• Timothy

Dec Portfolio Review: The $100,000 Milestone



Bought

- 1000 SIA (C6L) @ $3.805


Nibbled again on SIA, this time buying 10 lots. I'm still long on the view that I should focus on businesses that have remained suppressed in Phase 2, but will benefit as we move into Phase 3.



The $100,000 Milestone


I've mentioned briefly in other posts that I would ideally like to see my portfolio exceed $100,000 by the end of this year. Well, a few days ago, it did just that! It took me about 5 years to build up this amount. Well, actually, it was only in 2020 that I injected enough money to form ~80% of the portfolio. Thanks COVID! It also helped that some investment decisions made during that time assisted by the last few weeks of rally to tip it over this milestone.


Next stop, $200,000! Hopefully in 3 years time.



My Thoughts On Cold Chain Supply for Vaccines


As we start into the era of vaccines, the latest buzzword in the next few weeks/months would be 'cold storage'. Why? Because the vaccines require them. So as such there will be businesses, who if pivoted correctly, can stand to gain in the coming year ahead. We've seen how businesses have tried to repurpose manufacturing lines from producing cars to producing masks, and I won't be surprised if this will be the same for vaccines. However businesses already in cold storage will probably find themselves possessing a moat, because it's not something you can easily create space for if you are not already in a similar business model.


There will most likely be two things that will differentiate businesses who can pivot successfully from those who cannot -- time and space. Time-to-market is of utmost importance as one cannot win contracts if you can only complete your cold storage facilities 'sometime next year'. Vaccination storage cannot wait, and the contracts to store the vaccines will most likely be awarded to those who are already ready. Second, space. Assuming all else stays constant, I don't think you can repurpose your assembly line to be converted into cold storage facilities without drastically changing your core business model. Not many businesses can afford to do that.


Hence the ones that will probably gain the most are those who already have under-utilized storage capacity due to COVID. The obvious one would be SATS:

https://www.straitstimes.com/singapore/health/spore-ready-for-cold-chain-transport-of-vaccines


A few things that will set SATS apart from the rest:

- They can handle the transportation of the vaccines

- Possesses a temperature-controlled airfreight terminal

- Situated near the airport

- Already have existing infrastructure and know-how to handle bulk shipments of items


In other words, a vertically-integrated one-stop solution for transport and storage, much like Wilmar. I like.


At the same time, I predict that there will eventually be a vaccine developed which do not need strict temperature requirements, something which will be stable at room temperature. Until then, 'cold storage' will be the word that pricks up the ears.


Merry Christmas, stay safe, and have a blessed new year!

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