Ascendas Reit versus AimsAmp Reit

This is just to share our discussion and view for these 2 reits counters:


jeremyowtaip

Hi , I think the private placement will have little effect on the dilution of units in Ascendas REIT (A-REIT) as based on their announcement, the number of new units issued under private placement is only about 6.1% of the total number of existing units. I did an estimation of the theoretical ex-placement price to be around $2.63. The market somehow knows how to price the unit price correctly as it last closed on past Friday also at $2.63.

Based on A-REIT's own announcement on their rationale for the private placement, it was meant to raise funds for acquisition of a UK portfolio of 12 properties which A-REIT thinks will increase long term distributions for unitholders. The funds raised from private placement was also to be used for a built to suit property development, for repayment of some debts, for reducing their gearing, for setting aside some cash for future acquisitions and also to increase trading liquidity of it's units. It seems that A-REIT has good rationale for doing this private placement. I provide a link below for further read on A-REIT's recent private placement.

I also made some comparisons below between A-REIT and AA-REIT which I am currently vested in the latter to see which has been a better performer over the past 9 years. I have been wanting to do this comparison for long time already. Now that you asked me why A-REIT has traded at a higher premium in terms of higher P/NAV ratio than it's peers, I believe there must be good reasons for it being a higher priced investment than other of it's peers. Let us see below.

Over the past 9 years, A-REIT has grown it's revenue at a CAGR of 9.02%. It has grown it's net property income at a CAGR of 8.72%. It has grown it's distributions to unitholders at a CAGR of 9.27%. It has grown it's value of investment properties at a CAGR of 9.63%.

Now, let us take a look at AA-REIT's performance for the past 9 years. AA-REIT has grown it's revenue at a CAGR of 9.7%. It has grown it's net property income at a CAGR of 8.44%. It has grown it's distributions to unitholders at a CAGR of 12.05%. It has grown it's value of investment properties at a CAGR of 9.6%.

Based on the above important comparison metrics, we can see that both REITs are quite similar in their growth performance. Therefore, A-REIT is certainly trading at a higher valuation than AA-REIT even though they are quite comparable in their growth performance over the past 9 years. Probably, investors are paying a higher premium for a larger industrial REIT in A-REIT which has some good amount of overseas exposure in UK and Australia. As for AA-REIT, they only have overseas exposure in one freehold business park property in Australia currently leased to Singtel Optus.

It really depends on individual investor's choice. If one is looking at more diversification across more geographical regions in a larger size industrial REIT, then A-REIT is a potential investment candidate. If the investor does not mind a smaller REIT with less overseas exposure but nevertheless has quite decent performance to it's larger peer and trading slightly cheaper in valuation, AA-REIT is a potential investment candidate.

Do note that my sharing is by no means a complete exhaustive discussion and conclusion on the investment worthiness of both REITs. Nevertheless, it is a starting point on some important comparisons between both REITs.

"Hot stock: Ascendas Reit units down 2.6% after manager prices S$452m placement at S$2.54 per unit" by The Business Times 

https://www.businesstimes.com.sg/companies-markets/hot-stock-ascendas-reit-units-down-26-after-manager-prices-s452m-placement-at-s254

simonloo

Reply to @jeremyowtaip : Good write up. I always wanted to buy Ascendas Reit but wonder what would be a “good” entry price as now. Any advise?

Bobbilipuli

Reply to @jeremyowtaip : Excellent write up! May I also add one thing- "brand equity". Ascendas benefits from its name and visibility all over SG just like Mapletree group. This plus the facts that you set up gives it an edge. Am vested in both and look forward to topping up both at next pull back!

Sporeshare

Reply to @jeremyowtaip : TQ! You are really an experience and wise detail investor! Is always good to hear your view ! Would analyse and make my own judgement!! Have a nice day!

Chip Eng Seng , Sheng Siong & Hong Lai Huat - Uptrend counters

These are the few uptrend counters that I have observed at this moment! The market is gearing towards down side as STI has broken down the 3200 level and is on the verge of re-challenging 3100 level. Breaking down of 3100 level would smell troubles and super bearish as market may kicks into BEAR Mode.

 This is just for sharing and not a call to buy or sell.

 Please do your own due diligence.


 1. Hong Lai Huat - From the chart we can notice that after touching the low of 15 cent, it has managed to stage a strong recovery and surge higher to hit the high of 28 cents . This is rather positive!

 It is now taking a break( 25.5 cents) and may likely re-attempt this recent high of 28 cents. The volume bar with many huge volume transacted indicate that DEMAND is strong. This driving force may likely drive the price higher above 28 to test 30 then 35 with extension to 44 cents.

2. Chip Eng Seng - After being sold down from $1.07 to touch the low of 77 cents, it had managed to stage a strong recovery and rises to hit 87.5 cents. This is rather bullish!

Short term wise, I think it may likely move up to re-attempt this 87.5 cents level after taking a short break(86 cents). Breaking out of 87.5 cents with high volume that may drive the price higher towards 90 then 92 cents.

3. Sheng Siong - After touching the low of 85 cents, it has managed to stage a strong rebound and rises higher to hit the all time high of $1.19. It is now taking a break($1.14) and may likely re-challenge this 1.19 level.

Breaking out of $1.19 with good volume, that may propel to drive the price higher to wards 1.25 and above.


I think is always good to lock in profit especially it has been risen from 85 to 1.19..

Trade/invest base on your own decision.


Hong Lai Huat Group Limited focuses on the property development and agricultural investment activities. The company operates through Agriculture, and Property Development and Real Estate divisions. It engages in the business of agricultural development, cultivation, branding and merchandising, and distribution of cassava under the CAMFARM brand. The company cultivates cassava in approximately 11,000 hectares of land in Cambodia; and produces cassava starch and dry cassava chips. It also invests in and develops commercial and residential properties. The company develops HDB projects, community centers, public schools, shopping malls, private residential properties, apartments, and industrial properties in Singapore; and a freehold mixed development project in Cambodia. The company was formerly known as HLH Group Limited and changed its name to Hong Lai Huat Group Limited in April 2018. Hong Lai Huat Group Limited was founded in 1988 and is based in Singapore.


Chip Eng Seng Corporation Ltd, an investment holding company, engages in the construction, property development and investment, and hospitality businesses primarily in Singapore, Australia, Malaysia, and Maldives. The company operates through Construction, Property Developments, Property Investments, Hospitality, and Corporate and Others segments. The company constructs public housing projects, condominiums, and executive condominiums, as well as industrial and commercial projects; develops residential, commercial, and industrial properties, as well as manages development projects; and provides real estate management and consultancy services. It also leases investment properties, such as shophouses, and commercial and industrial properties; operates hotels and island resort; engages in treasury functions; and invests in marketable securities. In addition, the company acts as general building contractor; manufactures and trades in precast products; and provides general building engineering services. Chip Eng Seng Corporation Ltd was incorporated in 1998 and is headquartered in Singapore.

Sheng Siong Group Ltd., an investment holding company, operates supermarkets in Singapore. The company’s stores offer an assortment of live, fresh, and chilled produce, such as seafood, meat, and vegetables; and packaged, processed, frozen, and/or preserved food products, as well as general merchandise, including toiletries and essential household products. It is also involved in general trading, and wholesale import and export businesses. The company operates approximately 48 supermarkets/grocery stores under the Sheng Siong brand name. Sheng Siong Group Ltd. was founded in 1985 and is headquartered in Singapore.

SingPost

Looks rather bearish from TA point of view!
It has broken down the support at $1.12 and also broken down the $1.10 psychological level.
Looks rather weak and we may see further selling down pressure.

The current price of $1.07 is trading below its SMA lines such as 20,50 , 100 & 200. Likely to see the price continue to head further South!


Short term wise, I think the price may slide down to retest $1.00 level.Breaking down of this level with high volume that may smell troubles and could see it prices continue to fall further towards 92 cents with extension to 79 cents.

Not a call to buy or sell.
Please do your own due diligence.


NAV of 61 cents.
P/b of 1.76.
Trailing EPS of 5.2 cents.
PE of 20.5x.
Dividend of 3.5 cents.
Yield of 3.2%

I think decent yield of 3+%. But not as good as compare to SingTel that is yielding 5.6% at $3.13.


Singapore Post Limited, together with its subsidiaries, provides postal, ecommerce logistics, and retail services in Singapore, the United States, Australia, and internationally. The company operates through four segments: Postal, Logistics, eCommerce, and Property. The Postal segment offers services for collecting, sorting, transporting, and distributing domestic and international mail, as well as sells philatelic products. Its international mail service includes handling of incoming and outgoing international mail. This segment also provides ePost hybrid mail services, which integrate electronic data communication with traditional mail; and agency services and financial services. The Logistics segment offers a range of logistics solutions, including freight, warehousing, domestic and international distribution, and delivery services. Its services include ecommerce logistics, warehousing, fulfilment and distribution, and other value-added services; and parcel delivery, freight forwarding, and self-storage solutions and management services. The eCommerce segment provides front-end ecommerce solutions. The Property segment provides commercial property rental services. The company is also involved in the online sale of luxury products; provision of management and consultancy services to related entities, as well as business mail solutions and distribution of mail, and global sale and marketing services. In addition, it provides electronic platform and recyclable lockers for merchandise distribution, as well as customs brokerage and freight forwarding services; and acts as a trading company and purchases organization for ocean freight services. Further, the company is involved in the courier activities other than national post activities; and provision of freight collections transshipments, logistics management, and aviation services. Singapore Post Limited was founded in 1819 and is headquartered in Singapore.

Ascendas Reit

@jeremyowtaip bro Jeremy, would like to hear your view? Isn't the new placement of 170m share is going to erode the dpu? Current price is trading at p/b 1.24x , Nav 2.07, seems trading at a super premium price level.(i think is expensive)..Yield is below 6%. DPu of 15.9 cents, let says another 5% decrease of dpu that may derive the dpu of 15.1 cents. Would you rather wait for price to go lower towards $2.20 level or lower Or would you be interested to initiate a position at current price level?

CLOSE OF PRIVATE PLACEMENT OF 178,007,000 NEW UNITS (“NEW UNITS”) IN
ASCENDAS REAL ESTATE INVESTMENT TRUST (“ASCENDAS REIT”) AT AN ISSUE PRICE
OF S$2.540 PER NEW UNIT
Capitalised terms used herein, unless otherwise defined, shall have the meaning ascribed to them
in the announcement of Ascendas Real Estate Investment Trust dated 6 September 2018 in relation
to the launch of the proposed private placement (the “Announcement”).
1. Introduction
Further to the Announcement in relation to the private placement of 178,007,000 New Units
at an issue price of between S$2.528 and S$2.606 per New Unit (the “Private Placement”),
Ascendas Funds Management (S) Limited, in its capacity as manager of Ascendas Reit (the
“Manager”), is pleased to announce that DBS Bank Ltd. (“DBS”) and J.P. Morgan (S.E.A.)
Limited (“JPM”, and together with DBS, the “Joint Lead Managers and Underwriters”), in
consultation with the Manager, have closed the book of orders for the Private Placement.
The Private Placement was approximately 2.2 times covered and drew strong demand from
new and existing institutional, accredited and other investors.
2. Issue Price

The issue price has been fixed at S$2.540 per New Unit (the “Issue Price”), as agreed
between the Manager and the Joint Lead Managers and Underwriters, following an
accelerated book-building process.
The Issue Price of S$2.540 per New Unit represents a discount of:
(i) (for illustrative purposes only) 3.50% to the adjusted volume weighted average ..

price1
 (“VWAP”) of S$2.6322 per Unit; and
(ii) 6.09% to the VWAP of S$2.7047 per Unit for trades in the Units done on Singapore
Exchange Securities Trading Limited (the “SGX-ST”) for the full Market Day2
 on 6
September 2018 (being the Market Day on which the Placement Agreement was
signed).
The gross proceeds from the Private Placement amounted to approximately S$452.1
million.
The Issue Price of S$2.540 per New Unit represents a 25.1% premium to the adjusted net
asset value per Unit3
 (based on Ascendas Reit’s unaudited financial results for the financial
period from 1 April 2018 to 30 June 2018).
3. Use of Proceeds
Subject to relevant laws and regulations, the Manager intends to use the gross proceeds of
approximately S$452.1 million from the Private Placement in the following manner:
(i) approximately S$250.0 million4
 (which is equivalent to 55.3% of the gross proceeds
of the Private Placement) to partially fund the acquisition of a second UK logistics
portfolio5
 (the “Proposed UK Acquisition”) and the associated costs, subject to
completion of negotiations with the vendor and satisfactory due diligence6
;

(ii) approximately S$109.0 million (which is equivalent to 24.1% of the gross proceeds
of the Private Placement) to partially fund the development of a build-to-suit facility
located in Singapore (the “Proposed Singapore Development”), subject to
completion of negotiations with the vendor and satisfactory due diligence7
;
(iii) approximately S$88.9 million (which is equivalent to 19.7% of the gross proceeds
of the Private Placement) to be used for funding debt repayment and future
acquisitions; and
approximately S$4.2 million (which is equivalent to 0.9% of the gross proceeds of
the Private Placement) to pay the estimated fees and expenses, including
professional fees and expenses, incurred or to be incurred by Ascendas Reit in
connection with the Private Placement,
with the balance of the gross proceeds of the Private Placement, if any, to be used for
general corporate and/or working capital purposes.
Notwithstanding its current intention, in the event that the Private Placement is completed
but the Proposed UK Acquisition and/or the Proposed Singapore Development does not
proceed for whatever reason, the Manager may, subject to relevant laws and regulations,
use the net proceeds from the Private Placement at its absolute discretion for other
purposes, including, without limitation, to repay existing indebtedness and fund capital
expenditures.
Pending the deployment of the net proceeds from the Private Placement, the net proceeds
may, subject to relevant laws and regulations, be deposited with banks and/or financial
institutions or used to repay outstanding borrowings or for any other purpose on a shortterm
basis as the Manager may, in its absolute discretion, deem fit.
The Manager will make periodic announcements on the utilisation of the net proceeds of the
Private Placement via SGXNET as and when such funds are materially utilised and whether
such a use is in accordance with the stated use and in accordance with the percentage
allocated. Where there is any material deviation from the stated use of proceeds, the
Manager will announce the reasons for such deviation.


Listing of, Dealing in and Quotation of the New Units
The trading of the New Units on the SGX-ST pursuant to the Private Placement is currently
expected to commence at 9.00 a.m. on 18 September 2018.
The Manager will make a formal application to the SGX-ST for the listing of, dealing in, and
quotation of, the New Units on the Main Board of the SGX-ST. An appropriate
announcement will be made upon the receipt of such in-principle approval from the SGXST.
Placement of New Units to DBS’ Treasury Investments Unit (“DBS TI”)
DBS TI has been allocated 9,800,000 New Units under the Private Placement. Ascendas
Land (Singapore) Pte Ltd (the “Sponsor”) is a substantial unitholder of Ascendas Reit. As
of the date of this announcement and based on information available to the Manager,
Temasek Holdings (Private) Limited (“Temasek”) owns 51.0% of the Sponsor. Accordingly,
Temasek, through its interest in the Sponsor, is deemed a substantial unitholder of
Ascendas Reit. DBS is a wholly owned subsidiary of DBS Group Holdings Ltd (“DBSH”) and
based on the latest annual report of DBSH for the financial year ended 31 December 2017,
Temasek had a direct and deemed interest of 29.27% in DBSH as at 1 March 2018.

Downtrend stock counters

These are the few downtrend stock counters that could be seeing further selling down pressure!

Japfa
China Sunsine
DBS

Firstly, we take a look at Japfa.
After hitting the high of about 77 cents, it has succumbed to selling down pressure and continue to trend lower to close 62.5 cents today, this is rather bearish.

Short term wise, I think likely to revisit 60 cents . Breaking down of 60 cents with high volume that would be rather negative and may continue to slide down towards 50 cents level.


Similarly for China Sunsine, after hitting the high of $1.60+, it has since corrected sharply and continued to go down to touch $1.02 today and close at $1.04 . This is rather bearish!

Short term wise, i think it may likely revisit $1.00. Breaking down of $1.00 may likely see it prices heading lower towards 91 cents with extension to 82 cents.

Thirdly, for DBS it has broken down the recent low of $25.00 and continue to slide further down towards $24.41 today and close at $24.58 level. Looks rather negative and may likely continue to head lower to retest $24 with extension to $23.24 level.

Not a call to sell or buy.

Please do your own due diligence.

Singapore Saving Bond offer for October and Nov

Nov rate is out!
Looks attractive!
First year 1.8%, average for 10 years 2.48%.

Closing date of application : 26 Oct 2018.
It is now available for applying .

Applicant may apply via Internet banking from the 3 local banks such as DBS,Uob & OCBC .

Closing date of application is on 25th September 9pm.

 First year interest is 1.74% & 10 year interest is about 2.42%. You may refer to the table below ;

 Each Savings Bond has a term of 10 years and pays interest every 6 months. Savings Bonds cannot be traded like conventional bonds or shares. Interest income is exempt from tax. Only individuals above 18 years old can apply.

 Savings Bonds are fully backed by the Singapore Government. And because the bonds can always be redeemed for the full amount invested, investors are protected against capital losses when interest rates change.

 This makes them one of the safest possible investments for individuals to hold.

 Save up to 10 years, and earn interest that “steps up” or increases over time. Hold your Savings Bond for the full 10 years and receive an average interest per year that matches the return from 10-year Singapore Government Securities yields, which has generally been between 2%-3%. Flexible : Or, choose to exit your investment in any given month, with no penalties.

There is no need to decide on a specific investment period at the start.

Before you Apply: You will need: A bank account with DBS/POSB, OCBC or UOB. Visit any of the three local banks’ branches in Singapore to open a bank account.

 An individual CDP Securities account linked to any of your bank accounts through direct crediting service (DCS). CDP is the custodian for Savings Bonds and will process applications, interest payments and redemptions. Visit CDP's webpage for information on opening your CDP Securities account.

 $2 transaction fee A non-refundable transaction fee will be charged by the bank for each application request.

After you have Apply: MAS will allot the new Savings Bond among applicants on the 3rd last business day of the month (called the "Allotment Day")You will receive the first interest payment 6 months after the bond is issued. Interest will be automatically paid into the bank account that is linked to your CDP account.

 The application results will be available on the Announcements page after 3.00pm on Allotment Day. Should the total amount of applications exceed the amount on offer in a particular month, you may not get the full amount you applied for (why not?). The excess cash will be refunded to you by the end of the 2nd last business day of the month.

Savings Bonds will be issued on the 1st business day of the following month. You will be notified by CDP via mail of the amount of Savings Bonds allotted to you. You can also check your holdings online through the CDP Internet service or by calling CDP at 6535-7511.

 Received your interest : You will receive the first interest payment 6 months after the bond is issued. Interest will be automatically paid into the bank account that is linked to your CDP account. Interest will be paid every six months after that, on the 1st business day of the month. The interest payments will be reflected in your CDP statements. When your bond matures Each Savings Bond has a term of ten years. At the end of ten years, your principal and the last interest payment will be automatically credited to your DCS bank account.

You do not need to take any action, and the $2 transaction fee is not applicable in this instance. Redeeming early You can redeem your Savings Bonds in any given month before the bond matures, with no penalty for exiting your investment early. To redeem your bond: Submit your redemption requests through the DBS/POSB, OCBC or UOB ATMs, or Internet Banking portals. Redeem in multiples of $500 up to the amount you have invested for each bond. You can redeem more than one bond per month. A $2 transaction fee will apply for each redemption request. Please note that you will not be able to amend or cancel submitted redemption requests.

The redemption period opens at 6pm on the 1st business day of each month and closes at 9pm on the 4th last business day of the month. Redemption proceeds will be paid by the end of the 2nd business day of the following month. Will I receive any interest?  Savings Bonds pay interest every 6 months.

If you redeem your bond when there is a scheduled interest payment, you will receive the scheduled interest together with your redemption amount. If you redeem before the scheduled interest is paid, you will receive a pro-rated amount, called the accrued interest, which is the interest you have earned but have not been paid.