I am not sure why Mr Market is giving it a double thumb down, except that it might be feeling depressed.
It went to as low as 30.5 cents. I accumulated in 34 cents, and will be willing to accumulate further at 30 cents, plus minus a few bids.
The latest considerations shares is nothing new, except that the price will be at a minimum of 38 cents. Thus, the maximum of shares to be issue and hence dilution and can be assured.
When I did my sums in my previous post, I already
1) take into consideration the dilution of both consideration shares and placement shares and both at the price of 34 cents
2) Take into consideration Pluit village is going to be around 80% occupied instead.
What are the possible risks then, to distribution?
1) Further weaknesses in operation and occupancy in the rest of the malls
2) Sharp increase in interest rate since they have debts due for financing in the next three years.
It is up to one to decide if indeed 1) and 2) is killing LMIR. Operation numbers in IDR terms has indeed been weak in recent quarters as compared to a year ago. And if the most recent advance distribution is any guide, it is getting weaker. But I am using the weak operating numbers in my calculation.
I look at the Kemang village development:
The residential developments are almost fully sold. Of course, fully sold does not mean fully occupied, but unsold means unoccupied, which is worse. There are another 2 phases of developments in the area.
I also further give a 10% discount to the expected NPI Kemang mall should generate from the pro forma
I believed, I have already heavily discount operation weakness, and found the high 7% yield to be decent and reasonable.
The further weakness could mean 8% yield is now in sight.
Of course, what I am doing is just looking at the knowns knowns, there could be unknowns unknowns.