MIIF

• sm = some
• cm = come
• tmr = tomorrow
• wat = what
• noe = know
• din = did not
• e = the
• BBs = Big Boys
• tgif = thank god is Friday
• ttyl = talk to you later
• lc = low class
• paw = parents are watching

Hehehehe... ('',)

I'm not dreaming Sweet Heart...

My 1 of e friend sold sm today. But when I asked her which Counter has bot fm her...

Guess wat??? Dat was BBs' Counter's #.

('',)

Since the completion of its divestment of  MEIF on 31 May, Co. NAV is 76c which comprises 36c cash (S$467m) and 40c in Invested Assets (IA).

The IA consists of

1. Miaoli Wind (MW) in Taiwan – 100% owned but loss making. Co. has written down it value to $0.. Co. is in the process of getting Carbon Credits for this project which will enhance the value of MW and hopefully make it more attractive for divestment.
2. Hua Nan Expressway (HNE) – 81% stake - toll highway in Guangdong China. Book Value $291.6m.
3. Changshu Xinghua Port (CXP) – 38% stake in port in China, Book Value $85.8m.
4. Taiwan Broadband Communication (TBC) – 20% stake in Taiwan – Book Value $172.7m.

 HNE, CXP and TBC are profitable. Based on 2009 distribution, these investments should yield eps of 2.0c or more. From Co. commentary, 2009 distribution can be maintained or improved for 2010.

Hence, shareholders of MIIF can expect a dividend of 2.0c for 2010 (3.0c in FY2009). But, given the healthy cash horde, Co should easily maintain its 2009 divident of 3.0c….but that is left to be seen.

Given the current low interest environment, sitting on 467m cash will not give shareholders an attractive yield. Co. has stated their intentions as follows:

1. Look for new investments in Asia.
2. Return excess cash to shareholders thru capital reduction.
3. Share buyback – personally I am not in favour of this

At a price of say 50c for MIIF, investor is paying 36c for its cash and 14c (36 + 14 = 50c) for its IA which is valued at 40c…..a 65% discount.

Note – over the past 12 months, SGD has generally strengthened against the TWD and Yuan. This may affect the distribution revenue when translated into SGD. However, the S$467m will be an advantage for new investments potentials.

Caveat emptor

Logically this will never happen. MIMAL's management fees are derived from MIIF's portfolio size. Any return of capital would implicitly mean reduced earnings for MIMAL. Moreover, the divestment of MEIF was done at a loss so the possibility of a one off special dividend is nill. 

In their FY report, MIIF has made it clear that they intend to use their cash to purchase more Asian infrastructure assets to boost their sources of distributable income.