Note: Not vested.
A few things caught my attention.
The unwinding of the CCS is over (October), it is 8 months earlier than when they first projected it to be done by June 2015.
From the latest results, CCS costs is 3 mio, and 2.1 mio and 1.8 mio in Q2 and Q1. There is a acceleration in unwinding, yet DPU is increasing since Q1, despite further AUD currency weakness in Q3 compared to Q2.
Its operation in Australia (Biggest Contributor) is going from strength to strength since Q1
Occupancy rate is 78.5%; 84.3% to the latest quarter of 87.3%
Average room rate is $165; $162 to the latest quarter of $184.
Lets annualized Q2 results (more conservative) without the effect of CCS instead, we would get
(1.46 x 4 ) / 70, there would be a yield of 8.3%. Look pretty cool to me.
Assume a further 10% fall in AUD, resulting in a corresponding 10% fall in NPI. We get DPU of 4.6 cents just from Australia operations, and at Q3, Australia forms only 67% of total NPI.
At such, barring sudden and steep deterioration of hotel operations, we are looking at a yield of 7.5% to 8.3% for the next 2 years.
However AHT has several risks.
1) Its debts are rather concentrated over the next 3 years, from 2016 to 2018. Assume a 1.5% increase in the refinancing of 173 mio in 2016. It is going to make more than a dent to NPI since AHT is rather heavily geared.
2) If Tax exemption for overseas properties are not extended come March 2015, then its horrendous although I do not think it will be a issue.
Given I am already rather heavily vested at the moment, I will just keep my eyes open but hands away from this one. Unless, its shares prices continue to go down and LMIR continue to go up, I might then do some re-balancing and diversification while keeping the portfolio size intact.
Looks like good buy? But I have 45 lot stamford ld already.ReplyDelete
But i dont have any Reits. Should I buy some?
U ask me? LOL, I have no answers. If I say hoot big big, will u do it?
You have your answers, just be confidence and trust yourself.
The BT headlines is about the fall in DPU, yet made no mentioned about the winding down being over. If it fall significantly come Monday, then it will really get interesting, and my rebalancing hope might come true
Well. I will do my homework tonight.
See whether i want to buy or not.
I have too much holding now. Wish to trim down my portfolio size. No lack of money. Just feel that I have too much holding.
But beside singtel, ocbc n hock lian seng. I have no others else to sell leh. All these 3 are good shares. Sell liao hard to buy back so low price.
Should I? Hahahaha
I belived given the fact that u have a big warchest and that your cash is growls every month, u do have to be always thinking about "locking in" profits.
Sure, lock in profits for those u think are overvalued because growth is going to be limited etc, catalysts all build in etc...
The reason to sell should be already in place when you buy...
Excluding cost of unwinding cross currency swap, YTD dpu is 4.43 cts. Annualised it will be 5,90 cts. At closing price of $0.695, yield is 8.5%. Is there anything wrong with my numbers, pls correct me. Vested in AHT.
Hi stock hunter,Delete
I didn't used YTD, I annualized Q2 results without swap costs. I thought Q3 results in terms of operation at Australia is perhaps too strong to expect it to be always recurring. But 0.2 % yield difference is not great.
The greatest risk is interešt risk. I do not believe AUD will "crash" and a 10% fall is ok, but we cannot say the same for 1.5% increase in interešt cost
Hi if i recall i read somewhere that the foreign property tax hoilday if withdrawn will not apply to the foreign property that the reit already own. It will only apply to new foreign property acquired after the end date when ever that is decidedReplyDelete
U read it from B blog.
But it doesn't matter, AHT has only 1 property in Singapore. It would mean it's future growth is going to be affected. The next acquistion is going to offset the impact of expenses, interešt, dilution and tax. It is going to be very tough to be accretive.
Hoever, I do see the tax holiday to be extended for another 5 years
What is the poiny of attracting foreign reits to listed here and then smacking them with the expiry, also, many of our own S- reits has properties overseas too.
There will be plenty of explaining to do if the decided to retired that.
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