Reflections from my 6D5N Shenzhen/Hong Kong China Trip

 

I recently had the opportunity to explore both Shenzhen and Hong Kong, two cities in China that, despite their proximity, offer vastly different experiences.

Stepping into Shenzhen felt like landing on another planet. This is a truly Smart City which is a breathing testament to China's breakneck speed of development.

Towering skyscrapers, futuristic architecture, and a palpable energy permeate the air. Shenzhen is a city obsessed with innovation. Tech giants like Tencent and Huawei have their roots here, and the city's streets are teeming with startups and tech enthusiasts.

What struck me most was the city's relentless focus on the future. Everything from transportation to infrastructure is designed with efficiency and modernity in mind. The ubiquitous presence of electric vehicles, the seamless integration of technology into daily life, and the government's unwavering support for entrepreneurship create an environment ripe for disruption.

In stark contrast to Shenzhen's futuristic landscape, Hong Kong offers a harmonious blend of East and West. Its iconic skyline, a mix of colonial architecture and towering skyscrapers, is a symbol of its rich history and global influence. The city's vibrant culture, world-class shopping, and delectable cuisine make it a magnet for tourists and business people alike.

However, beneath the glitz and glamour, Hong Kong is grappling with its own set of challenges. The rising cost of living, political tensions, and the looming shadow of mainland China's influence are casting a shadow over the city's future.

It has been an unique, eye-opener and wholesome experience.

As shared in an earlier blog post, this was a budget trip funded by passive income and was booked merely 3 weeks in advance with minimal planning.

Here are some reflections on the trip.

Day 1: Arrival at Bao'an International Airport, Check-in Lan'Ou Hotel, Kingkey 100 Tower, Dongmen Pedestrian Street

Upon landing from a redeye flight, we are greeted by the modern and cool Shenzhen Bao'an International Airport.

The toilets are equipped with analytics display of the available vacancies and sensor readings.

After a 50 min bus ride, we arrived at Lan'Ou Hotel in Luo Hu district and was greeted by a decent lobby. What more to expect from a 3 star hotel which costs just $40 a night?

The room is small but cosy and equipped with voice controlled features.

Breakfast buffet spread was decent too.

In the afternoon, we visited the Kingkey 100 Tower, a supertall 442m skyscraper with 98 storeys and is the 2nd tallest building in Shenzhen. In comparison, the tallest building in Singapore, Guoco Tower is only 283m tall.

The bustling Dongmen Pedestrian Street was the final destination in the evening. This iconic McDonald outlet was the first to open in China in 1990.

The streets are packed with aspiring musicians, singers and dancers who are flauntng their skills and talents on Douyin, the Chinese edition of Tik Tok.

Day 2: Hong Kong - Tsim Sha Tsui, Avenue of Stars, Victoria Harbour, International Finance Centre, Central Mid-Levels Escalator, Electric Pram, Festival Walk Mall

Day 2 was interesting as we visited Hong Kong for the first time in our lives and entered by foot as we trudged into the immigration via Luo Hu Port from Shenzhen. Clearing both immigrations was a breeze and took less than 40 mins.

The first stop in Hong Kong was Tsim Sha Tsui where the Avenue of Stars is located and Victoria Harbour view can be appreciated.

Statue of Bruce Lee can be found.

We then took a ferry across the river to Central.

We then walked to International Finance Centre and headed up to Level 55, which is the Hong Kong Monetary Authority Museum with free viewpoints of the city.

After lunch at the nearby Central Market, we explored the longest escalator in the world.

We then took an electric pram, Ding Ding across the Hong Kong Island for sightseeing.

In the evening, we visited the Festival Walk Mall owned by MPACT and had light dinner there before heading back to Shenzhen.

Overall, I find the standard of living in Hong Kong much higher than Shenzhen and the food and transportation prices are more costly than Singapore's. We spent more than $70 on transport and food alone in half a day without even visiting tourist spots and restaurants at all.

Day 3: Kingkey Banner Centre, Seaworld and Shekou City walk

We started the day with some shopping at the Bigoff outlet in Kingkey Banner Centre, at Shajing, north of Shenzhen. Authentic old stock of branded clothes can be found and knock-down clearance prices ranging below $15 for a T-shirt and below $40 for a pair of Adidas or Nike sneakers.

We also strolled around the mall to see many electric vehicles of various brands i.e. Xiaomi, Huawei, BYD being exhibited in shops. Competition is indeed stiff for electric vehicles in China.

Lunch was late at 4pm and settled at Mcdonald. a promo set meal costs just RMB 13.90 or $2.60 only.

In the evening, we visited the Sea World at Shekou, where an old ship Minghua is docked as the main attraction accompanied by a few malls, tons of restaurants and shops. The water fountain light show was enthralling and showcased the high precision technology and able to shoot water up to a height of 50m.

Dinner at Xijiade Dumpling 喜家德水饺 concluded the day. It was sumptuous and costs just RMB 47 or less than $9 for 2 pax.

Despite being the third richest city in China, I think the standard of living in Shenzhen is still a far cry off Singapore's.

Day 4: Qiushuishan Park, Shenzhen Bay Park

In the morning, we visited a non-touristy Qiushuishan Park where there is a small replica of Great Wall of China and viewing point of the entire Shenzhen landscape.

Lunch was at a nearby MixC mall where many restaurants offered promotion during off peak hours from 2 to 5pm. We eventually settled for a RMB 99 or $18 promo set meal at Goose Prince restaurant which was delectable.

The day was concluded at Shenzhen Bay Park which offers a panoramic view of Shenzhen skyline and new territories, Hong Kong. It is a too crowded and swarmed by the locals though.

Day 5: Huaqiang Bei Commercial Street, Bao'an International Airport

Day 5 was almost the last day as our flight was at 3.30am on the next day. We packed up and checked out of the hotel at around 1pm before exploring the Huaqiang Bei Commercial Street, which hosts an electronics and digital hub exporting gadgets and electronics parts wholesale to rest of China and the world. We had lunch there and visited a few malls, each specialising in mobile gadgets, assessories or computers respectively.

Lunch was sumptuous and cheap at a Canton style restaurant called 楼上楼. Both set meals cost RMB 48 or less than $9 in total.

We then recced the individual malls to witness the gigantic scale of wholesale export operations and pre-owned mobile phone market.

Dinner was simple and cheap at KFC costing just RMB 39.8 or $7.40 for 2 pax before we went to collect luggage from hotel and headed to the Airport.

We reach the Airport before midnight and checked in early for our flight.

Due to shortage of time, there are many places of interest that we did not manage to cover - Window of the World, Ping an Tower, Splendid Folk village, Dafen oil painting village, other parks and so on.

Let me briefly share on some takeaways from this trip.

1. Digital Cash is the future King

Immersed in the digital ecosystem of payments and micro-apps in Shenzhen, we did not encounter any failure despite initial glitches with registration or timeouts in the Wechat and Alipay apps. In China we could ditch away our wallets and purses as cash, coins and keys become obsolete in a Smart city. It is strange to realise that no shop nor restaurant encourage manual orders nor accept cash. We could easily top up our multi-currency cards such as Youtrip, Wise, Revolut or even use native OCBC, UOB or DBS apps to scan Alipay or Unionpay QR codes in China for payment. Digital Cash is just numbers online and will be the King of the future!

2. Transport is robust and complex

The metro system in Shenzhen is much more complicated and complex than Singapore's. There are 16 lines, each with different colours- navy blue, light blue, purple and so on. Usually, from point A to point B, there are more than 3 routes and we need to find the most efficient route by Baidu map. Fewer stops do not mean shortest path.

3. Chinese technology is impressive

While using Baidu for GPS navigation, I realized that they are much better than Google map in terms of reactivity, precision and accuracy. We will be prompted instantly on a any deviation from proposed route and the accuracy can be down to less than 1m. I was impressed that Baidu is able to detect in real-time the station I am at on the bus or metro while during navigation. The computation of estimated time of arrival is also very precise. The widespread adoption of smart technologies, electric vehicles, apps and sensors in the city could cause over reliance on power and promoted the need for power banks rental stations for phones and battery swapping stations for electric vehicles. Robots and AI technologies are also prevalent in hotels, retail industry and payment scenes. Alipay supports facial payment while Wechat pay supports palm payment. Technologies used for advanced use cases such as clearing immigration are beginning to be being deployed widely for daily use needs.

4. Great food and hotels at affordable prices

The food in Shenzhen is predominantly Canton style, delicious and at much cheaper prices compared to Singapore or Hong Kong. They also have local food shops like coffeeshops in Singapore offering $3 rice or noodle buffet with local dishes. Their atas restaurant prices are only at our food court levels while our restaurant food prices can afford fine dining or international buffet in Shenzhen.

5. A City Rich with Culture and Vibes

Contrary to the claims of those who view Shenzhen as lacking in culture due to its significant migrant worker population, I believe the city is both vibrant and welcoming, with a unique and dynamic atmosphere.

Situated in the Pearl River Delta region, Shenzhen boasts a prime location, surrounded by natural beauty and positioned at the crossroads between Asia and the West.

My travels between Shenzhen and Hong Kong underscored the rapid pace of change in Asia. Shenzhen's relentless drive for innovation and openness to the future serve as important lessons for cities worldwide. Meanwhile, Hong Kong’s rich historical tapestry and global connectivity highlight the value of preserving cultural heritage while navigating contemporary challenges, much like Singapore’s approach.

Thank you for reading.

With love & peace,

Qiongster

Sold ST Engineering

 

The share price of ST Engineering (S63.SI) has surged in recent months on the back of strong Q1 2024 financial results when it posted an 18.1% revenue to $2.7 billion and a 20% rise in H2 profit to $306 million. In June 2024, ST Engineering also announced over $100 million worth of ammunition orders from Europe and development of a fourth new data centre in Jurong, adding 7.5 MW of capacity to its portfolio. Most recently yesterday, they signed a 2 year agreement with Safran Aircraft Engines for engine repair support.

ST Engineering has a strong proven track record of being a resilient, defensive conglomerate business which rewards shareholders consistently with 4 cent dividend per share quarterly. However, I decided to sell it off today as its share price hit new 52 week high.

I believe ST Engineering is now fairly valued or slightly over valued. Its yield has been compressed to just 3.6% based on $0.16 dividend at $4.40 share price. Its share price is also at the resistance level hence may retrace to the next level of support if it fails to strongly cross above the $4.40 resistance level. Its price to book value of $0.79 is 5.4 times which is rather high. 

I wanted to lock in the profits of these ST Engineering shares which I bought in 2017 at just $3.22. Inclusive of the cumulative dividends collected which is around $5k, the total profits amount to around $10k, which is more than 60% of the $15k capital invested, too enticing to not take off the table.

A key concern of ST Engineering is its heavy reliance on debts to fund its growth and operations. At a current total debt level of $7.3 billion and short term debt of $2.5 billion, its debt to equity ratio is at >2 , which may erode into its future profitability in today's high interest rate environment. 

While ST Engineering shall continue to do well in the next couple of years, it may struggle to maintain the $0.16 dividend at the expense of shareholders in the long run.

I have the funds out of ST Engineering and may consider buying back should its share price fall below $3.80 in future.

Thanks for reading.

With love & peace,

Qiongster

Dividend Funded China Trip

 

I am finally back on Chinese soils, after 23 years when I first visited Shanghai as a teen. Since the pandemic, intense lockdowns have made it difficult to visit China. 

Now that borders are reopened and flight prices have subsided, I decided to make a trip to China for sightseeing and chillaxing.

This is a budget trip with promotional Singapore Airline flight at $277 round trip per pax and 3 star accommodation for $200 over 5 nights.

I get to experience the impeccable service of Singapore Airlines. Watching Euro match between Slovakia and England on a plane while sipping Singapore Sling at 36000 feet above ground in the skies is something so surreal. There is also free Wifi for economy passenger with Krisflyer membership. Supper and dessert are sumptuous too.

This is a fully digital payment immersion in China as we went cashless totally by equipping with Alipay and WeChat apps linked to Youtrip, OCBC app for scanning UnionPay QR codes and DBS UnionPay debit card as contingency.

All-in budget is merely $1k for a week in Shenzhen and Hong Kong for 2 pax, fully funded by dividends collected in the past weeks.

Shenzhen has enjoyed tremendous advancement and growth in the past 2 decades to become a modern smart city with standard of living comparable to Singapore's but edging out with more widely adoption of technologies such as analytics, AIs and robots.

We hope to experience a week of local lifestyle living life carefree while enjoying freedom to the maximum, without splurging like tourists.

Arriving early in the wee hours from the redeye SQ flight, an overnight bus from Shenzhen Bao'an International Airport to Luohu district costs 50 Yuan for 2 pax or S$9.43 using Alipay.

A bowl of noodles costs 13.9 Yuan or S$2.62 in a simple restaurant which is cheaper than Singapore.

In the evening, we visited the bustling Dongmen Pedestrian Street flooded with Tiktokkers singing and dancing activities. We enjoyed delicious snacks sitting down while different dancers whizzed by and street peddlers took up positions randomly.

On the 2nd day, we crossed the Shenzhen Luohu Port border for a day trip in Hong Kong. Clearing immigration on both sides was seamless other than the hazzle of filling up arrival forms manually.

We tried to go cashless in Hong Kong by just using Visa credit card where their MTR accepts Visa credit cards for selected gantries. The processing takes a day and I was appalled that it costs more than $7 to travel on MTR from Lo Wu to Tsim Sha Tsui East, where we visited the Avenue of Stars, Victoria Port and took a ferry to Central.

Handprint of many HK stars including Jackie Chan at the Avenue of Stars

View of Victoria Harbour

We paid just HK$5 for the ferry to bring us across to Central at the opposite end of the river for less than 10 mins ride.

We walked to Two IFC and headed up to L55  Observation Deck and Hong Kong Monetary Authority Museum which is open to the public including foreigners for stunning awesome view of the landscape and brief education of Hong Kong's monetary and banking history all for free!

We then headed to Central Market mall for lunch followed up ascending up the longest escalator in the world, the Central Mid-Levels.

We hopped on an electric pram, Ding Ding which has flat fee of just HK$3 (regardless of distance) to Quarry Bay MTR station, enjoying the ultimate roof top tourist experience.

As an MPACT shareholder, I visited the Festival Walk in the evening for dinner before heading back to Shenzhen. The mall is larger than expected and bustling with activities. It is surprising that a mall comparable to Vivocity in terms of retail presence is of subpar performance financially due to geographical differences.

On the 3rd day, we went to an outlet shop, Bigoff in Kingkey Banner Centre in Shajing, Shenzhen to do some shopping of branded authentic clothings. Prices are incredibly low as those are leftover stocks 2 to 3 years ago from the pandemic days. Puma, Reebok and Adidas tees range from $4 to less than $18 on average. Shoes are arranged according to foot sizes and many are outdated designs.

Wrapping up the 3rd day, we visited the Sea World where the focal point is a cruise ship, Minghua surrounded by many shops and restaurants with cool vibes.

As at time of writing, I am merely into the 4th day of this eye-opener mainland trip and has been enthralled by the overall experience, not just the digital payment, but also witnessing toilet analytics, robots entering lift and making coffees, smart hotel room controlled by voice, smart food ordering via qr scanning and so on.

It has been tiring with a lot of walking and exploration but I hope to enjoy more surprises and great experiences in the next 3 days before heading back to Singapore.

A decade ago, I could not imagine that I could travel without worrying about finances. After investing for close to a decade, I am finally able to do so with passive cash flows from dividends.  

This is a just quick sharing on my current travelling experience.

Thanks for reading.

With love & peace,

Qiongster