Wilmar International

Wilmar - touch $3.26 again. Looks rather bullish! Breaking out with ease may sail smoothly towards $3.30.

MACD is rising that may likely provide further indication that the share price may likely continue to trend higher.

Price is hovering above the SMA lines. High chance for a nice breaking out moment that may take the price higher to 3.30 and $3.40 and above.

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




Wilmar Intl - NAV $3.304, Rolling EPS 0.306, PE 13.721. Final dividend of 7 cents for FY 2017.

Together with Interim dividend of 3 cents. Total dividend is 10 cents. Yield is 3.2% at $3.12 per share. The recent share buying back by company director of 2.44m share at $3.103 per share & 79300 share at $3.18 per share may likely be a boost of confidence.. I have jeep small lots at $3.12 today.


.I am buying for the future growth and may be the listing of their China ipo.. dyodd. Reply to @Sporeshare : Ah.....This is the golden big question! If Wilmar is really pushing for an IPO of their China operations in Shanghai exchange, I think can look at other similar commodity giants that are already listed in Shanghai exchange to see where are they trading now in their price to earnings multiple. That will give us a good gauge what types of multiples we are potentially looking at. Surely, we cannot expect Wilmar to list their China operations at too low a gap from their peer competitors on Shanghai exchange. If that is the case, why still push for IPO listing if the valuation it would fetch is not attractive at all? If want to unlock value by the IPO, might as well unlock it well.

 I attached an article from TheEdgeSingapore which an analyst pegs a target price of $4.10 based on an attractive valuation now, strong crushing margins so far in FY18 and the anticipated listing of its China unit. You can read through the article to see the rationale put forth by the analyst. In any case, we are not trying to be precise in forecasting our target price.

 The analyst puts forth a possible listing of the China unit at up to 23 P/E ratio on the Shanghai exchange. Based on good common sense and my previous sharing, Wilmar's share price definitely has all the good catalysts as we can see currently going for it to reach a higher price level. My previous estimated fair price of $3.18 is based on a worst case scenario. Unless we think Wilmar will eventually fail in all accounts of the prospected catalysts in having weaker overall performance this year and anticipated listing of it's China unit falls through, then worst case scenario may pan out. Thus, the downside as I can see on probability terms is low while upside has high probability of happening. Therefore, if you ask me, is $4 you quoted likely to reach in future? My answer is even if not reaching $4, I think the probability of the share price rising higher from current level in view of all these potential future catalysts is surely there. How about a $3.60 price in future based on my "anyhow" guess? I think that will be already at least a good perk of 11.5% share price gain if it really happens by this year end. $4.10 will be even more "shiok" with a potential return of 26.9% if it really happens within one year's time based on the analyst's target price in this article by

TheEdgeSingapore! I think it is a case of making either more or lesser returns from this bet here on Wilmar. As long as one does not chase at higher price if it should chiong but instead has already accumulated cheap in advance, one should be falling into the case of making more or lesser returns on this bet hopefully within one year's time frame. https://www.theedgesingapore.com/wilmar-kept-add-valuations-strong-crushing-margins-and-upcoming-listing-china-unit Wilmar International. The overall feel I have of this large agricultural international group is that it already has extensive and deep degree of reach in it's agricultural and related businesses in terms of many geographical regions they are in (about 50 countries as reported on their website with about 500 manufacturing plants worldwide) and also the entire value chain they are serving from upstream plantation and harvesting to mid stream processing and refining to downstream distribution and sales of their final products to consumers. On a one decade time frame, Wilmar International has compounded it's revenues at a CAGR of 10.3% which is respectable and not surprising considering how significant this group has grown over the years. It's operating income has compounded at a CAGR of 8.1% over the past decade. It's net income has compounded at a CAGR of 7.7% over the past decade. It's EPS has compounded at a CAGR of 4.1% over the past decade. Again, this looks like a moderate to slow grower over the past decade just slightly better than SATS that we looked at previously in terms of the growth in it's profitability. If we look at their past 5 years trend for the revenue, operating income, net income and EPS, there was a dip in all these metrics after FY12 onwards which only recovered in their FY17 results near to FY12 levels.

 qUOTE : I checked up the palm oil historical prices and indeed it confirmed my thinking that this dip over the past 5 years which only recovered recently was probably correlated to the drop in palm oil price over the past 5 years. Currently, palm oil price has recovered from the lows but still it is now only two-thirds of the last peak price reached in 2012. The big question is whether the palm oil price will continue to recover towards the last peak price reached in 2012 going forward or continue to hold around current price and do a ding-dong in price, sometimes up and sometimes down but no clear up direction for the next few years? This I do not know as I think only insiders of the palm oil industry will know the dynamic factors of global supply and demand affecting palm oil prices. I consider this as outside my circle of competence. But looking at palm oil historical prices, it sure looked quite volatile to me and hard to grasp.{ jeremyowtaip} As such, the various trend on their returns on assets (ROA), returns on equity (ROE) and returns on invested capital have also dipped over the past 5 years and have almost recovered in the latest set of FY17 results to close to same returns as FY12. However, the various returns are still single digits returns in %. For example in FY17, ROA is now around 3% while ROE is around 7.6%. If we stretch further backwards to compare their current returns against one decade ago which the various returns were higher in FY07 of ROA around 6.7% while ROE was around 13.8%, we can clearly see that Wilmar is now not a high return beast as it used to be a decade ago. It seems that it is not easy to attain the same returns as before anymore now that Wilmar has outgrown so much that at it's current size it cannot generate the same returns on assets and shareholder equity as before. Now again, the big question is how will the various returns going forward in future years be like? Will it remain around same level as now or become lower? Size is one thing which makes it increasingly difficult to generate the same level of returns. What if they can grow their revenue and profits further in future years should palm oil prices recover? Maybe there could be a chance to improve their returns though going back to double digits returns likely will be difficult.

This would mean they have to increase their current net profits by another approximately 120% at current size of total assets for example to go back to previous decade ago record of ROA. A jump in 120% increase in net profits at current level of USD 1.22 billion for WIlmar next year based on core businesses and not through some non-recurring disposal of assets? One must be joking to ask the dog to jump over the high wall! The financial leverage of Wilmar has been steady over the years managing their debts level and balance sheet well. Cash flows wise though can be volatile seems to still generate free cash flows at least enough to pay a dividends which has grown over the past decade. Their CAGR for EPS over the past 5 years has been about 0% even though 10 years CAGR was 4.1%. I will factor in a best case scenario and a worst case scenario in estimating their fare share price value taking into account all the above mentioned details of this comment. If we make a best case scenario of Wilmar continuing to grow it's current EPS at CAGR of 4.1% going forward, then using my method of estimation, their fare share price will be $4.25. However, if we make a worst case scenario of a CAGR of 2% on their EPS going forward for next business cycle (7 years), then their fair share price will be $3.18. This is mind-blowing! It all depends on the performance of Wilmar going forward. If they can parallel their historical compounded growth rates on their EPS, then it will be a bonus to buy their shares now at cheap cheap share price! However, should they grow at a lower forward CAGR about somewhere half in % terms on their EPS, then we are exactly getting Wilmar now at fair value $3.18 and it will not be cheap now to buy! This really requires an investor's forward opinion on how Wilmar will perform for next 7 years cycle to decide whether to put in his or her stake at current price. Will this be a value buy or value trap? Hmm Wilmar International has since diversified their commodity businesses over the years into business segments including tropical oils, oilseeds and grains, sugar and biofuels and other investment businesses. This horizontal diversification and vertical integration tapping at all levels of the value chain has allowed Wilmar to grow to it's current humongous size despite being in a general low profit margin agricultural commodity businesses. I forgot to mention another important piece of bright spot for Wilmar! I read up in it's most recent financial report that they are considering looking at an IPO listing of their China rice, flour and related consumer products operations in China.


http://sbr.com.sg/agribusiness/news/wilmar-eyes-china-expansion But things are still in the early stage of assessment. If that were to happen, imagine the craze of investors rushing in for this potential spin-off of their China businesses which will unlock value for shareholders. Then, buying at current share price is now cheap if we factor in this potential unlocking of value from such a future proposition which will increase their profits and returns by some substantial jump if that were to happen some time down the road. It may happen as early as 2019 based on a write-up by Singapore Business Review. Hmm....I am now starting to get somewhat interested after knowing this. Some info on Shree Renuka Sugars I found out. It is the largest raw sugar producer in India and Brazil. As what the others have pointed out, the management was too aggressive in their overseas expansion bet in South America which didn't go well chalking up huge debts. This is because after year 2012, the sugar prices dropped from their peak reached and also correlated to Shree Renuka's operating losses from 2013 to now as sugar prices remain lower and now only recovered to two-third of the peak price reached in 2012. Wilmar has this chance to acquire a controlling stake in Shree Renuka Sugars because the latter chalked up so much debts from their aggressive expansion to South America market which didn't pan out well. Thus, during this current debt restructuring exercise, Wilmar can take this opportunity to acquire a controlling stake in the equity of India and Brazil largest raw sugar producer Shree Renuka Sugars. quote :I will need to examine the financial strength of Wilmar whether they can take on this acquisition without risking themselves too much. But, the offer to acquire a controlling stake in Shree Renuka Sugars by itself sounds to be a wonderful move. If sugar prices should continue to recover to previous peaks in 2012 and earlier, Shree Renuka Sugars may be able to return to better profitability again. The return on invested capital for Shree Renuka Sugars before they went downhill in 2013 are still good. If Wilmar after acquiring Shree Renuka Sugars can turnaround this largest sugar producer in India and Brazil successfully, it will be very good for Wilmar to further expand their sugar business significantly.

PS: Shall investigate whether Wilmar is strong enough to take on this acquisition without stressing their balance sheet too much. Get back to you again. I did an estimation on the required amount for Wilmar to make the acquisition of shares in Shree Renuka Sugars based on regulations of Securities and Exchange Board of India after Wilmar converted it's convertible preference shares to common equity shares and triggered the regulations of the exchange to make an offer to acquire up to 26% of the emerging share capital of Shree Renuka Sugars. The cash outlay needed to acquire up to 26% of the emerging share capital of Shree Renuka Sugars is approximately USD 124 million. Wilmar has about USD 2.96 billion in cash and equivalents plus other bank deposits. It's current ratio stands at around 1.15 based on FY17 financial report. This acquisition requires very small cash outlay for Wilmar as compared to the cash and bank deposits it now has. However, after the acquisition of a controlling stake in Shree Renuka Sugars has been completed, I am not sure how much remaining debts of Shree Renuka Sugars Wilmar will carry as some of the debts owed to the lenders have been converted to equity in Shree Renuka Sugars. I checked up Shree Renuka Sugars balance sheet as at Sep 17. They carried a total of about USD 1 billion worth of total liabilties on their balance sheet. With some of the borrowings of Shree Renuka Sugars converted to equity, the total liabilities should be lesser than this figure. Thus, with Wilmar's existing USD 2.96 billion in cash and equivalents plus bank deposits and if we consider Wilmar's current assets of total about USD 22.6 billion, Wilmar definitely has much more than enough resources to cover the liabilities of Shree Renuka Sugars even after Wilmar completes this acquisition of a controlling stake in it.


 There is no concern at all in acquiring a controlling stake in Shree Renuka Sugars for Wilmar. Instead, Wilmar would have gotten this India and Brazil largest raw sugar producer under it's wings.(jeremyowtaip) But having said that, those few stocks we discussed about like Wilmar and Thai Beverage are good stocks to hold for the longer term as there are future potential catalysts in them. The potential listing of China operations for Wilmar which will unlock value for shareholders and may re-rate share price higher. The future long term contributions to earnings and returns from the new acquisitions for Thai Beverage will outpace the cost of their initial investment. The market position of Thai Beverage has strengthened as a leader in this Southeast Asia region with these acquisitions. The fair share price of Thai Beverage I cannot determine at the moment. But, in future the direction of the share price can only go one way which is up as the new acquisitions start to increase the overall profitability and cash flows further while the debts get slowly reduced over time. For SATS, it is a steady slow grower. Just need a bear market to grab it cheap at fair value or lower than fair value and see the price will bounce back and trade higher than fair value due to so many favourables surrounding it which may continue for a very long number of years ahead.

OCBC , DBS & UOB

With Dow overnight close 200+ points, bank counter may see further upwards move. All 3 local bank counters are having similar chart patters. Looks rather bullish, and may likely continue to trend higher.

OCBC - looks like high chance of taking out the recent high of $13.78 and trend higher towards $14.00 and above.

Oversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, other parts of the Asia Pacific, and internationally. The company's Global Consumer/Private Banking segment provides a range of products and services to individuals, including checking accounts, and savings and fixed deposits; consumer loans, such as housing and other personal loans; credit cards; wealth management products consisting of unit trusts, bancassurance products, and structured deposits; and brokerage services. This segment also offers private banking services, including investment advice and portfolio management, estate and trust planning, and wealth structuring services. Its Global Corporate/Investment Banking segment provides project financing, overdrafts, trade financing, and deposit accounts; fee-based services, such as cash management and custodian services; and investment banking services, including syndicated loans and advisory services, corporate finance services for initial public offerings, secondary fund-raising, and takeovers and mergers, as well as customized and structured equity-linked financing to institutional customers, such as corporates, public sector, and small and medium enterprises. The company's Global Treasury and Markets segment is involved in the foreign exchange activities, money market operations, and fixed income and derivatives trading, as well as provision of structured treasury products and financial solutions. Its OCBC Wing Hang segment offers commercial banking, consumer financing, share brokerage, and insurance services. The company’s Insurance segment provides fund management services, and life and general insurance products. Its Others segment is involved in property and investment holding activities. It operates a network of approximately 600 branches and representative offices in 18 countries and regions. Oversea-Chinese Banking Corporation Limited was founded in 1912 and is based in Singapore.

UOB - looks rather bullish and may likely retest the recent high of $29,67 and trend higher above $30.

United Overseas Bank Limited provides financial products and services. The company’s Group Retail segment provides deposits, insurance, card, wealth management, investment, and loan and trade financing products for personal and small enterprise customers. Its Group Wholesale Banking segment provides financing, trade, cash management, capital markets solutions, and advisory and treasury products and services. The company’s Global Markets segment offers foreign exchange, interest rate, credit, commodities, equities, and structured investment products; and manages funds and liquidity. Its Other segment provides investment management, property, and insurance services. The company has a network of approximately 500 offices in 19 countries and territories in the Asia Pacific, Europe, and North America. The company was formerly known as United Chinese Bank and changed its name to United Overseas Bank Limited in 1965. United Overseas Bank Limited was founded in 1935 and is headquartered in Singapore.

DBS - uptrend intact. Looks like it may likely recapture $30 and fly higher towards 31.00.Do take note of the XD date. 

Not a call to buy or sell. Please do your own due diligence. Trade/invest base on your own decision.

DBS Group Holdings Ltd provides various commercial banking and financial services in Singapore, Hong Kong, rest of Greater China, South and Southeast Asia, and internationally. It operates through Consumer Banking/Wealth Management, Institutional Banking, Treasury Markets, and Others segments. The Consumer Banking/Wealth Management segment offers banking and related financial services, including current and savings accounts, fixed deposits, loans and home finance, cards, payments, investment, and insurance products. The Institutional Banking segment provides financial services and products, such as short-term working capital financing and specialized lending; cash management, trade finance, and securities and fiduciary services; treasury and markets products; and corporate finance and advisory banking, as well as capital markets solutions. This segment serves institutional clients comprising bank and non-bank financial institutions, government-linked companies, large corporates, and small and medium-sized businesses. The Treasury Markets segment is involved in structuring, market-making, and trading across a range of treasury products. The Others segment offers Islamic banking services. The company operates approximately 280 branches across 18 markets. DBS Group Holdings Ltd was incorporated in 1968 and is headquartered in Singapore.

Venture

27 April - Unfortunately, Dow didn't help to safe this counter from sliding further. It is now trading near it's support level at 21 level which is quite close to it's 200 days Moving Average.

It seems to have bounce-off and staying above this 200MA. Breaking down would be super bearish!

Short term wise, it is rather oversold and may likely see a technical rebound . 20 days MA has crossed below 50 days MA, Which indicates that it is now on a downtrend mode.

Not a call to buy or sell.
Dyodd

Venture - looks like today we may likely see strong rebound after being sold down drastically for the past few days from $26.98 to a low of 19.84 before closing higher at $22.20. What an exciting roller coaster ride for both the Investor and trader . With Dow overnight closing positively due to better earnings, this counter may likely get lifted.

quote : Dow surges more than 200 points, Facebook and AMD jump after crushing earnings Facebook shares surged 9.1 percent after the company posted better-than-expected earnings and revenue for the first quarter. Advanced Micro Devices also posted earnings that topped expectations, sending its stock up about 14 percent. The strong quarterly numbers also lifted the S&P 500 and Nasdaq by 1 percent and 1.6 percent, respectively.( cnbc.com)

Yesterday, it has managed to bounce-off from the 200 days moving average and rises to close higher at $22.20. This is a short term reaction whereby Bull is taking control of the Bear.

Immediate resistance will be at $24.00 or $24.38 which is coincide with 100 days moving average. Breaking out of this level with great volume, that may drive the price higher towards testing the 50 days moving average at $27.00/

 not a call to buy or sell. please do your own due diligence.

Venture Corporation Limited, together with its subsidiaries, provides technology services, products, and solutions in the Asia Pacific. The company operates through Electronics Services Provider, Retail Store Solutions and Industrial, and Components Technology segments. It offers manufacturing, product design and development, engineering, and supply-chain management services to the electronics industry. The company also designs, manufactures, assembles, distributes, and trades in electronic, mechanical, and computer related products and peripherals; manufactures and sells terminal units; develops and markets color imaging products for label printing; designs, integrates, and trades in electronic security systems; and develops and supports information systems. In addition, it engages in the provision of manufacture, design, engineering, customization, and logistics and repair services; manufacture, design, fabrication, stamping and injection, metal punching, and spraying of industrial metal parts, tools, and dies; and design, customization, and marketing of tool-making and precision engineering solutions. Further, the company manufactures plastic injection molds and moldings with secondary processes and subassembly; and provides manufacturing services to electronics equipment manufacturers, as well as offers management services. Additionally, it imports and exports electronic parts, components, equipment, devices, and instruments. Venture Corporation Limited was founded in 1984 and is headquartered in Singapore.

StarHill Global Reit

3rd quarter result is out . DPU is down 7.6% as compare to last year . DPU of 1.09 cents is lowered than 1.18 cents.

HIGHLIGHTS
• Completion of asset redevelopment works at Lot 10 and tenant renovations at China Property

• Handover of Plaza Arcade unit to anchor tenant UNIQLO

SINGAPORE, 26 April 2018 – YTL Starhill Global REIT Management Limited, the manager of SGREIT, is pleased to announce the results for the three months ended 31 March 2018 (3Q FY17/18).

 Revenue for SGREIT group in 3Q FY17/18 was S$51.7 million, a decrease of 3.0% over the previous corresponding period of three months ended 31 March 2017 (3Q FY16/17).

Net Property Income (NPI) was S$40.3 million, a decrease of 2.3% over 3Q FY16/17. The decrease in gross revenue was mainly due to weaker contributions from the office portfolio, disruption of income from asset redevelopment works at Plaza Arcade in Perth and lower revenue at Myer Centre Adelaide.

The decrease in NPI for SGREIT group was largely in line with the lower revenue, partially offset by lower expenses mainly for the China Property. In Perth, Plaza Arcade’s anchor tenant UNIQLO has commenced renovation works, with targeted completion in 2H 2018.

The external works to create a new entry point to Lot 10 in Kuala Lumpur has been completed, providing improved accessibility to the mall from the new MRT station exit on the ground floor.

Renovations by tenant Markor International Home Furnishings Co. Ltd. at the China Property have also been completed and the tenant has officiated its opening in March 2018. Income to be distributed to Unitholders for 3Q FY17/18 decreased by 7.6% over the previous corresponding period to S$23.8 million, mainly due to lower NPI and higher withholding taxes.

Distribution Per Unit (DPU) for 3Q FY17/18 was 1.09 cents, representing an annualised distribution yield of 6.05%1. Unitholders can expect to receive their 3Q FY17/18 DPU on 30 May 2018. Book closure date is on 7 May 2018 at 5.00 pm

Review of portfolio performance 

SGREIT’s Singapore portfolio, comprising interests in Wisma Atria and Ngee Ann City on Orchard Road, contributed 62.6% of total revenue, or S$32.4 million in 3Q FY17/18. NPI for 3Q FY17/18 decreased by 2.9% y-o-y to S$25.7 million, mainly due to lower occupancies in Singapore offices and weaker contributions from Wisma Atria Property (Retail). The Singapore office portfolio revenue and NPI declined 10.4% and 12.4% y-o-y respectively in 3Q FY17/18. However, committed office occupancies rose to 90.7% as at 31 March 2018 from 89.4% as at 31 December 2017 and 83.5% as at 30 September 2017.

Singapore retail portfolio continued to sustain high occupancy of 99.1% as at 31 March 2018. Ngee Ann City Property (Retail) maintained full occupancy while Wisma Atria Property (Retail) maintained high committed occupancy of 97.2%. Ngee Ann City Retail revenue and NPI were largely stable on the back of the Toshin master lease.

SGREIT’s Australia portfolio, comprising Myer Centre Adelaide in Adelaide, South Australia, the David Jones Building and adjoining Plaza Arcade in Perth, Western Australia, contributed 21.3% of total revenue, or S$11.0 million in 3Q FY17/18. SGREIT has long-term leases with Myer Pty Ltd and David Jones Limited, contributing approximately 6.9% and 4.7% of its portfolio gross rents respectively as at 31 March 2018. NPI for 3Q FY17/18 was S$6.8 million, 13.8% lower than in 3Q FY16/17 mainly due to Plaza Arcade’s redevelopment works, lower revenue at Myer Centre Adelaide largely due to office vacancies and allowance for rent rebates, as well as the depreciation of the Australian dollar against the Singapore dollar. The redevelopment at Plaza Arcade includes a new façade and the addition of approximately 8,000 square feet or 33% more retail space on the upper floor to cater to anchor tenant UNIQLO. The premise has been handed over to the tenant, who has commenced renovation works with expected completion targeted in 2H 2018. With the completion of the asset redevelopment, Plaza Arcade’s revenue contribution is expected to improve.

SGREIT’s Malaysia portfolio, comprising Starhill Gallery and interest in Lot 10 along Bukit Bintang in Kuala Lumpur, contributed 13.8% of total revenue, or S$7.1 million in 3Q FY17/18. NPI for 3Q FY17/18 was S$6.9 million, 6.3% higher than the previous corresponding period mainly due to the appreciation of the Malaysian ringgit against the Singapore dollar. Lot 10 has completed its internal rejuvenation works and the external works to create a new entrance from the new MRT station exit has also been completed, improving the accessibility of the mall for shoppers and commuters.

The balance of SGREIT’s portfolio, which comprises a property in Chengdu, China and three properties located in central Tokyo, Japan, contributed 2.3% of total revenue, or S$1.2 million in 3Q FY17/18. NPI for 3Q FY17/18 was S$0.9 million, up 144.1% over 3Q FY16/17, mainly due to lower expenses for the China Property, following the conversion of the departmental store model to a single tenancy model. The renovation works by the tenant has been completed and the tenant has officiated its opening in March 2018.

9th Month DPU of  3.46 cent is slightly lowered than 3.74 cent last year.

I think with the Singapore occupancy rate staying at 99.1% looks healthy.
Australia Plaza Arcade’s revenue contribution is expected to improve.
I think 4th Qtr DPU may slightly increase.

Hopefully , Whole year DPU may likely maintain around 4.92 cetns same as last year.
Yield is about 6.8% base on share price of 72 cents.

These are my findings for Starhill Global REIT. Starhill Global REIT as they described themselves on their website is a REIT which currently has a portfolio of 11 properties used primarily for retail and office uses. Their flagship properties are Wisma Atria and Ngee Ann City located in Orchard Road of Singapore. They have grown in their portfolio from their two flagship properties to now total of 11 properties located across KL Malaysia, Chengdu China, Tokyo Japan, Perth and also Adelaide Australia. Thus, they are now diversified into different geographical regions.

For this sharing, I will do a comparison of Starhill Global REIT versus CapitaMall Trust, a very familiar Singapore large retail REIT which is also the first listed REIT in Singapore. Since Starhill Global REIT derives majority of their revenue from retail tenants and less so from office tenants, it is still a reasonable comparison against CapitaMall Trust. I will compare their compounded annual growth rates (CAGRs) in three different important metrics over the past 11 years since 2006 to 2017. These three important metrics are net property income, distributable income and value of investment properties. The exact period of comparison may differ slightly due to different reporting timings of their full year results. Nevertheless, it is still kept to not more than half a year difference in both their period of comparison.

First, we look at the net property income growth. For CapitaMall Trust, it's net property income has grown at a CAGR of 7.42% over the past 11 years from 2006 to 2017. For Starhill Global, it's net property income has grown at a CAGR of 9.2% over a similar period.

Next, we look at the distributable income growth. For CapitaMall Trust, it's distributable income has grown at a CAGR of 8.02% over the past 11 years. For Starhill Global, it's distributable income has grown at a CAGR of 7.2% over a similar period.

We look now to the value of investment properties growth. For CapitaMall Trust, it's value of investment properties has grown at a CAGR of 6.1% over the past 11 years. For Starhill Global, it's value of investment properties has grown at a CAGR of 7.29% over a similar period.

Just to have some perspective on the size of these two retail REITs currently. The value of investment properties held by CapitalMall Trust as of Dec 17 is around $8.77 billion while the value of investment properties held by Starhill Global REIT is around $3.15 billion. We can see that the latter is less than half the size of the former in terms of the value investment properties held in it's portfolio. Thus, we are comparing a much bigger retail REIT player CapitaMall Trust which is focused on a Singapore retail mall market to a smaller global retail REIT player Starhill Global which is diversified across retail mall markets in different geographical regions.

In terms of net property income growth, Starhill Global has delivered close to 2% higher CAGR than CapitaMall Trust over the past 11 years which is significant. In terms of distributable income growth, Starhill Global loses marginally in less than 1% point to CapitaMall Trust in the CAGR of distributable income. Perhaps CapitaMall Trust is slightly more efficient in growing and managing it's cash available for the purpose of distributions despite producing a slightly lower growth in it's profitability as a retail landlord as compared to Starhill Global.

If we look at the growth in value of investment properties, Starhill Global REIT has been growing at a higher compounded annual rate at about 1% higher than CapitaMall Trust. This is not surprising due to the former which is a smaller retail player as compared to the latter with room to grow faster. The larger the investment property asset size a REIT owns, the slower growth it will likely experience as it needs to look to acquire more properties and also properties of larger value quantum as it grows larger in order to match it's previous growth rates. Also, the value of investment properties may fluctuate at times and properties in different geographical regions may be subjected to different valuations depending on the property market conditions affecting property valuations in the different regions and subsequently the growth in value of investment properties. A possible question to ask here is how do the valuations and the growth in valuations of retail mall properties in Singapore compare against that in KL Malaysia, Chengdu China, Tokyo Japan and the two places of Australia that Starhill Global REIT has properties in? Is a diversified strategy in this sense better than a Singapore focused strategy?

Other metrics of comparison such as overall occupancy rate and gearing are about similar for both retail REITs at more than 90% and about 30 plus % respectively. Thus on an overall basis, Starhill Global REIT a geographically diversified retail REIT player compares favourably to CapitaMall Trust a large established retail REIT based in Singapore.

Starhill Global REIT is currently trading at $0.72 and has a $0.91 NAV per unit and a distribution yield of about 5.99%. CapitaMall Trust is currently trading at $1.98 and has NAV per unit of $1.92 and distribution yield of about 5.64%. It seems that Starhill Global REIT is currently trading at a cheaper valuation versus CapitaMall Trust even though both are comparable in terms of their growth performance on net property income, distributable income and value of investment properties over the past 11 years.

Hi Sporeshare, I attached below a link to the Straits Times article which summarises what are the current developments in Starhill Global REIT which caused their overall drop in gross revenue, net property income and DPU for most recent performance.

The reasons given were due to:
1. the effects of straight-line rental adjustments.
2. higher withholding taxes for Malaysia and Australia properties.
3. weaker contributions from offices.
4. disruption of income from ongoing asset redevelopment works at Plaza Arcade in Perth.
5. lower revenue at Myer Centre Adelaide Australia.

The CEO of Starhill Global REIT commented that their Singapore retail portfolio has remained stable while new take-ups for office space were encouraging.

Also, the asset redevelopment works on Plaza Arcade and Lot 10 will likely be completed this first quarter meaning for the rest of this year, these two properties can start to contribute to revenue and net property income etc. again.

The chairman of Starhill Global REIT also made similar comment that earlier initiatives to rejuvenate the portfolio has been timely and the REIT will be in a good position to ride any retail sector upturn.

If we look at the reasons given for the recent few quarters weaker results and the replies by the CEO and Chairman, we should ask a question. Do these guys know what they are doing and are what the various actions they are carrying out currently for this REIT and unitholders make sense to grow the distributions for the long term?

As far as I can observe, some factors were not within their control to be fair to the management. Things like straight line rental adjustments and higher withholding taxes on Malaysia and Australia properties. This maybe one of the thing to look out for when investing in overseas properties. If Singapore has a comparatively lower tax on retail properties, then perhaps a Singapore focused retail property portfolio maybe better. But then again, there maybe certain tailwinds found in overseas retail mall markets which may not be present in Singapore especially if the growth element in retail mall market in our saturated tiny red dot is going to be limited going forward.

The CEO commented recent new office take ups were encouraging. Also, both CEO and Chairman thinks that sacrificing a few quarters of lower net property income and DPU to redevelop their Australian assets at this timely moment will ensure the assets there can capture the ride in retail sector upturn. Thus, I think it is only fair to give the REIT another few more quarters to see whether there is any improvement in their metrics such as gross revenue, net property income, distributable income and DPU. This will tell us whether what the management is doing currently really is of good foresight in terms of future benefits for the unitholders. Next few quarters, there are no more excuses such as asset redevelopment works affecting their performance. Let's see whether their performance picks up from here going forward in order to make a fair opinion on them. As of now, the various reasons given are reasonable in my opinion to explain why their various metrics are performing weaker.

Straits Times article Business section: Starhill Global Reit's DPU down in Q2 

http://www.straitstimes.com/business/starhill-global-reits-dpu-down-in-q2

Sembcorp Marine

Sembcorp Marine:

Key highlights: For the three months to March 31, 2018  Revenue of $1.18 billion. 
Net profit of totalled $5.3 million. 

EPS of 0.25 cents .
A drop if 86% as compared to last year EPS of 1.77 cents ( once-off gain ) .

NAV of 1.157
PE of 220 times (0.25 x 4).

Price seems very high at $2.23 per share.

I think It has overrun ahead of it's fundamental.

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

Secured $476 million in new contracts in 1Q 2018. Singapore, April 25, 2018: Sembcorp Marine posted Group revenue of $1.18 billion for the three months to March 31, 2018. This compares with $746 million in revenue generated in 1Q 2017 (restated for accounting changes on adoption of SFRS (I)). The higher revenue in 1Q 2018 was largely due to higher recognition on delivery of 2 jackup rigs to Borr Drilling and 1 jack-up rig to BOTL during the quarter. Excluding the effects on the adoption of SFRS(I) 15, revenue would have been $858 million, an increase of 15% compared with 1Q 2017.

Turnover for Rigs & Floaters was $1.02 billion in 1Q 2018, compared with $327 million in 1Q 2017 (restated for accounting changes on adoption of SFRS (I)). The higher revenue was related to recognition of the Borr Drilling and BOTL jack-up deliveries as well as higher floaters revenue on recognition of the Johan Castberg project. Offshore Platforms revenue was $62 million in 1Q 2018 compared with $302 million in 1Q 2017 due to completion of existing projects. During the quarter, revenue from the remaining work for the three topside modules for the Culzean platform topsides continued to be booked progressively. Delivery of the topside modules is scheduled for June 2018. Revenue from Repairs & Upgrades totalled $79 million for 1Q 2018 compared with $95 million in 1Q 2017 on fewer ships repaired. A total of 80 ships and other vessels were repaired or upgraded in the first quarter of this year compared with previously.

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