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gd undervalue reit to hold
current price div still over 7%
if u believe in indonesia growth, this is the reit...
Moving up with high volumn, should be able to hit 0.48 today.
It is trading at 0.47 now, seem like it is moving ahead of quarterly dividend announcement in a few weeks time.
Ready for Accretive Acquisition and DPU Jump
Lippo Malls Indonesia Retail Trust’s (LMIR) 2Q gross revenue and distributable income grew 38.3% and 44.3% YoY to S$45.8m and S$17.1m respectively. 1H figures were 50.0% and 49.3% of our previous forecasts.
We are upgrading our FY13F - FY15F following 1) LMIR’s recent bond issuance and imminent asset acquisition, 2) move to control cost of funds and operating expenses and 3) lowly levered balance sheet which may be levered upwards.
We expect the company to acquire about S$300m worth of assets by 1Q FY13 and boost FY13F DPU to 3.52 S cents per unit. LMIR’s share price had corrected from more than 60 S cents to the current level after rights issuance as the company reinitiated its growth ambitions whilst optimizing its balance sheet. We project the price gap to close up following further acquisitions.
2Q gross revenue and net property income were roughly flat QoQ (+/- 1%) as higher occupancy rate (rose 0.2% points to 94.7%) was dragged by weaker Rp vs S$. Financial expenses dipped S$1.6m QoQ to S$2.5m owing to the absence of one-off loan finance fee. There was also a net S$1.3m gain mainly due to unrealized gain on forex forward contracts.
Consequently, PBT rose 9.2% QoQ to S$27.1m. On beginning July 2012, LMIR issued S$200m 3 years notes at 4.88% and S$50m notes at 5.875%. The proceeds, (together with the cash equivalents of S$111m) can be used to fund further acquisitions and the subsequent effective debt/investment properties will be around 21.0%. We reckon that LMIR is likely to acquire assets of about S$300m as the resultant gearing will still be very comfortable. Assuming that the potential targets are capable of generating net property income/asset value of 9%, LMIR’s FY13F distributable income will be around S$76.6m or 3.52 S cents per share. That said, if the acquisition occurs only in 4Q 2012, the distributable income for 3Q FY12 may be lowered by about S$3m due to interest expense.
Setting the Correct Strategy:
LMIR’s Chairman, Mr. Albert Cheok shared with us LMIR’s upcoming moves of generating value for shareholders via:
1) Only acquiring quality yield accretive assets from their sponsor and external parties. Factors such as quality of the assets, upside rental potential and local environment will also be taken into consideration.
2) Keeping the cost of funds (both debt and equity) and operating cost to income low to further increase yield differences. Management also commented that current operating expenses (property operating expenses + administrative expenses) to revenue is about 38% currently and they are striving to lower it to boost profitability.
3) Acquiring a dominant presence in various Indonesian towns to fully profit from the towns’ growth and maintain their presence in the area.
4) Paying out as much distributable income as possible so as to reward shareholders for their confidence and support. The over subscriptions of the recent rights issuance and bond issuance are evidence of investors’ support.
The Chairman is also optimistic about Indonesia’s outlook and cited stable political environment, having various natural resources, rising number of middle class as growth engines. With the funding in place from the recent MTN issuance, LMIR has the flexibility to acquire new assets. Asset enhancement initiatives will also be continued to bring about value and “spark” to the malls.
Upside DPU Ahead:
In view of the upcoming acquisition and tenancy remixing in Pluit Village and Plaza Medan Fair, we are upgrading Lippo’s FY13 DPU to 3.52 S cents and FY15F DPU to 3.74 S cents. FY13F and FY15F dividend yields are estimated to be 8.4% and 8.9% respectively. Maintain Increase Exposure with an intrinsic value of S$0.61.
Source: SIAS
Just cleared all the 0.435, looks like some BBs are pushing it up. Will it hit 0.45? Congrat to those still holding it.
Q2 result was out.
38.3% jump over the corresponding quarter in 2011 primarily due to the full-quarter contribution from Pluit Village and Plaza Medan Fair - two quality retail malls that were acquired in December 2011.
Q2 distribution per unit (“DPU”) of 0.79 cents, books closure date on 13 Aug and payment on 30 Aug.
38.3% jump over the corresponding quarter in 2011 primarily due to the full-quarter contribution from Pluit Village and Plaza Medan Fair - two quality retail malls that were acquired in December 2011.
Q2 distribution per unit (“DPU”) of 0.79 cents, books closure date on 13 Aug and payment on 30 Aug.
for those willing to hold long long term 2 to 4 yrs, this counter is very gd....gd rev, gd dividend (ard 7%), gd connection with indon govt (Lippo family), gd dev plans next few yrs, low gearing....only -ve is rupiah forex but just think if MAS will allow sgd go higher...if yes sgd on par with usd long time ago liao
indonesia seemed to have done well despite the 2008 great recession and euro crisis...
LippoMall is still my top pick at the moment.
http://mystocksinvesting.com/singapore-reits/singapore-reits-comparison-table-for-dividend-investment-2/
| sgnewbie ( Date: 28-Jun-2012 09:41) Posted: |
I sold all d, despite chances of breaking 0.410, but just wan to be safe. Will come back next time if it loses steam again.
hmmm...will sell off all for a small profit if no rally onwards... good day onwards
Wake up... Cheong to 0.405 today...
No matter wat happen, the rally is still on for this counter... :)
sanuks ( Date: 14-Jun-2012 14:19) Posted:
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Is foreigner allow to own property in Indonesia?
Arent you afraid of riot that happen pretty frequent in Indonesia?
Arent you afraid the soft currency from fluctuation like a pendulum?
Arent you afraid of the frequent changes in policy that will affect businesses in Indonesia?
CrazGreed ( Date: 14-Jun-2012 11:58) Posted:
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too quiet today... Anybody home? 
Thank you... may be i was wrong this time... 0.375 seems a good price to enter...
oldflyingfox ( Date: 29-May-2012 11:51) Posted:
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Good Luck!
CrazGreed ( Date: 29-May-2012 09:53) Posted:
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