Purchase and Rights Subscription of Rickmer Maritime

Current Price on 18th Jun 2013 = $0.275

• Current Yield = 10.73%  
• Price-to-book Ratio = 0.376
• Assets per unit = $1.595
• Debt per unit = $0.865 (including current liabilities)
• Gearing = 54.1%

Rickmer Maritime has made a successful rights issue last month and also successfully extended their waiver of their LTV ratio. The high excess application rate shows that there is still demand for such products despite its woes. With an extremely high yield of 10.73% and low price-to-book ratio at 0.376, I believe that its low price is a strong reflection of its high risk.

I took a small portfolio of 10,000 shares at $0.34 (total $3,400) of Rickmer Maritime even though it is an extremely high risk investment trust to me. With that, I have also subscribed an additional 11,000 shares exercising my rights and excess rights at $0.24 (total $2,640).

Current price is at $0.275 which is lower than my average purchase price of $0.288. With the high subscription rate of its rights issue earlier last month, things should stabilize and I will be enjoying my 10.73% dividend yield with an expectation of zero capital appreciation.

Analysis of CapitaCommercial Trust

Current Price on 14th Jun 2013 = $1.515

• Current Yield = 5.17%  
• Price-to-book Ratio = 0.925
• Assets per unit = $2.443
• Debt per unit = $0.805 (including current liabilities)
• Gearing = 33.0%
• Secured NAV = $1.616 (106%)

It has been a while (more than a year) since I analyzed CCT. But since the price went down and risk went up, it is time to look at this again which I think is one of the safest investment we can find among the S-REITs.

Yield is very low at 5.17%, the lowest among the office REITs. But price-to-book ratio is at 0.925 which is average. But what is promising is its secured NAV which is at 106% of its trading price. This also means that in the worst case scenario aka debts are defaulted and properties are seized, there is still a value of $1.616. This is great!

This is just one of the considerations for me especially when security is concerned. There are other REITs which I am considering and will be writing in this blog soon on it. It does seem attractive because of the secured NAV.

Analysis of AIMSAMP REIT

Current Price on 7th Jun 2013 = $1.67

• Current Yield = 7.52%  
• Price-to-book Ratio = 1.087
• Assets per unit = $2.091
• Debt per unit = $0.554 (including current liabilities)
• Gearing = 26.5%
• Secured NAV = $0.659 (39.5%)

AIMSAMP REIT recently fell to one of its lowest level at $1.67 which helps to increase its yield to 7.52%. Moreover, it has recently announce its redevelopment plans which is yield accretive and NAV accretive as well. According to estimates, it will increase its yield to 7.94% which is very high and close to my criteria.

Its price-to-book ratio is unfortunately still at a high of 1.087. But with its recent private placement and debt repayment, its gearing is at a healthy 26.5% which is arguably the lowest among the industrial REITs (comparing with Cambridge Industrial Trust, Cache Logistics Trust and Sabana REIT). Secured NAV is at 39.5%, not very high but encouraging.

Most indicators seems very healthy for AIMSAMP REIT. I do have some cash for investment and it seems that I am going for this to enhance my portfolio yield. Moreover, I believe that there are more redevelopment coming in which helps to enhance its yield and NAV, a strategy which other REITs are less likely to do.

Analysis of LMIR

Current Price on 7th Jun 2013 = $0.495

• Current Yield = 7.19%  
• Price-to-book Ratio = 0.868
• Assets per unit = $0.893
• Liabilities per unit = $0.323 (including current liabilities)
• Gearing = 36.2%
• Secured NAV = $0.402 (81.2%)

There has been weakness in the REIT sector with the impending rise in interest rates. However, there are analysts who are saying that there is an over reaction. Nevertheless, yield has risen and there are opportunities lying around now. One of them, I believe is LMIR.

Its yield is back at 7.19% which is quite high compared to other retail REITs. Moreover, its price-to-book ratio is at 0.868 which means we are getting it at quite a discount. Secured NAV is at 81.2% which provided some security to its trading price as well. Liabilities level is at a healthy 36.2% with low level of debt.

LMIR will continue to grow with the support of its Indonesian sponsor and this trading price is one which is quite low, a level I have not seen for a while. Nevertheless, the market is quite weak now so observing closely to see whether I should increase my holdings. (I haven't sell what I have yet!)

Pricing determined for APTT

Asian Pay TV raises S$1.39b in S’pore IPO | TODAYonline:

'via Blog this'

So it is confirmed that the price is at $0.97 per unit which is at the bottom of the updated indicative range of $0.97 to $1.

Initially, the indicative range was $0.92 to $1 so by narrowing it at the top end seems to say that there is demand for this business trust. However, with the pricing not at the top end of the indicative range shows that people are not willing to pay more to invest in this trust.

Thus, for me, I will not apply for this IPO as my prediction is that its opening price will be about $0.97 if not lower. It is very unlikely that it will move above $0.97. Anyway, I have indicated before in my earlier post, that about 7.4% yield is not appealing especially that there are REITs which are more stable and trading at this yield.

Analysis of Asian Pay Television Trust

Proposed Maximum price = $1

• Current Yield = 7.26%  
• Price-to-book Ratio = 1.097
• Assets per unit = $1.685
• Debt per unit = $0.773 (including current liabilities)
• Gearing = 45.9%

There is going to be a new listing of an infrastructure assets in the name of Asian Pay Television Trust which is a hive-off from MIIF. The yield is at an attractive rate of 7.26% which is quite high if you are comparing with REITs. However, its price-to-book ratio is at 1.097 which means we are paying about 10% more for this asset.

I believe that Infrastructure Assets have a faster depreciation than REITs since there is wear and tear plus advancement of technology. Thus, I am not too sure whether it can sustain the assets per unit of $1.685. Its gearing is also quite high at 45.9% which is quite dangerous.

I think I will need more information and knowledge on this kind of investments before I decide. Nevertheless, 7.26% yield to me is not good enough considering that there are REITs with similar yield.

Analysis of Global Investment Limited (Non-REIT)

Current Price = $0.16

• Current Yield = 9.38%  
• Price-to-book Ratio = 0.708
• Assets per unit = $0.255
• Debt per unit = $0.026 (including current liabilities)
• Gearing = 10.2%
• Secured NAV = $0.169

Global Investment Limited has announced its results which are quite favourable except for their proposed rights issue. At current price, it is already 9.26% with a favourable price-to-book ratio. Its secured NAV (according to my estimation) is also at $0.169 which is higher than its trading price. 

This pricing is a response to the rights issue where it drops from $0.17. I just thought that it is quite unnecessary for raise more funds at this juncture because it will dilute the NAV and secured NAV as well. Moreover, they said that they will be in a position to seize opportunities that comes along the way does not really appeal me. I don't know when it will happen. If there is a delay, our dividends might be affected.

Just a quick data on how it looks like after rights issue. Price will be $0.155

• Current Yield = 9.67%  
• Price-to-book Ratio = 0.767
• Assets per unit = $0.223
• Debt per unit = $0.018 (including current liabilities)
• Gearing = 8.3%
• Secured NAV = $0.161

Nevertheless, it may seem to be an opportunity to buy on weakness since its trading price is below secured NAV. I am heavily exposed to this counter already (having 157,000 shares) so I will just look forward to securing its rights and apply for excess. I look at it in totality and it still seems a good deal.