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Mapletree Commercial Trust’s Q2 and 1H FY2020/21 Results – Key Highlights and My Thoughts

Mapletree Commercial Trust’s Q2 and 1H FY2020/21 Results – Key Highlights and My Thoughts

Highlights of MapleTree Commercial Trust Results

3 Things You Need to Know About Mapletree Commercial Trust Before You Buy

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with a username known as @ljunyuan and has 1412 followers.

Mapletree Commercial Trust, out of the other REITs, released its latest results in the evening (its results are for the second quarter and first half of the financial year 2020/21 – it has a year-end every 31 March.) Hence, yesterday was certainly busy for me, where 3 REITs in my long-term investment portfolio (you can check out a list of all the companies I have invested in here) released their latest financial results for the quarter ended 30 September 2020 – CapitaLand Mall Trust (for the third quarter, which you can check out here), and Suntec REIT (also for the third quarter, which you can read here) before market hours.

In my post today, I will be sharing key aspects you need to know about the REIT’s latest update – particularly its financial performance, debt, and portfolio occupancy profile, along with its distribution per unit. On top of that, you will also find my personal thoughts about the blue-chip REIT’s latest set of results peppered throughout the post.

Let’s get started…

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The Clorox Company (NYSE:CLX) – Does the Company Make a Good Addition to Your Investment Portfolio?

The Clorox Company (NYSE:CLX) – Does the Company Make a Good Addition to Your Investment Portfolio?

Is The Clorox Company a good addition to your investment portfolio?

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as @ljunyuan and has 1408 followers.

NYSE-listed The Clorox Company (NYSE:CLX) has products on the supermarket shelves that clean and disinfect our homes. What with the ongoing Covid-19 pandemic, people have been stepping up their hygiene standards at home so as to protect themselves as well as their loved ones from being part of the Covid-19 statistic.

Apart from Clorox, some of the brands you should be familiar with (which is also from the company) include Glad’s range of plastic food wraps and food bags (you can check out their range of products on the website of supermarket retailers Cold Storage and Giant), Liquid-Plumr’s range of decloggers (again, you can check out the range of products sold in Singapore on the website of Cold Storage and Giant), as well as Burt’s Bees range of skincare products (you can check out their range of products on Sephora Singapore’s website here.)

In my writeup about The Clorox Company today, I will be sharing with you a bit more about the company’s other businesses, followed by looking at its historical financial performance, debt profile, and dividend payout to its shareholders over the past 6 financial years (as the company has a financial year-end every 30 June, I will be looking at its financial results between FY2014/15 and FY2019/20.) On top of that, I will also be sharing whether or not at its current traded price, is the company considered ‘cheap’ or ‘expensive’ based on its current vs. its historical valuations.

Let’s get started…

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SPH REIT’s 2H and Full-Year Results for FY2019/20 – The Good and The Bad

SPH REIT’s 2H and Full-Year Results for FY2019/20 – The Good and The Bad

SPH REIT’s 2nd Half and Full-Year Results (FY 2019-20) – The Good and The Bad

SPH REIT just slashed its dividends. Will other retail REITs follow suit?, Money News - AsiaOne

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as @ljunyuan and has 1405 followers.

Time flies. We are now into the final quarter of the calendar year 2020. With that, we are into another round of earnings season, where, over the next couple of weeks, we await for companies to release their updates for the quarter ended 30 September 2020. SPH REIT however, has already released its financial results.
Just like in the previous quarters, I will be providing updates on companies in my long-term investment portfolio (you can check out all the companies I’ve invested in here) as and when the management makes available the latest updates.

SPH REIT (SGX:SK6U) was the first company that released its financial results for the second half of the financial year 2019/20 (the period between 01 February and 30 August 2020), as well as for the full-year 2019/20 yesterday evening (06 October 2020) after market hours.

In this post, you will find key components of the retail REIT’s latest results to take note of, along with my personal thoughts…

Financial Results (2H FY2018/19 vs. 2H FY2019/20, and FY2018/19 vs. FY2019/20)

In this section, you will find the REIT’s financial performance for the second half of the financial year 2019/20 compared against the same period last year (i.e. 2H FY2018/19), as well as the REIT’s full-year results for FY2019/20 compared against its results for the previous financial year 2018/19:

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Monster Beverage Corporation – What You Need to Know about the NASDAQ-listed Company

Monster Beverage Corporation – What You Need to Know about the NASDAQ-listed Company

Monster Beverage Corporation (NASDAQ:MNST) is in the business of developing, marketing, selling, and distributing energy drink beverages, as well as concentrates for energy drink beverages.

Monster Beverage Corporation's 'Monster Energy' Drinks. Photo by Christian Wiediger on Unsplash

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as @ljunyuan and has 1404 followers.

The company has three operating and reporting segments, namely:

(i) Monster Energy drinks and Reign Total Body high-performance energy drinks, where its range of products are sold in 148 countries and territories globally,

(ii) Strategic brands segment, which comprises of various energy drink brands acquired from The Coca Cola Company in 2015; its products are currently sold in 106 countries and territories globally,

(iii) Other segments, which comprises of certain products sold by American Fruits and Flavors LLC to independent third-party customers.

As for the company’s customer segments, as at the end of the financial year 2019 (ended 31 December 2019), they are as follows:

  • 58% – US full-service bottlers/distributors
  • 33% – International full-service bottlers/distributors
  • 7% – Club stores, mass merchandisers, and e-commerce retailers
  • 1% – Retail grocery, specialty chains, and wholesalers
  • 1% – Others

In the remainder of today’s post about Monster Beverage Corporation, you will read about its historical financial performance and debt profile (over a 5-year period), its key financial performance for the first half of the current financial year (compared against the same period last year), and finally, whether or not at its current share price, is the company considered ‘cheap’ or ‘expensive.’

Let’s begin…

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7 Interesting Stock Ideas – October 2020

7 Interesting Stock Ideas – October 2020

Here are some stock ideas for you to take note of, in times of such volatility period.

ZOOM Shares Double as Investors Mistakenly Bet on Company | Time

This post was originally posted here. The writer, James Yeo is a veteran community member and blogger on InvestingNote, with username known as @smallcapasia and has 905 followers.
September will be remembered as the month with massive stock corrections. S&P 500 has retraced about 8% from its high on 2 September while Nasdaq index has retraced about 9.5%.On the bright side, it will also be remembered as the month where Singapore relaxes its COVID measures further. It is a time for rejoicing as 100 people can attend wedding functions now!These loosening of measures have also had effects on the Singapore stocks. Stocks’ volatility is bound to increase with the USA’s election around the corner. It is necessary for investors to take note of solid companies to tide through this volatility.
Here are 7 interesting stock ideas for the month of October for you to take note of.

#1 Food Empire Holdings Limited

Lim and Tan Securities have maintained its Accumulate rating and upgraded its target price of the company from $0.61 to $0.72.

This is at the back of ” stringent cost reduction measures where necessary and this resulted in a noticeable 10.5% decrease in SG&A expenses YoY for 1H20, allowing them to eke out a YoY increase of 1.1% in NPAT despite the fall in revenue and gross profit.”

Moreover, the analysts are also having the view that “any possible future lockdowns will not be as serious as that of the first global lockdown and that a recovery in 2H20 is imminent.”

#2 AEM Holdings Limited

Maybank Kim Eng has maintained buy on AEM Holdings and upgraded its target price from $4.26 to $5.05.

The positive increase in share price estimates is because AEM continues to provide relevance to its customers. Taking reference from ” Intel’s Architecture Day include that Intel will continue to decouple design from process technology, as well as focus on advanced packaging technologies to drive leadership products.

We believe this is favorable to AEM as heterogeneously packaged chips come with testing challenges at the wafer level that can be overcome by SLT at the packaged level to ensure product reliability. ”

The next catalyst for growth is from Automotive Chips. “Automotive chips are challenging to test given requirements for zero defect and high thermal reliability. AEM presented at the SEMI SEA 2020 conference on how its asynchronous, modular and massively parallel approach to SLT can tackle these challenges in a cost-effective way.

We walked away with a greater appreciation for AEM’s AMPS solution, and believe exciting end-markets beckon for AEM.”

#3 HRnet Group Limited

CGS CIMB has upgraded its ratings from Hold to Add and has a price target of $0.523.

The company has been upgraded at the back of attractive valuation and a 5% yield. ” The group had S$286m net cash as of end-Jun 20 (forming c.65% of market cap) and offers c.5% FY20-22F dividend yield.

This makes it one of the cheapest and highest dividend-paying stocks among global recruitment companies. Catalysts are synergistic M&As and more job creation.”

The next apparent push for the company is the “government’s push for more job creation and local employment given its relative focus on domestic candidates.

New offices (e.g. RecruitFirst in Jakarta, HRnetOne Shenzhen) and services (outplacement) could help diversify its revenue sources.”

#4 Lendlease Global Commercial REIT

DBS has maintained buy on Lendlease REIT with a target price of $0.90.

The valuation has been a result of the “repositioning 313@Somerset’s tenant mix in view of its enlarged footprint to c.330k sqft and shopper base following the launch of Grange Road carpark redevelopment in 2Q22.

With projected returns of 18% from the redevelopment, we see DPU growing by 3% CAGR in FY21-22.”

There could also be some accreditive acquisitions in the pipeline. Analysts ” believe that LREIT’s first acquisition, which could be a stake in quality suburban mall JEM, maybe just around the corner.

Likely to be debt-funded, the yield accretion will further boost the REIT’s DPU profile. Higher DPU growth rates will be a catalyst for a share price re-rating.”

 

#5 Ho Bee Land Limited

CGS CIMB has maintained a rating of Add and has increased its target price from $2.56 to $2.70.

The continued support on the rating is due to “HoBee for its strong recurring income profile, derived from rentals in Singapore and UK. Upside catalyst: continued deployment of capital; downside risk: asset devaluation from its investment property portfolio.”

And also ” factor in HoBee’s latest capital deployments into c.S$250m worth of new investments over the past six months.”

Another positive factor is also due to projected ” FY20F EPS is also increased by 5.88% as we factor in a faster-than-projected handover of residential units in China.”

 

#6 Avi-Tech Electronics Limited

RHB Capital has maintained its buy rating on the company with a target price of $0.52.

The rating and positive sentiments from RHB are due to a few factors. “Burn-in testing for automotive component still growing strongly. With the sector slowdown – in effect since 2018 – having bottomed out, its outlook should improve.

Avi-Tech’s performance should continue to pick up in FY21F, with decent growth from burn-in services, which fetch a much higher GPM. ”

Also, the company is in a net cash position which is extremely valuable in the industry.

“With a net cash balance sheet and strong operating FCF, management should continue to reward shareholders with attractive dividends, despite the drop in profits over the previous year.”

#7 SBS Transit Limited

CGS CIMB has initiated an Add rating on SBS Transit with a target price of $3.40.

One of the main reasons is that it is the “leading bus operator in Singapore”. “As a beneficiary of Singapore’s public policy that favors public transport over private vehicle ownership, SBUS offers long-term structural growth, in our view.

SBUS holds a market leadership position in the public bus industry (61% market share by bus routes in 2019), which generates defensive earnings and stable cash flow under the Bus Contracting Model (BCM). It also operates 3 of the 8 existing rail lines in Singapore as at end-1H20.”

It is also “a recovery play” with the revival of the economy. “We expect public transport ridership to return to c.90% of pre-COVID levels by FY21F.

Since the lifting of the circuit breaker in Jun, ridership has steadily improved – SBUS rail ridership rose to c.55% of pre-COVID levels in Aug (Jul: 50%).

Once again, this article is a guest post and was originally posted on smallcapasias profile on InvestingNote.

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Key Summary of Frasers Centrepoint Trust’s (FCT) EGM on 28 September 2020

Key Summary of Frasers Centrepoint Trust’s (FCT) EGM on 28 September 2020

This post was originally posted here. The writer, Lim Jun Yuan is a veteran community member and blogger on InvestingNote, with username known as ljunyuan and has 1394 followers.

This morning, retail REIT Frasers Centrepoint Trust (SGX:J69U) held its extraordinary general meeting (EGM) to seek unitholders’ approval on the REIT’s proposed acquisition of the remaining 63.1% stake in AsiaRetail Fund Limited (whose portfolio consists of Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square, Tampines 1, and Central Plaza), proposed equity fundraising, as well as the proposed divestment of Bedok Point.

I have attended the EGM as a unitholder of the REIT and for the benefit of those who weren’t able to attend, in this post, you’ll find a summary of the presentation by Mr Richard Ng (the CEO of the REIT) on how the acquisition of AsiaRetail Fund Limited is beneficial for the REIT and its unitholders, results of the resolutions that were put to vote, along with responses to some of the questions raised by unitholders…

Benefits of the Proposed Acquisition of AsiaRetail Fund Limited

The following are some of the key benefits of the REIT’s proposed acquisition of the remaining 63.1% stake of AsiaRetail Fund Limited to highlight:

  • From 7 malls in the REIT’s portfolio currently, post-acquisition, its portfolio will have 11 malls. Some of the other key statistics include REIT’s portfolio net lettable area increasing from 1.4m sq ft to more than 2.3m sq ft, along with the number of leases increasing from 800 to more than 1,500.
  • The proposed acquisition is a DPU-accretive one, and based on its DPU for FY2019, after the acquisition of AsiaRetail Fund Limited, as well as after the divestment of Bedok Point, the REIT’s DPU will be increased to 13.02 cents/unit (from 11.99 cents/unit) – this represents an increase by 8.59%.
  • Post-acquisition, Frasers Centrepoint Trust will become 8th largest S-REIT (in terms of market capitalization), as well as being the 8th largest S-REITs by free-float – this will result in a higher index weightage in the FTSE EPRA/NAREIT index, and this will also expand the REIT’s outreach to new investors.
  • The enlarged portfolio will also see a reduced concentration risk from any single asset (from around 30% now to no more than 22% post-acquisition.)
  • In terms of tax leakages, Mr Ng share that currently, the REIT is incurring costly tax leakages of approximately S$4.7m annually as a partial owner of AsiaRetail Fund Limited. However, post-acquisition, it will be able to reduce its tax by approximately $400k to $500k a month.
  • While post-acquisition, the REIT will see its gearing ratio increased to 39.3% (from 35.0% currently), but Mr Ng highlighted that its average cost of debt will be reduced to 2.3% (from 2.5%), and at the same time, its weighted average debt maturity will be extended to 4.3 years (from 2.3 years at present.)


Results of the Resolutions

The following are results of the 5 resolutions proposed at the EGM:

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Capturing Returns – Diversification, Concentration, or Both?

Capturing Returns – Diversification, Concentration, or Both?

Dimensional did a study on the impact of diversification on the probability of outperforming the market benchmark. In this case, they are using the MSCI All Country World Index (which you can invest with the VWRA listed on the London Stock Exchange).

Diversification - DayTrading.com

This post was originally posted here. The writer, Kyith Ng is a veteran community member and blogger on InvestingNote, with username known as kyith and has 1091 followers.

Not too long ago, there are talks that the markets have been hard-carry by the largest capitalized companies in the United States.

The worrying thing is whether this is healthy or not. I think over the years, Dimensional Fund Advisers have a few good research piece on this.

The largest holdings of the MSCI World index are currently Apple, Microsoft, Amazon, Facebook, and Alphabet. Together they make up 13.5% of the index. This is not too concentrated.

However, if we peep at the S&P 500, these 5 make up 22% of the index.

These indexes are market capitalization-weighted, which means as certain companies get stronger, their share price performs better, they get bigger, their returns drive the returns more.


Weight of the largest stocks by market capitalization in the US market from 1927 to 2019

Some companies stay on top for a long time:

  1. AT&T was the largest two for six straight decades beginning in 1930
  2. General Motors and General Electric was in the top 10 at the start of multiple decades
  3. IBM and Exxon were the mainstays for some time

Here is a clearer view:


Largest 10 stocks at the start of each decade

Prior to the 1980s, the larger companies were more dominant than today.

There is always another story to tell: There were a lot of dominant companies in the past. They dominate for decades. And now they are gone.

I am not saying that Apple, Microsoft, Amazon, Facebook, and Alphabet will falter. They have strong moats. They could stay for 3 decades and your investments in them would do well.

However, the lesson here is that its not that unsurprising for them to falter.

How Poor Would Your Performance bet if You Missed out on the Top Performers?

The FAANG stocks are represented by Facebook, Amazon, Apple, Netflix, and Google. For the past decades, if you have invested in them you would have done really well.

But how would the US broad market do without these FAANG Stocks?

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SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

SIA Rights Issue: Debunking The Complication Behind The Math (Guest Post)

Most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue. SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

This post was originally posted here. The writer, Royston Tan is a veteran community member and blogger on InvestingNote, with username known as Royston_Tan and has 17 followers.

SIA reassures cabin crew on medical leave system, Singapore News ...

SIA RIGHTS ISSUE: DEBUNKING THE COMPLICATION BEHIND THE MATHS

By now, most of you would probably have been aware of Singapore Airlines’ (SIA) plight and the need to do a massive fund-raising exercise, fully-backed by Temasek. This means that if Singaporeans are not willing to support our national carrier by subscribing to those new shares, Temasek will come in to backstop 100% of the issue.

SIA looks to raise a total amount of S$15bn (SIA Rights), through a combination of S$5.3bn in Rights Shares issuance and S$9.7bn via Rights mandatory convertible bonds or MCB for short.

S$15bn looks like a HUGE amount of equity to be raised, particularly when one compares with SIA’s key competitor Qantas which, a few days prior to SIA’s announcement, highlighted that it has managed to secure ONLY A$1.05bn in collateralized (against its fleet of 7 Boeing 787 aircraft) debt funding at an interest rate of 2.75%. Qantas share price appreciated by 26%.

Unlike SIA which has been levering up on its balance sheet to make new aircraft purchases, Qantas, on the other hand, has maintained a steady net debt balance of A$3bn over the past 3 years. Comparatively, SIA’s net debt balance has ballooned to S$8bn (including lease liabilities) as at end-2019 as a result of their aggressive fleet renewal plan.

So, Qantas (with a market cap of A$5bn) requires an additional A$1bn to tide over this major aviation crisis (for now perhaps) while SIA (now with a market cap of S$7bn) requires a potential total of S$15bn (plus S$4bn in bridging loan) and one can see the huge disparity in terms of capital management.

With that notion in place, let’s evaluate the two Rights issuance, first the SIA Rights Share followed by the SIA Rights Mandatory Convertible Bonds.

I will then follow up with 4 scenario analysis for a potential SIA shareholder and calculate what might the market value of the SIA Rights Shares and SIA Rights MCBs be worth when they start trading.

They are;

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Cromwell European REIT’s First Placement. Acquires Polish and French Offices (Guest Post)

Cromwell European REIT’s First Placement. Acquires Polish and French Offices (Guest Post)

There has been a few placements, non-renounceable rights issues and acquisitions by REITs that I cannot get through all (well by my own standards). But I thought I will just do the Cromwell European REIT one.

corn

This post was originally posted here. The writer, Kyith is a veteran community member and blogger on InvestingNote, with username known as Kyith and 700+ followers.

After the burnout work in the office in the past 2 weeks, I really do not feel like doing anything.

So this one will probably be a short one.

I have not do much homework on Cromwell, so decide to treat this as a relaxing homework of mine.

Cromwell European REIT will be purchasing:

  • 3 Freehold French Office Buildings in Greater Paris
  • 2 Freehold Office buildings in Krakow, Poland
  • 1 Freehold Office building in Poznan, Poland

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A Tale of Two REITS (Guest Post)

A Tale of Two REITS (Guest Post)

There are investors who like to base their Reit selection on two criterias: Price to Book Value and Dividend yield.
real-estate-singaporeThis post was originally posted here. The writer, D Wong is a community member on InvestingNote, with username known as Pizzaprata.

M Reit: $Mapletree Ind Tr(ME8U.SI)
S Reit: $Sabana Reit(M1GU.SI)

Based on the latest quarter’s results and closing prices:
M Reit’s P/B is 1.41 and yield is 5.7%
S Reit’s P/B is 0.76 and yield is 6.9%

From the above M Reit looks overpriced and S Reit looks attractive. Both Reits had their IPOs just one month apart in Oct/Nov 2010 with similar IPO prices of 0.93 and 0.917 respectively. That’s where the similarity ends, from the price performance chart below you can see that M Reit has doubled it’s share price since IPO while the other has dropped to less than half.

The reason is simple, M Reit has consistently improved it’s DPU every year whereas S Reit had to cut it’s DPU over the years. Therefore a good management track record is a more important criteria. So quality reits don’t come cheap and if you are hung up about P/B ratios you would never have bought M Reit as it has never dropped below its book value since IPO. Including dividends, M Reit’s total return is more than 200% so you would have missed a 3 bagger.

However past performance is no guarantee for future performance. You need to look at the Reits results in detail to see if the distributions are sustainable and what projects they are doing to increase DPU. Tomorrow I will reveal the Reits and why I accumulated M Reit last week although seasoned investors would have guessed which Reits I am talking about.

 

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