Author: Investment Income for Life

US Senate Unanimously Passes Hong Kong Human Rights And Democracy Bill- More Harm Than Good To Hong Kong

I was flabbergasted by some folks from Hong Kong who seem extremely pleased with the passing of the Hong Kong human rights bill by the US Senate. The bill if executed will be mostly detrimental to Hong Kong’s economy. It will lead to economic slowdown and also job losses for the Hong Kong people. Under this weird bill, the US Secretary of State would have to certify at least once a year that Hong Kong retains enough autonomy to qualify for special US trading consideration that bolsters the status of Hong Kong as a world financial centre. Losing the...

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Singtel Share Price Resilient In the Face of Billion Dollar Impairment and 2nd Quarter Losses of S$668Mil

Singtel is a very funny and weird stock. In late December 2018 to early Jan 2019, the share price dropped below S$3 per share when it was making quarterly profits of over S$680Mil. However, when it was announced recently that Singtel had made a huge loss of <S$668Mil> for its second quarter results, its share price dropped only slightly from S$3.30 to S$3.18 which is a mere decline of only <3.64%>.  I am not sure whether shareholders of Singtel recalled that in March 2019, Singtel had just subscribed to a rights issue of S$730Mil  worth of additional shares for...

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Eagle Hospitality Trust Q3 FY2019 Performance- Is Hurricane Dorian the only main reason for the underperformance against IPO forecast?

The release of the Q3 FY2019 financial results for Eagle Hospitality Trust (“EHT”) turns out to be neither reassuring nor promising. EHT missed forecast by <10.6%> and <2.7%> for revenue and net property income respectively. Since EHT did not display a convincing set of superb performance, it will lead to persistent lingering doubts over the quality as well as fair valuation of the hotel assets being injected into the Trust. Without a strong performance to quell the rumors, the share price will probably languish on for the next 3-6 months albeit some short term upside. Q3 FY2019 financial performance-...

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Singapore Press Holdings and SPH REIT Review- Media Segment Continues to Worsen But Bright Spot From Property Segment

Singapore Press Holdings (“SPH”) continues to face headwind in its Media Segment. The media  business faces decline in print advertisement and circulation revenue. Worse still, the bloodletting from technological disruption has not reached the trough and its operating results is expected to deteriorate. Media revenue dropped from S$ 656Mil in FY2018 to S$ 577Mil in FY2019 which is a 12% decline. Media profit plunged from S$98.7Mil in FY2018 to S$54.7Mil which is a shocking 44.6% decline. At one point in time, its share price dipped below S$2 per share. Another round of retrenchment exercise has been announced by SPH...

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First REIT Q3 FY2019 Performance Review- Does The Decline In Property Income Signal Trend Of Worsening Performance Of Siloam Hospitals?

It is interesting to see the financial announcement from First REIT shouting out “First REIT achieves stable DPU of 2.15 cents for Q3 2019”. As with all marketing techniques, highlight the good extensively but downplay the bad news.  Despite maintaining the quarter DPU to 2.15 cents, rental and other income for the quarter dipped 1.5% YoY to S$28.8Mil as a result of lower variable rental component for the Indonesian hospitals. In addition, net property income dipped 2.5% YoY to S$28.3Mil due to higher property expenses for its South Korea and Indonesia properties. Does the decline in property income signal...

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Eagle Hospitality Trust Imploded From Within On Valuation Concerns Of Other Hotel Assets In Portfolio-Down 40% To All Time Low From IPO Debut In May’19

During my last post, I have pointed out that besides the “Curse of the Queen Mary”, there are at least a few scenarios that can happen to cause further downsides. Unfortunately, a new issue did indeed surfaced besides the “Queen Mary potential lease default rumor”. Based on the recent announcement by Eagle Hospitality Trust (“EHT”), SGX had raised several queries with regard to the other hotels in the stable of portfolio of EHT. Investors panic and it seems that they do not buy the reply by EHT management and became even more skeptical on the valuation of the other...

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Sengkang Grand Residences Mixed Integrated Development at Buangkok MRT

Sengkang Grand Residences is one of the most anticipated new launch of the year. This development  is directly linked up with Buangkok MRT station and it has a hawker centre and retail mall inbuilt into it. Residents living in Sengkang Grand will enjoy convenient access to all these amenities right under their home.  As this is a CDL and Capitaland joint development, one can be assured of the quality of luxury finishing of their purchased home.  Prices are expected to start from S$1,600psf plus and estimated pricing as follow:(i) 1 bedder + study: S$798K;(ii) 2 bedder: S$998K;(iii) 3 bedder:...

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Price Meltdown For Eagle Hospitality Trust- The Curse Of Queen Mary

Eagle Hospitality Trust (“EHT”) IPO debuted at a price of US$0.78 per unit back in May 2019 with lackluster response from retail investors which resulted in one of the worst ever under subscription record for the year. It eventually closed off at a disastrous pricing of US$0.73 per unit for the day which was a 6.9% decline. The nightmare does not end for shareholders of EHT as it continues to plunge in value into the USD$0.64 to USD$0.70 range over the next few months. Unfortunately, the bloodbath rages on with a price meltdown when the issue of lease default...

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First REIT Review PART 2- Super High Yield of Over 8% And Possibility of 80% Drop in Rental Income For Upcoming Renewal Of Expiring Hospitals

During my last posting on First REIT, I have mentioned the shocking analysis by Phillip Securities Research team that there is a potential 80% rental income gap once Lippo Karawaci exit itself from the upcoming lease renewal exercise of the first batch of expiring hospitals and leave negotiation to between First REIT and Siloam group. I have written an email to the Investor Relation team of First REIT to seek further clarifications on the assertions that were being made by the analyst.  This morning, I received a return call from First REIT Investor Relation officer. I must say that...

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First REIT Review- Super High Yield of Over 8% And Possibility of 80% Drop in Rental Income For Upcoming Renewal Of Expiring Hospitals

I just saw something shocking from an analyst report by Phillip Securities Research on 7th October 2019 with regard to First REIT. Basically, the uncertainties over the lease renewal of expiring hospitals and a hotel in 2021 seems to be the main cause of the low unit price despite the completion of the fund raising via rights issue exercise by Lippo Karawaci to resolve the previous rental default risk. Apparently, there is another significant risk of as much as 80% income support deficit should the sponsor decides to leave direct negotiation between Siloam and First REIT. This information is...

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The Never Ending Hyflux Saga- Utico Deal May End In Shambles

I was very disappointed last month when the Court again grant Hyflux another 2 months extension of the debt moratorium again. It was alleged that the predominately show stopper was the inability of the senior management of Hyflux to resolve the cap of S$25Mil imposed by Utico over professional and advisors’ fees in the restructuring agreement. Power struggle over board representation was also alleged to be the other issues holding back the signing of the restructuring and capital injection agreement by Utico. The absolute lack of meaningful progress was even after Utico has managed to get creditors’ approval for...

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The Tragic Fate of Singtel- Will Price Plummet Continue?

Since Singtel announced its Q1 FY19/20 results (ending 30 June 2019) on 8th August 2019, it has dropped from its peak of S$3.56 per share on 5th July 2019 to the current S$3.10 per share. That is a huge plunge of its share price by almost 13% within 2 months. But if one compares Q1 FY19/20 to the prior Q1 FY18/19 financial results of a whopping 35% drop in profits, then this is considered as just a small chink in the armour of Singtel. Even if we just compare it to the previous quarter of Q4FY/18/19 of S$773Mil, this...

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Lendlease Commercial Global REIT Debut With One Possible Bad Debt From Tenant Forever 21

Not sure whether it is an inauspicious start for Lendlease REIT IPO but one of its top 10 tenants, Forever 21’s US Headoffice just filed for Chapter 11 bankruptcy protection in US. Luckily it made up only 1.6% of gross rental income but nevertheless, this is still a possible doubtful debt case for 313@Somerset. Hopefully, the rental deposit will be enough to offset any potential default. Top 10 Tenants For Lendlease Commercial Global REIT IPO results are informally out although CDP account has not reflected it, one can check their bank account for the refund of application money to...

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Malaysia To Ask Singapore For Revised Water Deal Again- The Beanstalks Were Burnt Under The Cauldron And The Beans In The Cauldron Wailed

This is really bad for Singapore. The Malaysian government is coming after Singapore again. Mahathir is saying that as the economy of Singapore is well developed, we should pay more. A fresh proposal on revised water rates is being tabled again. But Mahathir has conveniently missed out the main essence again, that is, contractual terms needs to be respected and has nothing to do with being rich or poor. The hustling continues. The 1962 water agreement (1961 there was another one which had expired) is not just about water. It is more than that. It involves the sovereignty of...

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Accompanying a king is just like accompanying a tiger- 伴君如伴虎

As part of the life of a working employee, one must always serve the call of his or her CEO at all times. Sometimes, when the CEO is in good mood, the boss will throw in a bone or two along with compliments on how value adding you are to him. At other times, when the CEO is in a bad mood, he will grill you with questions to make you feel speechless and look stupid. Not that one likes to be made speechless but those who have been working long enough will know that in Asian context, talking...

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