Greeting! Last August, we saw US market had a mid correction of about 20% from the high of 12,724 to low of 10,720. At the time I write this mail, US market close at 11,614, seem it's stable right now and we will going to enter the last phase of bull run. The down grade of USD had caused market imbalance where people pull money out from US market and put into Gold market, causing gold price hit record high. Whereas China government tighten the money policy to avoid hot money coming into their country.
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I expect Hong Kong market will move higher if US fund come into Asia in next few months and Asia region will have positive impact. Anyway, always respect the trend, make trend as your best friend, never against it.
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Last month, some clients bought glove stock when the market went down. If I were to buy glove stock, will choose the industry's best performance... in this case, my first choice is Hartalega. The reason is, this is one of the company with profit keep on growing, unlike others glove company where their profit in decreasing trend.
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Some clients bought TENAGA, it's a blue chip counter and almost near the bottom (some snippets about TENAGA). One can buy TENAGA every day to average down if he have a lot of money. What if TENAGA keep on falling in next 1 month, 3 month or 6 month? Since this guy keep on buying TENAGA when the price goes down, his cost will become less and less. If I were to buy TENAGA, I will check with this guy what is his cost for the last 1 months after averaging down. I will only buy when TENAGA's market price is equal or above his cost for last 1 month. (this will avoid buying too soon when the share price keep on falling)
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You may ask how to find this guy to ask for his cost for last 1 month? The answer is simple, take the 30 days Moving Average line compare with current market price, got it? Some also bought CIMB and got stuck there because buying too soon, hence the safer way is using my above method. (*try to record down your trade)
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Last, if you going to buy any stock, at least must meet below 2 conditions:
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1. The company must making profit (profit must stable and keep on increasing is the best)
2. The company must have a dividend policy, distribute the dividend of at least same or better than FD. (It's better to have goose that keeps laying eggs (golder egg is even better) than a goose that sit there and doing nothing.)
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Tuesday, September 27, 2011
Investment Idea - Aug 2011
Let see what's happen in US recently, after the long debate, finally the US government agreed to raise the debt ceiling . What's debt ceiling? It's a self imposed limit on Treasury's ability to borrow. Never mind! Who cares, history always repeat itself. Since 1945, the ceiling has been raised 87 times, it's almost no impact to the market after few months.
Parkinson's law states, “Expenses always rises in direction proportion to the income” In general, as income goes up, expenses almost will follow go up too. This is happening every where, almost every countries' government like to print more money... it's better to keep goods price going up, all properties and asset goes up, so everybody feel more happy.
In theory, share price will going up too... in fact, US market already in the up trend for more than 2 years and 5 months now. Normally, the up trend will reverse after 2.5 to 3 years. Investor reposition their holdings, shares change hand from week investor to strong investor (long term investor). After some time, market will go up again. (because history always repeat itself)
What's the meaning of reposition ? Example, Susan bought a house for $300k few years ago. Now the market price is $600k, Susan decide to build a passive income machine. Hence, she sell the house and take the money to buy REIT and some blue chip stock which gave dividend yield of about 8% and capital gain in long term. Another example is sell A stock and buy B stock. (be careful with this approach, as some investors sell good stock and buy the bad stocks)
Many would like to know if now it's good time to buy stock. My opinion is, yes, as “hot money” printed will flow to Asia (since US and Europe both having fear factor), however, do not predict the market direction. Strong investors prepare to hold for long terms, hence buying good stock is the main condition to success in investment, especially blue chip stock if discount by 10% or more.
Last, someone ask me if any market tips... I say no... but MBSB ($1.64) and GENM ($3.66) worth to take a look if the price drop, it's in my buying list. Please note this is my personal view, not a recommendation to buy. Last time when I recommend a stock, someone sent me a mail, state that he's going to invest $100K and want me to sign agreement with him that I will pay him back $100k if his investment fall in value. Please, even Warren Buffet did a mistake to pay high for certain stock, the money is yours, you have full responsibility to decide if want to invest or not.
Strong investors always keep building net worth in mind. Building passive income flow and buying good asset or stocks at a discount price is a priority. The goal is made the money work hard, so one day you can choose no need to work or work because you choose it, not because of necessity.
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Parkinson's law states, “Expenses always rises in direction proportion to the income” In general, as income goes up, expenses almost will follow go up too. This is happening every where, almost every countries' government like to print more money... it's better to keep goods price going up, all properties and asset goes up, so everybody feel more happy.
In theory, share price will going up too... in fact, US market already in the up trend for more than 2 years and 5 months now. Normally, the up trend will reverse after 2.5 to 3 years. Investor reposition their holdings, shares change hand from week investor to strong investor (long term investor). After some time, market will go up again. (because history always repeat itself)
What's the meaning of reposition ? Example, Susan bought a house for $300k few years ago. Now the market price is $600k, Susan decide to build a passive income machine. Hence, she sell the house and take the money to buy REIT and some blue chip stock which gave dividend yield of about 8% and capital gain in long term. Another example is sell A stock and buy B stock. (be careful with this approach, as some investors sell good stock and buy the bad stocks)
Many would like to know if now it's good time to buy stock. My opinion is, yes, as “hot money” printed will flow to Asia (since US and Europe both having fear factor), however, do not predict the market direction. Strong investors prepare to hold for long terms, hence buying good stock is the main condition to success in investment, especially blue chip stock if discount by 10% or more.
Last, someone ask me if any market tips... I say no... but MBSB ($1.64) and GENM ($3.66) worth to take a look if the price drop, it's in my buying list. Please note this is my personal view, not a recommendation to buy. Last time when I recommend a stock, someone sent me a mail, state that he's going to invest $100K and want me to sign agreement with him that I will pay him back $100k if his investment fall in value. Please, even Warren Buffet did a mistake to pay high for certain stock, the money is yours, you have full responsibility to decide if want to invest or not.
Strong investors always keep building net worth in mind. Building passive income flow and buying good asset or stocks at a discount price is a priority. The goal is made the money work hard, so one day you can choose no need to work or work because you choose it, not because of necessity.
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Investment Idea July 2011
It's come to the mid of the year, many fund manager are busy reposition their investment holding. Overall the market condition still in good shape as almost all the index breaking new high record, especially for Malaysia and US Market. While the Index continue to move higher, do you able to make good return in Stock Market?
One of my client ask me to help him find out why his investment portfolio continue making loses of more than 28%! He wish if he had follow my advise six months ago, today his portfolio could have been reverse. After reviewed with him, I did shared with him for reasons and he think it would be good to shares with all, I do feel the same as learning from others experience is a great advantage. Below are top 5 stock in his portfolio:
HWGB: cost 73 cent, loss 45%
Sanbumi: cost 39 cent, loss 36%
Mieco: cost 78 cent, loss 32%
Pworth: cost 70 cent, loss 30%
MAA: cost RM1.33, loss 48%At first glance, these are not so call investment grade stocks, only suitable for trading, not for Investment! So, if want to trade this kind of counters, make sure you have the trading plan – a plan spell out clearly if the stock drop by 5%, need to cut loss or what? (in his case, he can not cut loss because he think one day the price will rebound, but I can tell, the chance is very slim) If earn by 15%, need to take profit... (in fact, many of the stocks managed to make some profit at first, but he just too greedy and without plan, hence miss the boat) If you want to go North, but notice the train you in now is moving South, shouldn't you get down immediately to avoid further regret? Direction or purpose of investing is quite important!
Ok, now forget about his portfolio, do you know what's the reason for one portfolio continue to make money? Just refer to my previous post: http://vincpetrol.blogspot.com/2011/07/investment-idea-june-2011.html
Investment is similar to buying a business, investor need to think like business owner. In the long run, buying Investment Grade stock is better than buying so so company, especially the current environment, only the best company have better chance to survive in next 10 or 20 years. Below simple check list to filter best company:
1. Make sure that stock you buy give dividend (at least 2x FD rate is even better)
2. Try to choose top Malaysia's company in the Industry
3. The Stock must have Institutional support (find like EPF, mutual fund, pension fund or foreign investment fund, find out usually buy)
4. The great business must able to increase in profit (with ROE & ROA of more than 10%)
5. Last, buy at low price to have margin of safety (you may buy it now or wait for Market pullback to take advantage of cheap price)
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One of my client ask me to help him find out why his investment portfolio continue making loses of more than 28%! He wish if he had follow my advise six months ago, today his portfolio could have been reverse. After reviewed with him, I did shared with him for reasons and he think it would be good to shares with all, I do feel the same as learning from others experience is a great advantage. Below are top 5 stock in his portfolio:
HWGB: cost 73 cent, loss 45%
Sanbumi: cost 39 cent, loss 36%
Mieco: cost 78 cent, loss 32%
Pworth: cost 70 cent, loss 30%
MAA: cost RM1.33, loss 48%At first glance, these are not so call investment grade stocks, only suitable for trading, not for Investment! So, if want to trade this kind of counters, make sure you have the trading plan – a plan spell out clearly if the stock drop by 5%, need to cut loss or what? (in his case, he can not cut loss because he think one day the price will rebound, but I can tell, the chance is very slim) If earn by 15%, need to take profit... (in fact, many of the stocks managed to make some profit at first, but he just too greedy and without plan, hence miss the boat) If you want to go North, but notice the train you in now is moving South, shouldn't you get down immediately to avoid further regret? Direction or purpose of investing is quite important!
Ok, now forget about his portfolio, do you know what's the reason for one portfolio continue to make money? Just refer to my previous post: http://vincpetrol.blogspot.com/2011/07/investment-idea-june-2011.html
Investment is similar to buying a business, investor need to think like business owner. In the long run, buying Investment Grade stock is better than buying so so company, especially the current environment, only the best company have better chance to survive in next 10 or 20 years. Below simple check list to filter best company:
1. Make sure that stock you buy give dividend (at least 2x FD rate is even better)
2. Try to choose top Malaysia's company in the Industry
3. The Stock must have Institutional support (find like EPF, mutual fund, pension fund or foreign investment fund, find out usually buy)
4. The great business must able to increase in profit (with ROE & ROA of more than 10%)
5. Last, buy at low price to have margin of safety (you may buy it now or wait for Market pullback to take advantage of cheap price)
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Sunday, July 17, 2011
Investment Idea - June 2011
Middle East, Europe and Japan almost all down last month. China market was flag, US also went down for nearly thousand points close at around 12,000 last week and investors is waiting for outcome of QE2 ending in Jun 2011.
Back to our home, Malaysia “Boleh”, last few week when all countries were down, Bursa Index close at high end. One of the reason could be Malaysia being included into Advance Index Country start from Jun 2011. Anyway, we will not going to predict the market, as we know whether the market up or down, our “best in class” stock will continue to perform well.
For those who are new, below our stock price as of last week and return since last 6 months (I am different from other Dealer/ Remisier, as normally they recommended the stock, but never invest, just for your info, I invested all the below stocks)
REITs : up by 5% plus dividend of 7%
Maybank : RM9 (up by 12% plus dividend of 6%)
Public Bank : RM13 (up by 8%, plus dividend of 4%)
Maxis : RM5.50 (up 5% plus dividend of 5%)
GENM : RM3.60 (up 10% plus dividend of 2%)
Batu Kawan : RM17 (up 5% plus dividend of 3%)
F&N : RM19 (up 20% plus dividend 5%)
Pchem : RM7 (up 12%)
MHB : RM8.60 (up 40%)
TWS : RM10.50 (up 35%)
Tenaga : RM6.70 (up 9%, plus dividend 2%)
We see the investment as portfolio, instead of individual stock, overall, the portfolio given return of 14.5%, this is fix into our investment objective of “ Invest for consistent Stable Income ”, we are not here trying to speculate for biggest return with high risk. Among these stocks, 3 of them, TWS, Pchem and MHB are counters suitable for trading.
Question from one of my client, what happen if market crash and I still hold all these stocks? My answer, if market down, it provide more opportunities, that's the beauty of the stock market provided you are invest in “best in class” stock, beside you still receive consistent dividend income. For example, if you bought a stock at RM5, then price down by 50% and now the stock price at RM2.50. Say you buy it again at RM2.50, few months later when the price up to RM5, your return is 100% for this 2 nd portion. If take the 2 average, your return now is 50%.
That's why market down is actually opportunities for those who prepared, with condition, invest in ' best in class ” stock!
Sunday, July 10, 2011
REITs more appealing in uncertain times
Below article appeared in The Edge Financial Daily, June 29, 2011 - talk about Al-Aqar and AmFirst REIT
Prices for real estate investment trusts (REITs) have been holding up quite well despite weakness in the broader market and this may well remain the case in the near to medium term. With outlook for the global economy and equity markets turning more opaque in recent weeks, the defensive characteristics and higher-than-market average yields offered by REITs are understandably becoming more appealing.
Al-Aqar’s incomes are fairly recession-proof
The Al-Aqar KPJ REIT is among the better-performing of the REITs listed on the local bourse. It is also among the larger REITs, with total assets valued at more than RM1.16 billion. Perhaps more significantly, it is also widely seen as having one of the more recession-proof earnings streams.
For instance, whilst occupancy and rental incomes particularly that for commercial property-heavy REITs may come under pressure from oversupply in the next few years, incomes for Al-Aqar are by and large protected under its long-term leaseback arrangements with KPJ Healthcare. Its typical lease agreements are for a period of 15 years with the option to renew for a further 15 years.
The longer-term outlook for the overall healthcare industry in the country is positive, with steady demand growth expected from both the local population as well as the rising number of medical tourists. Steadily rising demand and costs of healthcare services would in turn support gradual rental income increases under the trust’s long-term lease agreements — which would translate into progressively higher income and distribution to unit holders.
Al-Aqar is on track to meeting its target income distribution of 8.25 sen per unit this year. The trust’s turnover was up 16.9% year-on-year (y-o-y) to RM20.1 million for 1Q11 boosted by contributions from two assets acquired in 2H10, the KPJ Tawakkal Specialist Hospital and a new building at KPJ Johor Specialist Hospital.
The trust declared a 3.3% unit income distribution, which should be paid before the completion of the proposed acquisitions — and issuance of new units — currently pending.
Prices for real estate investment trusts (REITs) have been holding up quite well despite weakness in the broader market and this may well remain the case in the near to medium term. With outlook for the global economy and equity markets turning more opaque in recent weeks, the defensive characteristics and higher-than-market average yields offered by REITs are understandably becoming more appealing.
Al-Aqar’s incomes are fairly recession-proof
The Al-Aqar KPJ REIT is among the better-performing of the REITs listed on the local bourse. It is also among the larger REITs, with total assets valued at more than RM1.16 billion. Perhaps more significantly, it is also widely seen as having one of the more recession-proof earnings streams.
For instance, whilst occupancy and rental incomes particularly that for commercial property-heavy REITs may come under pressure from oversupply in the next few years, incomes for Al-Aqar are by and large protected under its long-term leaseback arrangements with KPJ Healthcare. Its typical lease agreements are for a period of 15 years with the option to renew for a further 15 years.
The longer-term outlook for the overall healthcare industry in the country is positive, with steady demand growth expected from both the local population as well as the rising number of medical tourists. Steadily rising demand and costs of healthcare services would in turn support gradual rental income increases under the trust’s long-term lease agreements — which would translate into progressively higher income and distribution to unit holders.
Al-Aqar is on track to meeting its target income distribution of 8.25 sen per unit this year. The trust’s turnover was up 16.9% year-on-year (y-o-y) to RM20.1 million for 1Q11 boosted by contributions from two assets acquired in 2H10, the KPJ Tawakkal Specialist Hospital and a new building at KPJ Johor Specialist Hospital.
The trust declared a 3.3% unit income distribution, which should be paid before the completion of the proposed acquisitions — and issuance of new units — currently pending.
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On top of the list is the acquisition of four properties — for Bandar Baru Klang Specialist Hospital, Kluang Utama Specialist Hospital and two hospital buildings in Indonesia — valued at a combined RM159.9 million. This would be the REIT’s first acquisition of properties outside Malaysia. The purchase would be financed by the combination of RM104 million cash and issuance of 56.6 million new units.
The trust is also in the midst of acquiring an aged care facility and retirement village in Brisbane, Queensland, Australia, valued at RM135 million. To part finance this purchase, up to 64 million new units will be issued.
The acquisitions will expand its earnings base, although the overseas acquisitions will also carry a certain degree of risks, including foreign exchange risks.
Currently, the REIT has 20 properties valued at RM1.1 billion. Upon completion of the proposed acquisitions, the total investment properties of Al-Aqar will rise to roughly RM1.4 billion. Assuming the deals are completed by end-2011, income distribution is estimated to rise to about 8.3 sen per share in 2012, based on the enlarged units in circulation of 704.3 million. That translates into a gross yield of roughly 7.1% at the current unit price of RM1.17.
Unit prices for Al-Aqar have gained about 14% since the beginning of June 2010, giving investors pretty good returns totalling roughly 21% including yields.
Expectations of oversupply in commercial space may weigh on rental outlook
By comparison, AmFIRST REIT has performed less well over the past one year — its unit price rising by just about 3% over the same period. This could be attributed in part to concerns of oversupply of commercial properties in the Klang Valley.
The trust is expected to report a decline in income for the current financial year ending March 2012, weighed down by low occupancy rates at two of its properties, the Kelana Brem Tower and Menara Merais.
For FY11, AmFIRST’s income was lifted by a one-off income of RM5.7 million in compensation for the compulsory acquisition of land in front of Summit Subang USJ. Without this item, we estimate income for distribution will decline to roughly 8.4 sen per unit from 9.75 sen in the previous financial year.
Still, that translates into a fairly attractive gross yield of 7.2% at the current price of RM1.17. We suspect the relatively high yield has prevailed after taking into account the probability of further downside risks in terms of rentals and occupancy, in view of current expectations for a softer market for office buildings.
Positively, the successful acquisition of the two proposed assets is expected to boost earnings for FY13. AmFIRST is in the midst of acquiring two office buildings in Cyberjaya, expanding its portfolio of assets outside the Klang Valley for the first time.
The two properties, known as Prima 9 and Prima 10, are valued at RM72 million and RM61 million, respectively. The purchase will expand the trust’s portfolio of assets under management to eight, valued at a combined RM1.16 billion from the current RM1.02 billion. Both properties are expected to achieve 100% occupancy at the point of completion of the purchase secured by long-term lease agreements with multinational companies.
No new units will be issued as the acquisition will be funded entirely by borrowings, which will raise its gearing to about 45.8% from the current 38.9%. Income for distribution in turn is estimated to rise to roughly nine sen per unit, boosting gross yield to 7.7% at the prevailing unit price.
The trust is also in the midst of acquiring an aged care facility and retirement village in Brisbane, Queensland, Australia, valued at RM135 million. To part finance this purchase, up to 64 million new units will be issued.
The acquisitions will expand its earnings base, although the overseas acquisitions will also carry a certain degree of risks, including foreign exchange risks.
Currently, the REIT has 20 properties valued at RM1.1 billion. Upon completion of the proposed acquisitions, the total investment properties of Al-Aqar will rise to roughly RM1.4 billion. Assuming the deals are completed by end-2011, income distribution is estimated to rise to about 8.3 sen per share in 2012, based on the enlarged units in circulation of 704.3 million. That translates into a gross yield of roughly 7.1% at the current unit price of RM1.17.
Unit prices for Al-Aqar have gained about 14% since the beginning of June 2010, giving investors pretty good returns totalling roughly 21% including yields.
Expectations of oversupply in commercial space may weigh on rental outlook
By comparison, AmFIRST REIT has performed less well over the past one year — its unit price rising by just about 3% over the same period. This could be attributed in part to concerns of oversupply of commercial properties in the Klang Valley.
The trust is expected to report a decline in income for the current financial year ending March 2012, weighed down by low occupancy rates at two of its properties, the Kelana Brem Tower and Menara Merais.
For FY11, AmFIRST’s income was lifted by a one-off income of RM5.7 million in compensation for the compulsory acquisition of land in front of Summit Subang USJ. Without this item, we estimate income for distribution will decline to roughly 8.4 sen per unit from 9.75 sen in the previous financial year.
Still, that translates into a fairly attractive gross yield of 7.2% at the current price of RM1.17. We suspect the relatively high yield has prevailed after taking into account the probability of further downside risks in terms of rentals and occupancy, in view of current expectations for a softer market for office buildings.
Positively, the successful acquisition of the two proposed assets is expected to boost earnings for FY13. AmFIRST is in the midst of acquiring two office buildings in Cyberjaya, expanding its portfolio of assets outside the Klang Valley for the first time.
The two properties, known as Prima 9 and Prima 10, are valued at RM72 million and RM61 million, respectively. The purchase will expand the trust’s portfolio of assets under management to eight, valued at a combined RM1.16 billion from the current RM1.02 billion. Both properties are expected to achieve 100% occupancy at the point of completion of the purchase secured by long-term lease agreements with multinational companies.
No new units will be issued as the acquisition will be funded entirely by borrowings, which will raise its gearing to about 45.8% from the current 38.9%. Income for distribution in turn is estimated to rise to roughly nine sen per unit, boosting gross yield to 7.7% at the prevailing unit price.
Investment Idea - May 2011
Overall, market is on the up trend for almost 2 years without any meaningful correction. Right now, near all time high. What's happen in middle East, Europe and Japan fail to bring down the market , this is an indication that the market sentiment is still strong.
Bursa Malaysia's Index going to be included into Advance Index Country start from Jun 2011. This is good news but only if you buy the correct counters which prefer by foreign investors. Bank Negara also raised the interest rate and bank's reserve for the first time. As expected, since the market cycle comes to 3rd years, normally interest rate will start to go up as monetary policy goes from loose to tight. We expect interest rate will go up few rounds before the end of market cycle. This action is similar to China, and if there's any indication, just see how the China's index's perform, it almost side way for few months with a little bit of bias upward. Bear in mind if foreign investors come in, they will only select the blue chip solid counters.
Bull market is not going for long, next few months is time to play safe. IPO is one of the option can try... we will have few good one to come... I will keep you update when time come. Some of counters like F&N, Nestle, Dlady, BAT start to go higher, because many investors move their fund to these counters.
I have been recommended F&N in last few months when it was RM14.50, this counter never fail me since 10 years ago. Many clients told me this counter was very expensive, really? If you see today's price, RM18++ even more expensive, what I trying to say here is the 'Value' of the company, not the share price. Someone also mentioned YHS (RM1.7+) is better, since it's cheaper than F&N.
Below some points for both companies:
F&N RM18, PE 22
EPS on up trend, about 5% every year
DPS is about 55Cent
ROA 10
ROE 19
YHS RM1.7+, PE 22
EPS not stable, for past 5 years, 2 years in red.
DPS is about 10 cent
ROA 1.05
ROE 1.5
Both companies are good but quite expensive, with PE of 22 (normally PE above 15 is consider expensive, but for solid company, you need to pay some premium), YHS profit is not very stable, some years in red, also F&N's ROE is 19 excellent, meaning every 4 or 5 years, the profit will double! (that's why share price double too) Hence, if you just looking for dividend, YHS is not bad, but if you looking for growth with dividend slightly less, then F&N is better option. (no need to buy it now... but keep in the list, buy only if market crash!)
This is one of my idea to share on how we choose a good company for investment.
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Tuesday, June 14, 2011
Investment Idea - April 2011
It's near time to submit personal Income Tax Self Assessment, remember to claim back your 25% of dividend by submitting HK3 form if you own shares that paid dividend with 25% deducted as income tax. While I went through all the dividend records, noticed there's one advantage for DRP.
What is the advantage DRP to investor?
Click here , if want to know more.
Recently, also receive some inquiry about new IPO, BoilerMech Holding Berhad. Many want to know if worth to apply or not. My answer, you can try to apply this counter through IPO. (the closing date is 21 APR 2011, http://www.boilermech.com ) The major share holder for this company is QL, hence investor can invest BoilerMech or directly invest into QL's share. QL suitable for long term investor, with ROE of 21%, if it can grow with the same rate, every 4 years the profit will double. (by theory, the share price will double as well, this had been shown in the past record)
Recently, also receive some inquiry about new IPO, BoilerMech Holding Berhad. Many want to know if worth to apply or not. My answer, you can try to apply this counter through IPO. (the closing date is 21 APR 2011, http://www.boilermech.com ) The major share holder for this company is QL, hence investor can invest BoilerMech or directly invest into QL's share. QL suitable for long term investor, with ROE of 21%, if it can grow with the same rate, every 4 years the profit will double. (by theory, the share price will double as well, this had been shown in the past record)
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Market Update March 2011- Market Fluctuations Are an Opportunity
Not long ago, market start to slow down, couple of incidents happen in Middle East Asia follow by Japan's earthquake, all these gave the reason for the market to start the correction. For experience investor, they know that every 1 to 2 years, for market to go down 10% or 20%, is a norm. Every 4 to 5 years, there will be a financial crisis where market down for 30%. (which we already went through in 2008)
So, what's hot now? Timber and Glove making company going to benefit! For short term, share price of these companies will go up. However, chasing this hot stock is only suitable for short term trader who prepare to cut loss in case if market not move as per their expectation. If you are the person who feel hard to cut loss, please do not consider the hot stock, instead buy only the 5 Star rating company .
For long term investment purpose, remember, it's 5 Star that we should consider. Early March 2011, we have another company, Transmil going burst in Bursa, this remind me, never buy any trouble company, even it's cheap, what's the point for us to buy cheap if the company can not survive and go burst?
The 5 star investment rating company's check list:
1. Is the company having ROE and ROA of more than 15?
2. Is the company earning increase in the past three years?
3. Is the management honest?
4. Is the company's financial position healthy, do they borrow a lot of money?
5. Do you have margin of safety, buy at low PE?
6. Do you plan to buy more if the share price of the company going down?
So, what's hot now? Timber and Glove making company going to benefit! For short term, share price of these companies will go up. However, chasing this hot stock is only suitable for short term trader who prepare to cut loss in case if market not move as per their expectation. If you are the person who feel hard to cut loss, please do not consider the hot stock, instead buy only the 5 Star rating company .
For long term investment purpose, remember, it's 5 Star that we should consider. Early March 2011, we have another company, Transmil going burst in Bursa, this remind me, never buy any trouble company, even it's cheap, what's the point for us to buy cheap if the company can not survive and go burst?
The 5 star investment rating company's check list:
1. Is the company having ROE and ROA of more than 15?
2. Is the company earning increase in the past three years?
3. Is the management honest?
4. Is the company's financial position healthy, do they borrow a lot of money?
5. Do you have margin of safety, buy at low PE?
6. Do you plan to buy more if the share price of the company going down?
Investment Idea - Mar 2011
Last few months, we talk about price increased for Petrol, Gas and Sugar. Many want to know how to take advantage of this. On my Jan's mail, I also suggested at least 3 good stocks that will benefit from this price increase, they are TWS, Pchem and MHB. (refer to below my Jan's mail)
This is not a tips, I just share my thought on how to pick good stock that will benefit from current economy scenario. Again, to remind all, the first thing bear in mind is:
Ask yourself what's the company's business, how's the company making money in the past? (if company not making profit, just forget about it) Can they still making money more than before in the next 10 years?
For example, TWS ($7.20 on Jan), we know it's the plantation stock, so plantation is hot, especially all commodity price going high. There are so many plantation stocks list on Bursa, what's so special about TWS? Last year, TWS's profit came from Palm Oil and Sugar, but this year it going to make profit from rice as well after took over PadiBeras. This is something like the plane suddenly put on additional engine, of course it will fly high after quarterly result announcement.
Similar to MHB and Pchem, the current high oil price will going to benefit these company. (remember, not any oil and gas company, we need to choose the best) PM. Najib have mentioned, he want to make the nations rich, one of the way is through Oil and Gas industry to make Malaysia regional hub. In short to medium term, these company will show very good profit.
Two more company, Tenaga (RM6.23) and GENM(RM3.31) can keep in your watch list. I am not telling you to buy now, but time will come for it's share price to fly. You may monitor it until one day when it start to move, just buy it without hesitate.
Last, never buy a stock base on rumour or tips. Remember to do your own research, internet is very convenience now.
Thursday, April 28, 2011
Investment Idea - Feb 2011
In the beginning of Feb, our local market show some small correction, this create many opportunities. I do share the a topic at my blog:
Buy when stock price up or when stock price down? (remember, the choice is yours if you not agree with my point)
My view, it's very dangerous to average down (buy when it continue to go down). The best is buy when the price start to go up after the share price find the bottom. But how to do that?
Today, I am going to share with you how I do this. For those who are interested, register an ID in Stock Games at CIMB web site:
Select Tools --> Stock Games
Many will ask, why play Stock Games? This is my secret weapon where it help me to Buy Low and Sell High.
Let say you plan to buy a X stock at $2.80, so when first day down it hit 2.80, sign on Stock Game and buy @ $2.80 for 1000 share. Use Stock Game to "average down", the more it down, the more you buy. So, when you buy it with real money? I will keep on buying with Stock Game until one day if I notice the X stock start to move higher 7% from my lowest buying record.
Let's assume X stock move all the way down in few days:
$2.80 ----> Stock Game buy
$2.58 ----> next day, use Stock Game buy again
$2.39 ----> buy with Stock Game
$2.22 ----> buy again with Stock Game
$2.25 ----> Buy with Stock Game, the stock price rise a bit, but no action, as it rise less than 7% from previous buy point
$2.01 ---> Buy again with Stock Game
$2.21 ---> Buy with Stock Game & REAL MONEY
We use the Stock Game to buy with Cost Averaging Down Method (never use this method with Real Money, as you might end up losing all without cut loss) and buy with Real Money at $2.21, although we can not buy at the lowest, but it's more safe to start accumulate when stock start the up trend again. So you can now decide how many shares you want to buy with Real money and continue to add even the price move up to $2.30 or $2.40. (you need to add fast, as many experience trader always act fast) I think it's more cheaper if you buy at first down of $2.80.
You can do the same when stock move up very high at time when you want to sell.
.
Monday, April 25, 2011
Investment Idea - Jan 2011
It's come to beginning of the year 2011, the best time to plan for our investment strategy. There are many ways to invest in stock market, but we always should remember Rules number one, “Not to Lose money in Stock Market”. Here to share with you some of the method use by investors:
One of the way is buy for dividend, investor can consider good stock which pay high dividend such as REITs and Banking stock. (Maybank or Public Bank) This type of investor are happy with return better than FD in bank, capital gain of course is just additional bonus.
If someone bought Maxis last year, today the price is still around RM5.35, no lose or gain. However, he earn the dividend pay by Maxis about RM0.28. Smart investor may think that he do not want to lost opportunities as many other good stock are actually moving up. He may opt to sell Maxis and buy other counters but keep Maxis in the list, until one day if the stock price moving up, he will buy again.
For some investors who want to take a ride on the current Super Bull, can buy the counter with clear up trend. Someone ask me what's the stock on your list now? I gave him 3 stock name last week and he was quite happy with it:
Pchem RM5.90
MHB RM6.01
TWS RM7.20
If you want to chase these 3 stocks, still no problem, go ahead, but beware to sell when market start to turn down. Investor can choose if he want dividend or ride on the Super Bull.
Happy Investing!
Investment Idea - Dec 2010
Dear investor,
Sugar, Petrol and Gas price going to increase again, meaning another round of inflation is coming, we can benefit from our investment as well!
Choose the Industry leader that going to benefit the most among the same industry! Never buy the industry loser. (the loser can go burst anytime)
For example, AirAsia and MAS was showing good result, then we can consider invest in AIRPORT. (just check the price of AIRPORT, it already more than double since last year)
Another example, sales of vehicle improved, UMW, Honda, Toyota, Proton all shown good result, but all cars need to pay for TOLL company, hence we can consider PLUS.
This is the idea of how we choose best of the best. (I am writing this not to tell you to buy AIRPORT or PLUS right now, it just example how we set the investment strategy)
Last week, CIMB research mentioned about KLK, a leader in Palm Oil industry. There are many points mentioned on the research report, you may refer the attachment. If I were to invest in KLK, I will buy Batu Kawan instead of KLK. The reason is because Batu Kawan hold 46.57% of KLK, meaning:
1 BKAWAN share = 1.1628 KLK share + “Others Assets”
Batu Kawan price at RM16.30 as of last Friday, KLK is RM21.38. Hence, Batu Kawan having great value than KLK. What happen if Batu Kawan share price going down? For sure I will buy more if the price fall below RM16. (never buy the stock if you dare not buy more when the price go down, it's the indication you don't understand the company or not choosing the great company)
p/s: this is not recommendation to buy any stock, the intention is to show the way of choosing great business, as many just choose the cheap instead of choose the value! I plan to invest in Batu Kawan and keep it for 3 years!
.
Sugar, Petrol and Gas price going to increase again, meaning another round of inflation is coming, we can benefit from our investment as well!
Choose the Industry leader that going to benefit the most among the same industry! Never buy the industry loser. (the loser can go burst anytime)
For example, AirAsia and MAS was showing good result, then we can consider invest in AIRPORT. (just check the price of AIRPORT, it already more than double since last year)
Another example, sales of vehicle improved, UMW, Honda, Toyota, Proton all shown good result, but all cars need to pay for TOLL company, hence we can consider PLUS.
This is the idea of how we choose best of the best. (I am writing this not to tell you to buy AIRPORT or PLUS right now, it just example how we set the investment strategy)
Last week, CIMB research mentioned about KLK, a leader in Palm Oil industry. There are many points mentioned on the research report, you may refer the attachment. If I were to invest in KLK, I will buy Batu Kawan instead of KLK. The reason is because Batu Kawan hold 46.57% of KLK, meaning:
1 BKAWAN share = 1.1628 KLK share + “Others Assets”
Batu Kawan price at RM16.30 as of last Friday, KLK is RM21.38. Hence, Batu Kawan having great value than KLK. What happen if Batu Kawan share price going down? For sure I will buy more if the price fall below RM16. (never buy the stock if you dare not buy more when the price go down, it's the indication you don't understand the company or not choosing the great company)
p/s: this is not recommendation to buy any stock, the intention is to show the way of choosing great business, as many just choose the cheap instead of choose the value! I plan to invest in Batu Kawan and keep it for 3 years!
.
Market Update after Petronas Chemical IPO
First, would like to congra those who got the IPO shares of Petronas Chemicals, the shares will be listed on 26 Nov 2010 .
Today, got another breaking news, S. Korea and N. Korea seem to start the War. If the War really happen, what should we do as investors? To me, this will be the opportunity, as in my past 16 years at stock market, there are few of them, Gulf War, Iraq War, 911 ... the fact is, stock market going up again after the incident.
Below strategy that I used and let me share it to you:
- This is time to be real investor, only invest in great business (profit with high return) that we understand.
- Treat you are buying a business, not buying a stock
- Avoid company with high debt and accounting fraud
- The company's profit should be in cash and predictable
- Do not think of buying stock for 5 minutes if you are not prepare to invest for 5 years
I like to share points on my blog, as human is forgetful (that's why Market always up and down), so I write down all the points so that it will remind me what to do when I faced the similar problem in future and I don't mind to share with all who really understand and would like to success in stock market.
Below my latest blog:
1. Do not too emotion in stock Market
2. Petronas Chemical Part 1
3. Petronas Chemical Part 2
4. Asia top 200 best companies
5. How to build retirement income for life
Happy Investing!
.
Today, got another breaking news, S. Korea and N. Korea seem to start the War. If the War really happen, what should we do as investors? To me, this will be the opportunity, as in my past 16 years at stock market, there are few of them, Gulf War, Iraq War, 911 ... the fact is, stock market going up again after the incident.
Below strategy that I used and let me share it to you:
- This is time to be real investor, only invest in great business (profit with high return) that we understand.
- Treat you are buying a business, not buying a stock
- Avoid company with high debt and accounting fraud
- The company's profit should be in cash and predictable
- Do not think of buying stock for 5 minutes if you are not prepare to invest for 5 years
I like to share points on my blog, as human is forgetful (that's why Market always up and down), so I write down all the points so that it will remind me what to do when I faced the similar problem in future and I don't mind to share with all who really understand and would like to success in stock market.
Below my latest blog:
1. Do not too emotion in stock Market
2. Petronas Chemical Part 1
3. Petronas Chemical Part 2
4. Asia top 200 best companies
5. How to build retirement income for life
Happy Investing!
.
Monday, February 28, 2011
介于产业与股票之间 产业投资信托股
Mon, 17 Nov 2008 - 冷眼分享集 - updated data on 1 Mar 2011
当你驾车经过吉隆坡市区，仰望高楼大厦时，你心里是否曾经这么想：假如我拥有一座这样的大厦，收取租金，长期有稳定的收入，那是多么理想的事。市中心的办公大楼，每座动辄以亿令吉计，有能力购买的人，毕竟少之又少。但这不等于你与这些大楼无缘。通过购买产业投资信托股票，你其实也有机会拥有这类大楼的 一部分——尽管只是微不足道的一部分。
在马来西亚股票交易所挂牌的上市公司中，就有一类叫产业投资信托股(REITS)。由于这类股票上市的历史最短，又只有区区的14 家，投机气氛不如别类股票那么热络。所以一般投资者都不大注意。实际上，假如你留意的话，你一定会发现，这类股票的周息率(D/Y，就是股息回酬巴仙率)，比大部分股票都高。
REITS 就是REAL ESTATE INVESTMENT TRUSTS 的缩写，中文为产业投资信托股。历史悠久收入稳定这类股票在外围股市有相当长的历史，也是寻求稳定收入的投资者的宠儿。这类公司的营业模式其实很简单：它收集了投资大众的资金，以收购大宗的商业性产业，如办公大厦、购物中心、工厂、酒店等等，交由一家产业管理公司去管理，管理公司负责收租及维 修建筑物，从租金中扣除管理费后，将结存的租金净额分发给投资者。
政府规定：产业投资信托公司必须将90%以上的租金，分发给信托股股东。为了鼓励更多产业信托公司成立，当局规定，信托股的股息只需缴税10%。产业投资信托股的概念其实很简单，收集大量的资金，以收购大宗产业供出租，把收到的租金分发给信托单位持有人。这其实跟单位信托大同小异，只不过单位信托投资于股票，而产业信托投资于产业而已。产业投资信托为有意投资产业的人士提供了另一条投资管道，不但更容易做到，手续也更简单。
让我们比较买屋子和买产业投资信托股的优劣点：
大马产业信托(AMFIRST)昨天公布本财务年上半年的业绩，半年每单位净利为4.87 仙。该信托宣布把盈利全部发给股东，每股派息4.87 仙。假如该信托下半年保持上半年的表现，则全年每单位净赚9.75 仙，该信托曾许下诺言，在未来三年中，将全部盈利派给股东，则每单位股息为 8.775仙(已扣税)。
以该信托目前1.17 仙的股价计算，周息率为7.5%，比定期存款的利息高两倍。假设你有计划买屋子作为投资，又假设你的投资额为50 万令吉，假如你以50 万令吉在八打灵购买一间双层排屋出租，每月可收到租金1 千500 令吉。假如你以每股1.17 仙，买进大马产业信托股票，50 万令吉可买到RM500,000÷RM1.17=427,300 股，以每股8.775 仙的股息计算，你一年可以收到RM37,495 的股息，平均每个月的股息收入为RM3,124 令吉，比排屋租金高两倍。
不单是大马产业信托，其他产业信托股，以目前的股价买进，大部分都可以取得7%以上的周息率，其中亚天产业信托(ATRIUM)，以目前1.02 仙左右的股价计算，周息率高达8.58%。产业信托的股息回酬比产业租金高，而风险则比股票低，可说是介于产业与股票之间的投资产品。
假如你手头有多余的资金，一方面担心股票的风险太高，另一方面又嫌定存和买屋收租回酬太低，一个折衷的办法，是购买产业投资信托股票。回酬高于定存利息但在买进之前，最好对全部14 家产业信托股，进行研究，比较各家所拥有的产业、租户是谁、租金回酬率、负责数额，以及每单位预期可得之股息。作个比较之后，再从中选择你最有信心的股项，买进作为长期投资，可以赚到比定存利息高两倍的回酬。
当你驾车经过吉隆坡市区，仰望高楼大厦时，你心里是否曾经这么想：假如我拥有一座这样的大厦，收取租金，长期有稳定的收入，那是多么理想的事。市中心的办公大楼，每座动辄以亿令吉计，有能力购买的人，毕竟少之又少。但这不等于你与这些大楼无缘。通过购买产业投资信托股票，你其实也有机会拥有这类大楼的 一部分——尽管只是微不足道的一部分。
在马来西亚股票交易所挂牌的上市公司中，就有一类叫产业投资信托股(REITS)。由于这类股票上市的历史最短，又只有区区的14 家，投机气氛不如别类股票那么热络。所以一般投资者都不大注意。实际上，假如你留意的话，你一定会发现，这类股票的周息率(D/Y，就是股息回酬巴仙率)，比大部分股票都高。
REITS 就是REAL ESTATE INVESTMENT TRUSTS 的缩写，中文为产业投资信托股。历史悠久收入稳定这类股票在外围股市有相当长的历史，也是寻求稳定收入的投资者的宠儿。这类公司的营业模式其实很简单：它收集了投资大众的资金，以收购大宗的商业性产业，如办公大厦、购物中心、工厂、酒店等等，交由一家产业管理公司去管理，管理公司负责收租及维 修建筑物，从租金中扣除管理费后，将结存的租金净额分发给投资者。
政府规定：产业投资信托公司必须将90%以上的租金，分发给信托股股东。为了鼓励更多产业信托公司成立，当局规定，信托股的股息只需缴税10%。产业投资信托股的概念其实很简单，收集大量的资金，以收购大宗产业供出租，把收到的租金分发给信托单位持有人。这其实跟单位信托大同小异，只不过单位信托投资于股票，而产业信托投资于产业而已。产业投资信托为有意投资产业的人士提供了另一条投资管道，不但更容易做到，手续也更简单。
让我们比较买屋子和买产业投资信托股的优劣点：
大马产业信托(AMFIRST)昨天公布本财务年上半年的业绩，半年每单位净利为4.87 仙。该信托宣布把盈利全部发给股东，每股派息4.87 仙。假如该信托下半年保持上半年的表现，则全年每单位净赚9.75 仙，该信托曾许下诺言，在未来三年中，将全部盈利派给股东，则每单位股息为 8.775仙(已扣税)。
以该信托目前1.17 仙的股价计算，周息率为7.5%，比定期存款的利息高两倍。假设你有计划买屋子作为投资，又假设你的投资额为50 万令吉，假如你以50 万令吉在八打灵购买一间双层排屋出租，每月可收到租金1 千500 令吉。假如你以每股1.17 仙，买进大马产业信托股票，50 万令吉可买到RM500,000÷RM1.17=427,300 股，以每股8.775 仙的股息计算，你一年可以收到RM37,495 的股息，平均每个月的股息收入为RM3,124 令吉，比排屋租金高两倍。
不单是大马产业信托，其他产业信托股，以目前的股价买进，大部分都可以取得7%以上的周息率，其中亚天产业信托(ATRIUM)，以目前1.02 仙左右的股价计算，周息率高达8.58%。产业信托的股息回酬比产业租金高，而风险则比股票低，可说是介于产业与股票之间的投资产品。
假如你手头有多余的资金，一方面担心股票的风险太高，另一方面又嫌定存和买屋收租回酬太低，一个折衷的办法，是购买产业投资信托股票。回酬高于定存利息但在买进之前，最好对全部14 家产业信托股，进行研究，比较各家所拥有的产业、租户是谁、租金回酬率、负责数额，以及每单位预期可得之股息。作个比较之后，再从中选择你最有信心的股项，买进作为长期投资，可以赚到比定存利息高两倍的回酬。
Tuesday, February 8, 2011
Axis Reit - Higher income to follow?
Below article appeared in The Edge Financial Daily on January 28, 2011.
The two acquisitions pending completion are for a warehouse-office (D8, Port of Tanjung Pelepas) in Johor and an office building (Axis Eureka) in Cyberjaya for a combined RM81.2 million.
Furthermore, the trust is planning to add five more logistics warehouses in Johor and the Klang Valley as well as two more office blocks in Cyberjaya — estimated to be worth some RM365 million in the current year. It is also looking at the acquisition of Axis Technology Centre 2, consisting of a 6-storey office block, single-storey warehouse and car parks.
Some of the asset enhancements currently underway are the upgrade/facelift for Crystal Plaza, Fuji Xerox and Infinite Centre as well as the expansion of some 7,000 sq ft of net lettable area for a new penthouse level in Menara Axis. Other enhancements on the drawing board for the current year include that for the Cycle & Carriage complex and Kayangan Depot.
Income distribution expected to rise further in 2011
As such, we expect its earnings will continue to trend higher in 2011, lifted by full-year contributions from the five properties acquired last year as well as partial contributions from proposed new asset purchases this year.
Distribution per unit in the current year is estimated at roughly 17.5 sen per unit. That would earn unitholders a relatively attractive yield of 7.4%. Axis REIT is currently trading at roughly 1.2 times its net asset value of RM2.01 per unit.
Axis REIT has done quite well in terms of expanding its assets portfolio over the past few years and, as a result, has been gradually raising its income distribution to unitholders. We expect this trend to continue in the current year. Based on the estimated distribution of 17.5 sen per unit for 2011, investors will earn a fairly attractive gross yield of 7.4% at the prevailing price of RM2.36.
Expanding assets portfolio
It was the first real estate investment trust (REIT) to be listed on the Bursa Malaysia in August 2005 and was reclassified as an Islamic REIT in December 2008. The trust focuses primarily on assets within the office and industrial sectors. Its properties are located in Petaling Jaya, Shah Alam, Klang, Prai, Johor and Kedah.
From the initial five properties on listing, Axis REIT now owns and manages 26 properties worth over RM1.16 billion. Five properties were acquired last year, including two logistics warehouses in Seberang Prai that were completed in 1Q10. The latest acquisitions — Tesco Hypermarket in Johor, Axis PDI Centre and Axis Technology Centre — were completed in 4Q10.
The trust’s earnings have been expanding in tandem. Income before tax (excluding fair value adjustments for assets) has grown steadily, from RM26.4 million in 2006 to RM52.6 million last year. In 2010, Axis REIT successfully renegotiated an average rental increase of 8.9% for leases due during the year, which accounted for some 18.5% of the total net lettable area under its management.
The value of its portfolio of properties too has been trending higher. For instance, in 2009 the trust recognised revaluation gains of some RM19.1
Expanding assets portfolio
It was the first real estate investment trust (REIT) to be listed on the Bursa Malaysia in August 2005 and was reclassified as an Islamic REIT in December 2008. The trust focuses primarily on assets within the office and industrial sectors. Its properties are located in Petaling Jaya, Shah Alam, Klang, Prai, Johor and Kedah.
From the initial five properties on listing, Axis REIT now owns and manages 26 properties worth over RM1.16 billion. Five properties were acquired last year, including two logistics warehouses in Seberang Prai that were completed in 1Q10. The latest acquisitions — Tesco Hypermarket in Johor, Axis PDI Centre and Axis Technology Centre — were completed in 4Q10.
The trust’s earnings have been expanding in tandem. Income before tax (excluding fair value adjustments for assets) has grown steadily, from RM26.4 million in 2006 to RM52.6 million last year. In 2010, Axis REIT successfully renegotiated an average rental increase of 8.9% for leases due during the year, which accounted for some 18.5% of the total net lettable area under its management.
The value of its portfolio of properties too has been trending higher. For instance, in 2009 the trust recognised revaluation gains of some RM19.1
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million. The valuation for its stable of properties rose by another RM45.6 million last year.
Investors made smart gains
REITs are typically viewed as low risk investments with relatively slow capital appreciation. Their main attraction is steady, higher than market average yields. Nonetheless, unitholders for Axis REIT have not done too shabbily relative to the benchmark index, the FBM KLCI, over the past year.
Indeed, investors in the REIT would have made a capital gain of 22% since the start of 2010. Over the same period, the FBM KLCI was up 19%. Including the income distributed totalling 16 sen per unit for 2010, unitholders would have made returns totalling 30%.
More yield accretive acquisitions in the pipeline
Axis REIT intends to stick to its strategy of acquiring yield accretive properties whilst promoting rental growth for existing assets through enhancements.
For the current year, there are three transactions pending completion including its first asset disposal. The trust is in the midst of completing the sale of North Port Logistic Centre for RM14.5 million on expectations that the property has limited upside to future rental growth. The sale will net gains totalling RM760,000. The trust intends to re-deploy the proceeds towards more yield accretive properties.
Investors made smart gains
REITs are typically viewed as low risk investments with relatively slow capital appreciation. Their main attraction is steady, higher than market average yields. Nonetheless, unitholders for Axis REIT have not done too shabbily relative to the benchmark index, the FBM KLCI, over the past year.
Indeed, investors in the REIT would have made a capital gain of 22% since the start of 2010. Over the same period, the FBM KLCI was up 19%. Including the income distributed totalling 16 sen per unit for 2010, unitholders would have made returns totalling 30%.
More yield accretive acquisitions in the pipeline
Axis REIT intends to stick to its strategy of acquiring yield accretive properties whilst promoting rental growth for existing assets through enhancements.
For the current year, there are three transactions pending completion including its first asset disposal. The trust is in the midst of completing the sale of North Port Logistic Centre for RM14.5 million on expectations that the property has limited upside to future rental growth. The sale will net gains totalling RM760,000. The trust intends to re-deploy the proceeds towards more yield accretive properties.
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The two acquisitions pending completion are for a warehouse-office (D8, Port of Tanjung Pelepas) in Johor and an office building (Axis Eureka) in Cyberjaya for a combined RM81.2 million.
Furthermore, the trust is planning to add five more logistics warehouses in Johor and the Klang Valley as well as two more office blocks in Cyberjaya — estimated to be worth some RM365 million in the current year. It is also looking at the acquisition of Axis Technology Centre 2, consisting of a 6-storey office block, single-storey warehouse and car parks.
Some of the asset enhancements currently underway are the upgrade/facelift for Crystal Plaza, Fuji Xerox and Infinite Centre as well as the expansion of some 7,000 sq ft of net lettable area for a new penthouse level in Menara Axis. Other enhancements on the drawing board for the current year include that for the Cycle & Carriage complex and Kayangan Depot.
Income distribution expected to rise further in 2011
As such, we expect its earnings will continue to trend higher in 2011, lifted by full-year contributions from the five properties acquired last year as well as partial contributions from proposed new asset purchases this year.
Distribution per unit in the current year is estimated at roughly 17.5 sen per unit. That would earn unitholders a relatively attractive yield of 7.4%. Axis REIT is currently trading at roughly 1.2 times its net asset value of RM2.01 per unit.
Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.
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