. It might be a stretch, and I might have to downgrade my housing a bit, forgo the beamer and take public transport instead etc, but my passive income would likely cover the entire household expenses if I wish to. (But I have 2 young kids so maybe I just haven’t realized how much it’d hit me when they get older… Experienced parents may correct me here)

The only colleagues I know who are really retired, are retired because of health reasons. Even the old foggy guy that works downstairs from me is still around. He must be what, in his 70s? OK, he comes in only 3 weekday mornings a week, but that’s not considered truly retired right.

But of course. Why would I retire when I can do this?


Yes. That’s bone. Don’t ask me where that is, it’s deliberately cropped out to not reveal where exactly. But there are hints :)

It’s really quite fun actually. It takes a certain character to take a knife to someone, and inflict a wound (even if it’s for the better, it’s still a wound), and yet at the end of it, stand back, look at it and feel proud at what you’ve done.

Weird, now that I put it this way, isn’t it?

Plus I get a lot of presents. Like this one that just came in today:

454) presents.jpg

Like a hell lot of them. Mostly food. Toys for my kids. Books even. I never ever had to buy any CNY goodies myself. The weirdest one I’ve received thus far, is a set of underwear.

Plus I get to spend most nights looking at various company financials in my other capacity as TTI. It’s like I’m Peter Parker in the day and Spiderman at night.

It’s as fun as it gets. Frustrating and tiring at times too, for sure. But as they say, you can’t have the rainbow without the rain.

And even if you can, you’d get bored of rainbows all the time anyway.

I try to remember all this whenever I have a shitty day. Most people will have shitty days, no matter what you do.

As the earnings reporting season is underway, I’m really excited about next week. That’s when I’m expecting some major results that’d make a significant difference to my portfolio.

Thus far, I’ve looked at the results of Asia Enterprises Holdings, LTC Corporation, Boustead Singapore and Boustead Projects, King Wan Corporation and am in the midst of digesting Metro Holdings’.

There hasn’t been much fireworks thus far. King Wan wrote off $2mil from its Dalian shithole again, but I was kinda expecting some write off there. If they maintain dividends though, by virtue of the low share price currently, the yield suddenly looks rather impressive. If they maintain dividends.

I’ve already written about LTC. Nothing unusual. Cash building up, they’ll probably burn some by expanding the USP operations. A reader sent me a link to an article that says LTC intends to invest 200mil MYR in USP. So I guess that’s where the FCF will be utilized.

AEH results, also nothing out of the blue. Still suffering. I’m not vested but I’ll continue to follow up. Surprisingly, they didn’t get as much of a boost from rising steel prices in Q4 as LTC did.

Boustead delivered a steady set of results. Better than I expected in fact. I think it’d be best to leave it to FF Wong to do his job. The depressed O&G markets have been quoted as the main reason for Boustead’s lagging share price. But it contributed like $5mil revenue (I think. Writing this off the top of my head) so I’m not so sure how much of a lag would this division be going forward. Even if it goes to 0, it’s still a small proportion of total revenues.

I’ll have to spend some time on Boustead Projects soon. The industry is still in a tough spot, but I can see real competitive advantages for BP.

Alright, that’s it for this post.

As always, happy hunting!

LTC Corporation – FY17Q2 Results. Let’s Analyze…

LTC Corporation just released it’s FY17Q2 results today.

Yes, yes, I know I’ve finished analyzing and am writing an update report on LTC… on Valentine’s Day. But I’m married with 2 kids so V-Day is just another day to me, without the fancy dinners and flowers. Just a quick dinner at home, exchange presents (I only paid for the present, didn’t even have to actually buy it…), and it’s back to work for me. I hate the crowds anyway.

So LTC becomes my Valentine for tonight.

In any case, I am really excited to analyze the earnings release. I’m excited to share some of my thoughts too, cos I know there are some readers here who have done quite a bit of homework on LTC too. (From the emails I received previously)

4) ltc-logo 13052016

Take a look, and please let me know anything that I may have missed out.

This is a continuation of my previous analysis of Q1 results:

My Current Thoughts On LTC Corporation – FY17Q1 Results

Just to give more background, the post before that comparing LTC vs Asia Enterprises Holdings is also rather relevant:

LTC Corporation & Asia Enterprises Holdings – What Are Investors Missing?

And if that’s not enough, these are older but all related:

Info That I Have Gleaned From LTC Corporation’s AR 2016

LTC Corporation (Part I)

LTC Corporation (Part II)

Gross Profit increased by… … 1,634%?!

Yup. That’s not a typo. Check this out:

447) LTC Corp earnings FY17Q2.jpg

GP, OP and PBT all increased by thousands of % points!

Now, that’s not a sight you see everyday. That really made me sit up.

Now, steel prices have gone ballistic in calendar Q4 of 2016. I was expecting this to be a positive for LTC, since the price they can sell their rebar steel at, is fixed by BCA, and the BCA figures reflect a massive hike up too:

453) BCA rebar steel in Jan 2017.jpg

Also, the net effect of a rising steel price means the inventory they are holding suddenly becomes more valuable, with 0 costs involved to achieve this gain.

Yet this massive jump in the form of thousands of % increase, is a surprise to me. It basically reflects what I’ve mentioned in the earlier posts.

Because LTC records the steel inventory via a weighted average price,

What this means is that in an environment of falling steel prices, losses get magnified.

The converse is true: in an environment of rising steel prices, gains get magnified.”

On a different note, this kinda shows how much the steel prices have gained in Q4 2016. That’s obviously a good thing for LTC Corporation, but NOT good for Dutech Holdings, one of my other key holdings.

Ah, they are all linked one way or another. I’d like to think there’s a natural hedge inbuilt.

FCF Generation Thesis Is Still Intact

The whole investing thesis is centered around the fact that LTC’s business is actually generating a ton of FCF every quarter, but previously it used the FCF to pay down debt. Going forward, the FCF should accrue. I’ve described that in the later part of this earlier post: LTC Corporation & Asia Enterprises Holdings – What Are Investors Missing?

448) LTC CF FY17Q2.jpg

For FY17 Q1 & Q2, the company generated operating CF of $16.8mil, with pretty much negligible capex of around $100k.

FCF generated in 6 months = $16.7mil.

And all this FCF is starting to show up in LTC’s balance sheet:

449) LTC Q1 results.jpg

FY16Q4 – Fixed Deposits $16.85mil, Cash $17.52mil. Total: $34.37mil

FY17Q1 – Fixed Deposits $26.96mil, Cash $25.11mil. Total: $52.07mil

FY17Q2 – Fixed Deposits $31.43mil, Cash $18.45mil (see BS below) Total: $49.88mil

450) LTC Q2 results.jpg

Yes, I’m aware that the cash and cash equivalents actually dropped a little bit comparing FY17Q1 vs FY17Q2, but we have to take into account the massive increase in “trade debtors” from $16.4mil in FY16Q4 to $26.67mil in FY17Q2.

This means that LTC has been doing brisk business of late, we see the value of the inventories dropping while the debtors increasing. LTC doesn’t have a track record of writing off bad debts, so we can safely assume all this trade debts will eventually be collected and converted to $$$. Credit terms given is usu 6 months (I think. It’s in the AR)

Writing Off Of Goodwill Incurred From USP Acquisition?

452) LTC JV company.jpg

This JV company is the 50% stake in USP. The value carried in the BS has been dropping every quarter.

The JV is recorded at $24.07mil as of FY16Q4.

Since the net assets of USP at the point of acquisition is given as $27.16mil, the 50% stake is worth $13.58mil on a net basis. The rest of this $24.07mil is made up of a goodwill amount of $10.49mil.

It is this $10.49mil that is being amortized each quarter. As of FY17Q2, the value has dropped by $1.55mil, so I am expecting the remaining goodwill portion to be $8.94mil.

Actually, all this is my assumption/postulation. LTC didn’t provide a breakdown or an explanation for the decrease in the value of the JV carried in the balance sheets.

Logically, it should be due to the write down of the goodwill portion. If it is, I’m happy. I like to be conservative. Keep writing down all the useless “goodwill” please.

There is a small chance though, that part of the drop is from the writedown of the net assets of the company itself, if the economic conditions are such that there is a material and permanent change in the assets of the company. (Better not be!!!)

I guess I wouldn’t know for sure until the AR17 is out in 6 months.

USP 50% Acquisition Still Sucks

Now for the bad news part. I’ve previously railed about how lousy the acquisition of USP is. Thus far, the results unfortunately, proved me right.

Oh, how I wish I’m wrong on this. How I wish USP can suddenly show tremendous profits and make me eat my words.

451) LTC USP sucks.jpg

Yup. The 50% stake contributed… $6k of profits in the past 3 months. So the entire SOGO business earned $12k profits in the past 3 months. Right.

For the past 6 months, the 50% stake LOST $636k.

Zzzzzzzzzzzzzzzzzzz. Come on!

And this is basically the conundrum I mentioned previously. The business generates a ton of FCF each quarter. Debt is pretty much gone. Yet, how the management utilizes this FCF is the key. Thus far, it’s not been very inspiring.


Alright. That’s my dissection of the LTC FY17Q2 financials. Nothing earth shattering really. The massive jump in gross profits is nice, it remains to be seen if it can be maintained.

What I’m more interested in though, is how the management utilizes the cash hoard that’s fast building up in the coming quarters.

For those who think that the cash will be distributed, don’t count on it. I’ve been watching these guys for some time and somehow, I know that’s going to be really unlikely.

Let me know if I missed out anything.

As always, happy hunting. And happy Valentine’s.

Best Quote I’ve Read This Week:

Poonified: A reminder every time I speculate on stocks:

“Even if you survived after running through a burning building, you’re still an idiot”