M Reits Version 7, Malaysia Real Estate Investment
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 Feb 13 2020, 09:33 AM
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#1
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All Stars
12,279 posts Joined: Oct 2010 
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QUOTE(Havoc Knightmare @ Feb 12 2020, 07:45 PM) https://www.theedgemarkets.com/article/bank...poses-new-risks Al Aqar's DPU seems to be dropping quite rapidly across the last few quarters?It's in the news, I rushed to buy Al Aqar after the lunch session opened.  What attracts you to it? |
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Feb 13 2020, 10:38 AM
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#2
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All Stars
12,279 posts Joined: Oct 2010
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QUOTE(Havoc Knightmare @ Feb 13 2020, 10:20 AM) I suspect the data that you referred to might be distorted due to them moving from a semi-annual distribution to quarterly distribution in 2018? In any case, the DPU did drop somewhat (but not massively) in 2018, since they were forced to refinance their entire debt at the worst possible time in 2018, when global interest rates and bond yields were at the peak. Prior to that, they last refinanced their debt in 2013 when interest rates were still quite low thanks to the massive QE by the Fed. In terms of revenue income and NPI, their performance has been quite flattish/boring. Their rental contracts are long term with some annual rental escalation, so revenue-wise they are not too different from Parkway Life. It seems to be volatility on their costs, which includes the interest costs that caused the volaility in DPU. Fortunately, they only refinanced their debt for 3 years in 2018, so they are due to refinance it mid of 2021 and interest rates today have moved sharply lower since 2018. We should see a nice one-off DPU bump in 3Q 2021. It's not an exciting investment, but I see it as a 'safe haven' in the M-REIT space. I am betting that some fund manager out there will realize this too, and buy in eventually.  5116 ALAQAR AL-AQAR HEALTHCARE REIT Quarterly rpt on consolidated results for the financial period ended 31/12/2018 Quarter: 4th Quarter Financial Year End: 31/12/2018 Report Status: Audited Submitted By: Current Year Quarter Preceding Year Corresponding Quarter Current Year to Date Preceding Year Corresponding Period 31/12/2018 31/12/2017 31/12/2018 31/12/2017 RM '000 RM '000 RM '000 RM '000 1 Revenue 25,896 24,777 102,649 99,648 2 Profit/Loss Before Tax 44,965 38,879 92,292 86,154 3 Profit/Loss After Tax and Minority Interest 44,047 37,979 91,374 84,645 4 Net Profit/Loss For The Period 44,047 37,979 91,374 84,645 5 Basic Earnings/Loss Per Shares (sen) 6.04 5.21 12.54 11.62 6 Dividend Per Share (sen) 1.93 0.00 9.58 7.55 Quarterly rpt on consolidated results for the financial period ended 30/09/2019 Quarter: 3rd Quarter Financial Year End: 31/12/2019 Report Status: Unaudited Submitted By: Current Year Quarter Preceding Year Corresponding Quarter Current Year to Date Preceding Year Corresponding Period 30/09/2019 30/09/2018 30/09/2019 30/09/2018 RM '000 RM '000 RM '000 RM '000 1 Revenue 26,718 25,623 79,432 76,753 2 Profit/Loss Before Tax 16,128 15,140 47,314 47,327 3 Profit/Loss After Tax and Minority Interest 16,128 15,140 47,314 47,327 4 Net Profit/Loss For The Period 16,128 15,140 47,314 47,327 5 Basic Earnings/Loss Per Shares (sen) 2.19 2.08 6.43 6.50 6 Dividend Per Share (sen) 1.86 1.95 5.84 7.65 2018 was a good year. But the last few quarters to 3QTR, DOU dropped from 7.65 to 5.84. That's a 24% drop! Not too sure WHY since the net earnings did not drop? |
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Feb 13 2020, 11:23 AM
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#3
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All Stars
12,279 posts Joined: Oct 2010
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QUOTE(Havoc Knightmare @ Feb 13 2020, 11:12 AM) I believe the number is distorted due to the final semi annual dividend being paid in early 2018. There's not been any significant change in earnings as you mentioned. So maybe a better reflection is the average 2017 and 2018 earnings which is 9.58 + 7.55 = 8.56? |
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Feb 14 2020, 09:20 AM
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#4
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All Stars
12,279 posts Joined: Oct 2010
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QUOTE(cherroy @ Feb 14 2020, 09:05 AM) For reit, you look at realised income figure, not earning/profit figure. I thought the DPU is derived from profits. Is it purely from NPI ?As profit figure is easily distorted by non-cash items like revaluation as well as recently many do include defered taxation due to RPGT. The income realised is pretty stable across the years and DPU for whole year is always at the region for 7.7x cents. Last time, it was half yearly DPU, only recent years change to quarterly. Hope this info helps. Cheers. QUOTE Distributable Income Net income subject to certain adjustments including adding back depreciation and amortization, future income tax expenses and excluding any gains or losses on the disposition of any asset, future income tax benefit and any other adjustments as determined. QUOTE Net Property Income (NPI) A metric used to determine a property portfolio’s profitability and financial health, less its operating and recurring expenses. Net Property Income (NPI) = Gross Revenue of a Property – Property Related Expenses (e.g. building maintenance) Yeah. Looks like it. Whats the projected DPU? Is it at around 7.8 cents? That's about 5.6% yield. Bit low that This post has been edited by prophetjul: Feb 14 2020, 09:29 AM |
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Feb 14 2020, 09:44 AM
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#5
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All Stars
12,279 posts Joined: Oct 2010
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QUOTE(cherroy @ Feb 14 2020, 09:33 AM) Profit figure does include surplus of revaluation property (or profit become negative due to reduction in valuation), which reit is required to do for every few years. DPU come from realised income, not profit. A reit can report 100 million of profit due to surplus in revaluation, but the reit doesn't have any cash to distribute the profit. So reit can only distribute realised income they made.  |
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Feb 14 2020, 10:12 AM
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#6
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All Stars
12,279 posts Joined: Oct 2010
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QUOTE(cherroy @ Feb 14 2020, 09:53 AM) Should be roughly the same at 2019, 7.75 cents. That's true. All in context. 5.6% is considered high at current interest rate environment. Mind that BNM is expected to cut OPR further later this year. Even Fed is widely expected to have a cut this year. Current OPR 2.75% vs 5.6% (net 5.2~5.3%), a 3% difference is considered "high". Parkway, KDC only carry 3.x% currently, it is very difficult to find reit (be it Mreit or Sreit) that is expected to have stable DPU going forwards and has more than 4.x% yield. |
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