Macquarie Intl   

MIIF

Interesting point from NRA Capital ..

MW’s registration of carbon credits is at the final stages and upon approval will generate increment revenue, allow partial write-back on MW investment (fully written-down) and provide better bargaining power for the refinancing of a NT$455m (~S$19.3m) debt due in Dec 2012.   

(Source:  MIIF: Headwind at HNE casts shadow over sustainability of annual dividend of 5.50Scts in FY13 )

 

 

 

I think this is a right decision as Miaoli is not income producing investment. 

Just curious if Miaoli able to secure financing on its own.

oldflyingfox      ( Date: 15-May-2012 10:37) Posted: I remember that the managment has said in the AGM that they won't pump in any more money into Miaoli Wind, a possible option is to just sell it away. Anyway, it was too small to have any impact on MIIF.

 

I remember that the managment has said in the AGM that they won't pump in any more money into Miaoli Wind, a possible option is to just sell it away.

Anyway, it was too small to have any impact on MIIF.

 

Miaoli debt wont affect much... good thing is management is still buying back the shares in the market, especially in this down time

 

Is SIAS signaling that MIIF will use internal fund to finance  Miaoli Wind S$19m (NT$445m) of debt maturing in December this year? 

(Source:  Macquarie International Infrastructure Fund: An Attractive Yield Play (SIAS))

 

 

Based on the EBITDA of each asset and % contribution, using the slightly worst exchange rate and minus away the corporate income tax and property tax which is usually the major tax that the coporate need to pay for reits. The remainding earning of the 4 assets that they are holding is still a 37.3million and not 21.3million,

Exchange rate used RMB/SGD is 5.08 and NT/SGD is 23.5

China corporate tax 25% and property tax 1.2% asset value.

Taiwan corporate tax 17% and property tax 5% asset value.

Anyone can enlighten me any other figure that I have missed out?

 

Actually, I am not use to MIIF presentation way in their financial report, as based on my analysis there seems to be alot of figure that is not very easy to identify.

But never mind, their share buy back start immediately after the 1Q result release, it really show that they are still accumulating. Previous stop is only due to the SGX rules of not able to buy the share within certain day before the result release.

 

Hunter2011      ( Date: 10-May-2012 14:56) Posted:   DBSV: " The key risk is a possible toll rate reduction at HNE Phase I, as the Guangdong government will be introducing uniform toll road standards in 2012. Our numbers already reflect a toll rate cut at HNE Phase I of about 20% by mid-2012, but this could be further delayed, as there has been no communication yet from local authorities.  "     (source:  MIIF: Buoyant dividend income in 1Q)  DBSV also said : HNE also surprised on the upside, delivering 14% EBITDA growth in 1Q12, driven by higher traffic volumes benefiting from traffic feed from newly opened Guanghe Expressway.  The question: Could HNE enjoy higher traffic volumes after 20% reduction in toll rate? Do DBSV take into consideration this?

 

 








DBSV: " The key risk is a possible toll rate reduction at HNE Phase I, as the Guangdong government will be introducing uniform toll road standards in 2012. Our numbers already reflect a toll rate cut at HNE Phase I of about 20% by mid-2012, but this could be further delayed, as there has been no communication yet from local authorities.  "     (source:  MIIF: Buoyant dividend income in 1Q) 

DBSV also said : HNE also surprised on the upside, delivering 14% EBITDA growth in 1Q12, driven by higher traffic volumes benefiting from traffic feed from newly opened Guanghe Expressway. 

The question: Could HNE enjoy higher traffic volumes after 20% reduction in toll rate? Do DBSV take into consideration this?

 

thanks for the sharing, will  keep  an eye on it.

 

The income is 21.3million, that is 1.8cts per share, the 1.1cts earning is becoz they have show a 8million reduce in their asset fair value. This is totally irrelevant in their. As they are not property developer, and even if property developer, there should be coming in the cost and sales portion. In actual fact, this fair value does not involve any transaction at all. The actual substantiable divident based on the 1.8cts for Q1, will be 7cts for the year. Of course that determine by how the management want to play the game, but based on the continous accumulating, it should expect that the profitability of the company should be continue to increase. And based on the way the report Q1 it is still expected that the accumulation will still continue.

oldflyingfox      ( Date: 09-May-2012 16:07) Posted: EPS seem to be lower than the past  dividend, (Q1 was $0.0114, if x4 for full year, it  will be estimated at $0.0456). Unless the profit continue to grow, do expect a lower dividend for a longer term. If coming full year dividend is $0.45 instead of $0.55 then the yield will be 7.8% insetad of 9.6%. Although still looks attactive but you have to manage your expectation since management did not advise on the coming dividend estimation.

 

EPS seem to be lower than the past  dividend, (Q1 was $0.0114, if x4 for full year, it  will be estimated at $0.0456). Unless the profit continue to grow, do expect a lower dividend for a longer term.

If coming full year dividend is $0.45 instead of $0.55 then the yield will be 7.8% insetad of 9.6%. Although still looks attactive but you have to manage your expectation since management did not advise on the coming dividend estimation.

 

yes... already vested in this since long long... 

 

Get in somemore today after the result release for 1st quarter

As it show Net income of S$21.3 million up S$13.7 million on prior year, which is double the quarter end for 2011.

Remember 4Q2011 divident is 2.75cts, 2Q2011 is 2.75cts, and 4Q2010 is 1.50cts.

Do we expect that MIIF will have better divident for the 2Q2012, when the earning is double for the first quarter already.

At current 2.75cts for half a year, one year will be 5.5cts and the price of 57.5cts is just = 9.5% return of investment early, so much higher then most of the stock that you can find in the market.

I think that is the reason why the continous share buyback from the company as they are expecting better result and better return just by investing on its own share.

 

Up to you....I am invested in this...

Even it drops to 5cts...your dividend will cover the lost. 

   

 

Hey guys, the bottom line is this. MIIF's is worth 79 cents a share and it is selling at 58 cents. Moreover, it is paying a good dividend. Should we buy?

 

Miaoli EDBITA is 252.2million NT for 2011, 2010 is 188.9 million NT, 2009 is 203.6million NT,  these three years  no contribution to distribution, it already make up 644.7 million NT, which still have not consider 2012, isn't it more then enough to repay the dept? where is the risk?  

Miaoli refinancing at risk is quoted in MIIF (page 45 - http://www.macquarie.com/dafiles/Internet/mgl/miif/news/2012/docs/22-02-2012-sgx-report.pdf), furthermore EDBITA ≠ cash.  

For the 2020 due is 1.2billion NT which is 1,200million NT  not 12,000millionNT (which you quoted), for 8years till 2020 assume the EDBITA is the same as 2011, which will be 2017.6million NT, thus for 1200million NT, there will be still an access of 817.6million, why do they need refinancing?

Yes there is a typo error, 2020 loan due should be 1.2 billion = S$51million , the point to highlight the 2020 loan due caused if Miaoli not able to refinance 2012 and MIIF wanted to retain Miaoli mean MIIF will need to inject S$19m + S$51m and total investment could become S$100m.   of course MIIF cause inject S$19m for 2012 loan due and subsequently look for buyer. But based on current operation performance MIIF fetch a good price? Recent high oil price of course added some value to Miaoli. Again EDBITA ≠ cash unless MIIF publish Miaoli financial report we would have a better picture.

Based MIIF conservative capital management, Miaoli should negotiate with their banker on refinancing on 2012 loan and yet management highlighted risk of refinancing mean Miaoli banker might not satisfy with Miaoli operation performance.

For the EDBITA margin, it is the best for all the investment that MIIF have, do you think they are so stupid to give up this golden egg? The reason for those statement that you mention is quited clear if you think through.

Of course MIIF management not stupid but there should be a reason why they decided to  written off Miaoli investment  from S$30m to ZERO.

If they are really in the risk, will they put up cash to buy back their own shares?

MIIF share buyback decision as explained by management they cannot find assets with reasonable and of course management think MIIF share undervalue (NBV of S$0.79) as valued by management. Take note that NBV S$0.79 per share not included Miaoli.

I do not question MIIF business model and in fact I like infrastructure assets, but the existing bullet loan repayment term make asset owner at certain risk. I like amortization method which I think is more sustainable and stable.

cheongsl      ( Date: 29-Mar-2012 19:14) Posted: Hi hunter2011, Miaoli EDBITA is 252.2million NT for 2011, 2010 is 188.9 million NT, 2009 is 203.6million NT,  these three years  no contribution to distribution, it already make up 644.7 million NT, which still have not consider 2012, isn't it more then enough to repay the dept? where is the risk? For the 2020 due is 1.2billion NT which is 1,200million NT  not 12,000millionNT (which you quoted), for 8years till 2020 assume the EDBITA is the same as 2011, which will be 2017.6million NT, thus for 1200million NT, there will be still an access of 817.6million, why do they need refinancing? For the EDBITA margin, it is the best for all the investment that MIIF have, do you think they are so stupid to give up this golden egg? The reason for those statement that you mention is quited clear if you think through. If they are really in the risk, will they put up cash to buy back their own shares? Hunter2011      ( Date: 29-Mar-2012 10:12) Posted: Even if Miaoli default loan there will be NO financial impact. The risk actually is MIIF inject fresh fund to rescue. Miaoli cost of acquisition: S$30.8 million (20 March 2008) Miaoli outstanding loan NT457million @ +/- S$19 (due Dec 2012) NT12000million @ +/- S$51 (due 2020)   If Miaoli current business model (15 year fixed tariff )not viable why should MIIF inject fresh fund??   " Miaoli Wind owns and operates 25 wind turbines, with a combined capacity of 49.8MW, at two sites in Miaoli County, Taiwan. Miaoli Wind generates revenue by selling its entire energy production to Taipower under a 15 year fixed tariff PPA (one agreement per wind farm site) with an option to extend each PPA for an additional 5 years. The fixed tariff is NT$ 2.00/kWh."

 

Hi hunter2011,

Miaoli EDBITA is 252.2million NT for 2011, 2010 is 188.9 million NT, 2009 is 203.6million NT,  these three years  no contribution to distribution, it already make up 644.7 million NT, which still have not consider 2012, isn't it more then enough to repay the dept? where is the risk?

For the 2020 due is 1.2billion NT which is 1,200million NT  not 12,000millionNT (which you quoted), for 8years till 2020 assume the EDBITA is the same as 2011, which will be 2017.6million NT, thus for 1200million NT, there will be still an access of 817.6million, why do they need refinancing?

For the EDBITA margin, it is the best for all the investment that MIIF have, do you think they are so stupid to give up this golden egg? The reason for those statement that you mention is quited clear if you think through.

If they are really in the risk, will they put up cash to buy back their own shares?

Hunter2011      ( Date: 29-Mar-2012 10:12) Posted: Even if Miaoli default loan there will be NO financial impact. The risk actually is MIIF inject fresh fund to rescue. Miaoli cost of acquisition: S$30.8 million (20 March 2008) Miaoli outstanding loan NT457million @ +/- S$19 (due Dec 2012) NT12000million @ +/- S$51 (due 2020)   If Miaoli current business model (15 year fixed tariff )not viable why should MIIF inject fresh fund??   " Miaoli Wind owns and operates 25 wind turbines, with a combined capacity of 49.8MW, at two sites in Miaoli County, Taiwan. Miaoli Wind generates revenue by selling its entire energy production to Taipower under a 15 year fixed tariff PPA (one agreement per wind farm site) with an option to extend each PPA for an additional 5 years. The fixed tariff is NT$ 2.00/kWh." Hunter2011      ( Date: 29-Mar-2012 10:01) Posted: MIIF  written off  Miaoli Wind and  book value now is zero. So common sense, MIIF should not inject  fresh fund in to Miaoli unless  the operation is much more  viable. of course if  Miaoli operation cash flow able to sustain interest repayment then refinancing is possible. See management comments on Miali “Outlook _ Since acquisition, wind speeds have been significantly lower than expected. The original valuation at acquisition was based on 36 years of wind history from a nearby location and provided management with high confidence over a long-term achievable average. However, the operational performance has been disappointing and management has now revised its forecast to the average actual historic generation. This puts at risk Miaoli Wind’s ability to refinance to current debt levels in 2012. _ Miaoli Wind has lodged an application for Voluntary Gold Standard carbon credits. The Gold Standard Foundation has accepted the project’s pre-feasibility assessment and the project is now in the final stages of validation. If the application is successful, Miaoli Wind will be able to generate incremental revenue through the sale of these credits”

 

Even if Miaoli default loan there will be NO financial impact. The risk actually is MIIF inject fresh fund to rescue.

Miaoli cost of acquisition: S$30.8 million (20 March 2008)

Miaoli outstanding loan

NT457million @ +/- S$19 (due Dec 2012)

NT12000million @ +/- S$51 (due 2020)

 

If Miaoli current business model (15 year fixed tariff )not viable why should MIIF inject fresh fund??

 

" Miaoli Wind owns and operates 25 wind turbines, with a combined capacity of 49.8MW, at two sites in Miaoli County, Taiwan.

Miaoli Wind generates revenue by selling its entire energy production to Taipower under a 15 year fixed tariff PPA (one agreement per wind farm site) with an option to extend each PPA for an additional 5 years. The fixed tariff is NT$ 2.00/kWh."

Hunter2011      ( Date: 29-Mar-2012 10:01) Posted: MIIF  written off  Miaoli Wind and  book value now is zero. So common sense, MIIF should not inject  fresh fund in to Miaoli unless  the operation is much more  viable. of course if  Miaoli operation cash flow able to sustain interest repayment then refinancing is possible. See management comments on Miali “Outlook _ Since acquisition, wind speeds have been significantly lower than expected. The original valuation at acquisition was based on 36 years of wind history from a nearby location and provided management with high confidence over a long-term achievable average. However, the operational performance has been disappointing and management has now revised its forecast to the average actual historic generation. This puts at risk Miaoli Wind’s ability to refinance to current debt levels in 2012. _ Miaoli Wind has lodged an application for Voluntary Gold Standard carbon credits. The Gold Standard Foundation has accepted the project’s pre-feasibility assessment and the project is now in the final stages of validation. If the application is successful, Miaoli Wind will be able to generate incremental revenue through the sale of these credits”   cheongsl      ( Date: 29-Mar-2012 07:28) Posted: 1sgd = 23.49NT, thus 457NT million  = 19.87S$million Cash and cash equivalent is 110million > > 19.87million loan of miaoli wind

 

MIIF  written off  Miaoli Wind and  book value now is zero. So common sense, MIIF should not inject  fresh fund in to Miaoli unless  the operation is much more  viable. of course if  Miaoli operation cash flow able to sustain interest repayment then refinancing is possible.

See management comments on Miali

“Outlook

_ Since acquisition, wind speeds have been significantly lower than expected. The original valuation at acquisition was based on 36 years of wind history from a nearby location and provided management with high confidence over a long-term achievable average. However, the operational performance has been disappointing and management has now revised its forecast to the average actual historic generation. This puts at risk Miaoli Wind’s ability to refinance to current debt levels in 2012.

_ Miaoli Wind has lodged an application for Voluntary Gold Standard carbon credits. The Gold Standard Foundation has accepted the project’s pre-feasibility assessment and the project is now in the final stages of validation. If the application is successful, Miaoli Wind will be able to generate incremental revenue through the sale of these credits”

 

cheongsl      ( Date: 29-Mar-2012 07:28) Posted: 1sgd = 23.49NT, thus 457NT million  = 19.87S$million Cash and cash equivalent is 110million > > 19.87million loan of miaoli wind. Hunter2011      ( Date: 28-Mar-2012 15:06) Posted: ZERO debt at MIIF level  but Business level borrowings are more than S$1 billion MIIF Debt profile page 24. By how much MIIF cash flow will be affected by CXP Loan- - bullet repayment of RMB 180m in FY2014 - bullet repayment of RMB 175m in FY2014 – 2017 ??   Can Miaoli Wind refinance NT$457 million loan due Dec 2012?

 

I can't get the distribution lower by 13% based on the descript impact, only around 10%, lets consider 13% as per your estimation decline, the DPU will be around 4.7cts, thus based on current price of $0.575, the yield is still around 8.2% which is consider quite high compare to other reits in the market currently.

Hunter2011      ( Date: 02-Mar-2012 17:04) Posted: Can 5.5c (p.a) dividend of MIIF lasting forever?  … policy risks at HNE in the short-term could impact DPU but management to seek compensation. As part of a national porgramme to review toll rates, the Guangdong Transport Bureau has announced plans to standardize the toll rate used to calculate tolls by all highways in the Guangdong Province. The implementation of the plan may result in toll rate declining by about 20% at HNE Phase 1, which will adversely impact EBITDA and margins as well lower FY12 distribution by an estimated 13%. However, the adverse impact is expected to be mitigated by compensation which MIIF will seek with the authorities. (Souce: MIIF: Potential headwind at HNE but management will seek compensation(NRA)  )