TheFinance.sg » AK71

Saizen REIT: To buy or not to buy?

AK71 — Wed, 23 May 2012 14:43:00 +0000

Regular readers would know my whole story with Saizen REIT. I remain invested in the REIT for various reasons which I believe are still valid.

This blog post is to answer a question which I have received from readers, friends and family alike. Is it a good time to buy more units of Saizen REIT?

This is a question which I would avoid giving a direct answer to. There is a great deal of subjectivity.

However, I would present some numbers here and you decide.

The annualised DPU is some 1.22c based on the last payout. At 13.6c a unit, the distribution yield is some 8.97%. Sounds good?

However, bearing in mind that its warrants will expire on the 1st of next month, I expect the warrants to be fully exercised within these few days. The exercise price is 9c. This would increase the units in issue by …

AIMS AMP Capital Industrial REIT: Scrip Dividend.

AK71 — Sun, 20 May 2012 04:31:00 +0000

I have yet to participate in any distribution reinvestment plans. I like to buy more units or shares at prices I deem fair or undervalued. Now, this is probably a subjective exercise but I like the fact that I have control over the purchase prices.

When AIMS AMP Capital Industrial REIT announced that it would be offering a distribution reinvestment plan in April, I said that I would not be taking up the offer for two reasons:

1. I am investing for regular income and would like to have the quarterly distribution in cash.

2. I was not keen on increasing my exposure to the REIT at the prices then.

The REIT’s unit price has taken a dive and the selling momentum could bring it closer to $1.00 a unit in time.

Those who accepted the distribution reinvestment plan would be getting new units issued at $1.1622 per unit which …

Charts: China Minzhong, Wilmar, Yongnam, Sabana REIT, AIMS AMP Capital Industrial REIT.

AK71 — Fri, 18 May 2012 12:12:00 +0000

I have a friend who told me that he wants to buy more of China Minzhong at 50c. Why 50c? He can’t quite say. Anyway, at 50c, I would have lost almost half of my initial investment in the company…

What does the chart say? Momentum is definitely negative and the MACD is still in decline. What is encouraging is the reducing volume over the last three sessions although it remains elevated. Today, a white spinning top was formed. Could this be a reversal signal?

Well. the OBV is still in decline which suggests distribution is ongoing even as price weakened. The MFI though seems to be forming a higher low.

The MFI takes into consideration both volume and price and is often seen as a measurement of demand momentum. So, it is telling us that there is some demand coming back as the stock was savagely sold down. A …

Wilmar: Settling dust?

AK71 — Sun, 13 May 2012 06:22:00 +0000

Bollinger bands are very popular in TA. Upper band acts as resistance and lower band acts as support. Look at Wilmar’s daily chart, we see that price has pushed past the lower band. This gives us a very bearish picture. Support is weak. It also tells us that the counter is deeply oversold but remember that in very bearish conditions, oversold can stay oversold. It really doesn’t say anything else.

Conventional TA tells us that we should buy when price breaks the lower band. This is to take advantage of oversold conditions. The belief is that, eventually, price would return to the lower band and then the middle band. The operative word here is “eventually“. When exactly? Your guess is as good as mine, is it not?

Anyone who bought Wilmar’s shares three sessions ago as it closed below the lower band at $4.70 would be licking …

Saizen REIT: Acquisitions to increase DPU.

AK71 — Thu, 10 May 2012 14:07:00 +0000

To me, there are only a few important points to note in the REIT’s latest presentation:

1. Management is on an acquisition path as this is probably the only way to increase DPU as it seems difficult to bump up occupancy of existing portfolio. Occupancy: 91.6%.

2. Potential dilution of DPU to the tune of 12% as warrants are exercised (if funds thus obtained are not put to productive use).

3. NAV per unit (adjusted for warrants): 29c

4. Gearing (adjusted for warrants): 21%

5. Interest cover ratio: 5.2x

Assuming that the management is able to put funds from the exercising of warrants to good use and push gearing to 35%, we could see DPU improve some 30+% from current levels (in JPY terms) based on the management’s guidance.

Remember that all the numbers here are based on the current exchange rate between the JPY and S$. As I …

NOL: Bleeding badly.

AK71 — Thu, 10 May 2012 05:21:00 +0000

On 2 February, I cut losses on NOL as its share price rebounded believing that “shipping industry will face a chronic situation of oversupply and weakening demand this year and possibly the next.”

Blow-out 1Q12 Net loss. Neptune Orient Lines (NOL) reported a 1Q2012 Net Loss of USD 253.6 mil, blowing away our already pessimistic FY2012 (read: full year) net loss estimates of USD 160 mil, not to mention consensus estimates of a FY2012 USD 31 mil loss. We maintain our SELL call on NOL and reduce our Target Price further to SGD 0.85 based on 0.8x forward P/B. The bleak outlook in the shipping industry, coupled with global economic uncertainties will likely push a firm recovery for NOL to 2014. (Source: Kim Eng Research)

Neptune Orient Lines (NOL) reported a net loss of US$254m in 1Q12. Logistic revenue grew 7% YoY to US$394m but …

Wilmar: Mr. Market reacts to weaker earnings.

AK71 — Thu, 10 May 2012 03:00:00 +0000

Wilmar’s net profit for 1Q 2012 tumbled 34%, year on year. Mr. Market is showing his displeasure in the usual way.

Let us draw some Fibo lines. I am using the high of 15 February at $6.05 and the low of 9 April at $4.76. I am doing this in my office and cannot post the chart here. So, you would have to do it yourself if you want to see the chart.

It is interesting how price gapped down massively at the start of the trading session just now and hit the 138.2% Fibo line and bounced up. At this moment, we have a black hammer that fills the area between the 123.6% Fibo line ($4.46) and the 138.2% Fibo line ($4.26). Could we see price going to $4.11 which is where the 150% Fibo line approximates?

The very high volume up till now is …

Should have sold in May and gone away?

AK71 — Mon, 07 May 2012 13:17:00 +0000

In The Straits Times and The Business Times today, there are at least three articles which mentioned “sell in May and go away” and whether it holds any water. Has anyone sold a large part or all of their investments in the last few trading sessions?

Well, today, global stock markets retreated as the Greeks and the French elected new leaders into government. They are sick of austerity measures and they spoke with their votes! European debt story is still very much the key sentiment driver for global stock markets, it would seem.

Asian markets and the euro slumped on Monday after voters in France and Greece voted out their ruling parties in a backlash against austerity measures aimed at battling the eurozone crisis. Read article here: CNA.

I am not an economist. I am not a political scientist. Some issues are definitely beyond me. So, what do I do?

Someone …

LMIR: 1Q 2012 DPU 0.69c.

AK71 — Mon, 30 Apr 2012 03:22:00 +0000

I remember saying that LMIR was too cheap to sell in December last year. It was trading at 36.5c a unit then.

I also remember saying that unitholders should be more patient after the rights issue because the REIT’s DPU would bump up in time. The rather low DPU of 0.53c for 4Q 2011 would not be the norm. I estimated the norm to be a DPU of 0.815c per quarter or 3.26c per year. In fact, quarterly DPU could surprise on the upside in time.

LMIR announced a higher DPU for 1Q 2012 as expected but the quantum of 0.69c is lower than the 0.815c I estimated. Is the management taking too long to deliver the goods, post rights issue?

I have, of course, questioned the quality of the management a few times before and readers who have been following my blog from its …

Suntec REIT: Q1 2012 DPU 2.453c.

AK71 — Tue, 24 Apr 2012 14:50:00 +0000

I still retain a small position in Suntec REIT at a cost price of about S$1.00 a unit which I purchased towards the tail end of the last financial crisis. This small position is free of cost, actually, since the gain from selling most of my investment in the REIT more than covers its cost. For me, this is what some would call a pillow stock. Sleep on it and get free money.

Gearing: 37.4%

Interest cover ratio: 4.2x

Credit rating: Baa2

NAV/unit: $1.962

DPU: 2.453c (XD 30 April. Payable on 29 May.)

Would I add to my long position or would I sell? I would not be doing either. The REIT’s unit price at $1.285 is not expensive but neither is it cheap. So, I am keeping the status quo.

Although the office market remained subdued in the first quarter of 2012, the trust said its …

Sabana REIT: 1Q 2012 DPU 2.26c.

AK71 — Sat, 21 Apr 2012 13:30:00 +0000

The REIT’s yield accretive purchases of five properties last year has helped to push DPU to 2.26c for 1Q 2012. Annualised, this would give us a DPU of 9.04c. Based on the REIT’s last closing price of 97.5 per unit, we are still looking at a distribution yield of more than 9%. 9.27% to be more exact.

With a NAV/unit of $1.04, the REIT is still trading at a discount to NAV even though its unit price has risen significantly in the last few months.

Gearing: 33.9%.

Interest cover ratio: 5.5x.

Occupancy: 96% to 98.4%.

WALE: 2.6 years

Weighted average remaining land lease: 39.9 years.

The REIT will go XD on 25 April and income will be distributed on 29 May.

I would like to see the managers working to increase occupancy and negotiate lease renewals with positive rental reversions this year. …

First REIT: 1Q 2012 DPU 1.93c and a higher fair value?

AK71 — Sat, 21 Apr 2012 02:56:00 +0000

First REIT has declared a DPU of 1.93c. The unit price of First REIT has been rising steadily. It is clear that Mr. Market is willing to pay a gradually higher price for the REIT’s units which leads me to wonder if we could see First REIT’s distribution yield compressing to 6% which would bring it closer to PLife REIT’s distribution yield which is currently under 6%. This could see the REIT’s unit price going to $1.06.

When calculating distribution yield, I would rather use a DPU of 1.6c per quarter instead of 1.93c. Why? When we look at the numbers, we would see that the net property income (NPI) has improved 6% while distributable income has improved some 22%. This is because First REIT is still paying out its gains from divesting its Adam Road property. If we remove this component, the DPU should hover at 1.6c …

SPH: Interim dividend of 7c per share.

AK71 — Sat, 21 Apr 2012 01:29:00 +0000

SPH remains my largest investment in a blue chip. Over the years, it has been very good to me. Last year, I had hoped to buy more SPH shares if price should dip to $3.60 a piece but it never did.

Clementi Mall.

Singapore Press Holdings’ (SPH) 2QFY12 PATMI came in at S$83.9m, or 5 S-cents per share, which was 16% higher YoY. 1HFY12 PATMI now make up 46% of our full year forecast, falling short mainly due to lower investment income.

2QFY12 topline was S$298.5m – in-line with our expectations – and making up 50% of our full year forecast. An interim dividend of 7 S-cents was declared.

We continue to view SPH favorably as it continues to ramp up on its retail mall strategy – a stable counterweight to its print business going forward. Group investible funds currently stand at S$0.9bn, which points to sufficient capacity for …

AIMS AMP Capital Industrial REIT: 4Q FY2012.

AK71 — Fri, 20 Apr 2012 05:02:00 +0000

AIMS AMP Capital Industrial REIT has declared a DPU of 2.7c for 4Q FY2012. Total DPU for FY2012 is, therefore, 10.45c. At the last session’s closing price of $1.185 a unit, this means a distribution yield of about 8.82%. The REIT goes XD on 2 May and will distribute income on 19 June.

Gearing: 30% (which would drop to 28.8% upon completion of sale of 31 Admiralty Road). 25 properties revalued upwards and this probably helped to lower the REIT’s gearing.

NAV/unit: $1.406.

Interest cover ratio: 6.2x

Occupancy: 99.2%.

Weighted average land lease expiry: 41.7 years.

Weighted average lease expiry (WALE): 2.62 years.

Average security deposits: 8.1 months.

The REIT also saw positive rental reversions of 10 to 15% in FY2012.

With 38.9% of leases expiring in 2013, the management has either commenced negotiations to extend the leases …

FCOT: DPU up 16.8% in the last 18 months.

AK71 — Fri, 20 Apr 2012 02:56:00 +0000

I did a piece on FCOT in October 2010 when I said that the REIT has probably turned the corner. At that time, it was trading at 15.5c a unit (which would have been 77.5c a unit, post consolidation). It closed at 87.5c in the last session.

DPU was 0.5549c then (which would have been 2.7745c, post consolidation). FCOT has declared a DPU of 3.2423c for 1H FY12 which means that DPU has increased some 16.8% from 18 months ago. It will go XD on 25 April and income distribution will take place on 30 May.

Annualised, we are looking at a distribution yield of 7.4% at a unit price of 87.5c.

Distributable income increased 7.7% YoY to S$15.9m as a result of lower interest expenses.

Average portfolio occupancy eased marginally to 96.1% from 97.6% seen in 1Q.

…

Cache Logistics Trust: 1Q 2012 DPU 2.086c.

AK71 — Thu, 19 Apr 2012 03:11:00 +0000

It is no secret that I like industrial S-REITs as passive income generators. I am also vested in Cache Logistics Trust although my long position here is quite a bit smaller compared to my investments in Sabana REIT and AIMS AMP Capital Industrial REIT.

DPU for the quarter came in at 2.086 S cents and represented a 6.9% YoY increase.

Income distribution is payable 30th of May 2012.

CACHE’s portfolio properties remained 100% occupied.

The weighted average lease expiry (WALE) stood at 4.4 years.

Aggregate leverage improved from 29.6% as at 31 Dec 2011 to 27.7%. This gives the REIT an …

Cache Logistics Trust: 2Q 2011.

AIMS AMP Capital Industrial REIT: Credit rating.

AK71 — Wed, 18 Apr 2012 07:26:00 +0000

Life has been somewhat stressful for me lately. Lots of things happening. That explains the paucity of blog posts.

I am trying to get up to speed with things and also trying to catch up on my reading of business periodicals which I have neglected lately.

In today’s The Business Times, I read that AIMS AMP Capital Industrial REIT has received an investment grade credit rating of BBB- from Standard & Poor’s. This is good news indeed. This rating is the same as the one received by Sabana REIT last year in August.

This means that AIMS AMP Capital Industrial REIT would be able to access investment grade debt and capital markets from now on. It would also allow the REIT to gear up to a maximum of 60% if necessary.

Anyone who has been following my blog would know that I have been walking the talk when it comes …

Fraud: Taking money from some adults is like taking candy from a baby.

AK71 — Mon, 09 Apr 2012 02:14:00 +0000

If people promise us easy money, we should have to be very cautious. What is it about? How is it possible? Why is it so? Don’t be a victim of fraud.

Just a few weeks ago, a client told me how he was given some physical gold for investing some money in a company. Apparently, the gold given to him was worth some 60% of the money he invested. In case the company went belly up, a new investor would only lose 40% of his capital. The promised annual return was some 25% of the initial sum he invested, if I remember correctly. So, after holding for two years, an investor would be “safe” even if the company were to close down.

The person who got him involved in this “investment” was with him at the time and tried to get me to join them. After all, a consistent 25% annual return is a mind-boggling …