Monday, January 18, 2021

Added: Fortune REIT (HK 778) - Power of Neighbourhood malls

 


Bought 17,000 shares of Fortune REIT on 18 Jan at HKD 7.14.

This is my first oversea stock outside of SGX.



Reasons for buying:

1) Dividend 6.6%

Fortune Reit will be declaring their semi annual dividend soon and will go XD in Feb 2021


2) PB 0.47


3) 2014 price

Put aside 2020 Covid year, the last time it trade at low HKD 7+ is in year 2014



4) Power of Neighbourhood malls

In Singapore, we have king of Neighbourhood mall Frasers Centrepoint Trust.

In Hong Kong, we have Fortune REIT.





5) Impressive Purchase price vs Current Valuation



6) Divestment at 48% & 89% premium



7) Managed by ARA & Sponsor is CK Asset Holding Ltd



Related post: 

1) Added: Frasers Centrepoint Trust

2) Added: HongKong Land USD (Aug 2020)

Friday, January 15, 2021

FIRST REIT: Buy & Sold 83,200 shares within 3 days (Part 3)

 



Bought 83,200 shares of FIRST REIT on 13 Jan at $0.24

Sold 83,200 shares of FIRST REIT on 15 Jan at $0.255

Average price per share dropped from $1 -> $0.64 -> $0.58 (Remain same capital cost $48,000 amount). 




First Reit released their Full Year result yesterday 14 Jan.

Result is within expectation, nothing surprising if you have been following their announcement update since 2020.



Why I sell it today?

The uncertainly outcome of the EGM on 19 Jan.

If EGM got the Green light, high chance I will be able to buy at near 20 cents from open market.

If EGM got rejected, high chance the share price will drop further.

Given the risk reward ratio, safer to stay on the sideline and wait for the EGM result.



For existing shareholders who intending to keep this stock in cold storage [due to massive loss :( ], you might want consider selling at least 60% of your holdings on Mon (last chance) before the EGM to lower your risk.

If EGM got the green light, at least you have the capital to subscribe to rights (including excess).

If EGM got rejected, at least your lost amount is lower (assuming share price will drop further).

Objective for doing so if you want to lower your average share price like what I am doing.


If you are lost on this post, read this and this first.



Related post:

1) SIAS - First REIT Virtual Dialogue Session key highlight

2) Increased my FIRST REIT from 48,000 shares to 75,300 shares 

3) FIRST REIT: 75,300 -> 0 shares (Part 2)

4) First REIT AGM 2020

5) Added: FIRST REIT (Jan 2020)

6) Added: FIRST REIT (Jan 2020) again


Friday, January 8, 2021

SIAS - First REIT Virtual Dialogue Session key highlight

SIAS - First REIT Virtual Dialogue Session was conducted on 7th Jan 5pm.



You can view the recording here and Q&A here.



Key Highlight

3 main issues:

  • First Reit foresee that Lippo Karawaci (LK) will default as LK have been in negative cashflow since 2015 [LK contribute 72.1% of rental income]
  • Unable to refinance as Bank are not lending due to concerns over LK (Deal breaker)
  • Soon to expire of 5 Master lease by end 2021

The board had looked through all options such as divestment of asset and concluded that rights is the best options due to the short timeline.

Legal procedure option will be lengthy (Time), Costly and Complicated.

Divestment option will not be ideal as bid price received will not be attractive due to COVID.

New operator option is not ideal as existing infrastructure might not suit new operator 

  

Rights is urgently needed, else LK will have a vey high chance of default.




If approval was not obtained during EGM (to be held on 18 Jan Mon):

There is no Plan B 



Post rights (If approved during EGM):

Gearing will drop to 34%

No loan repayment in 2021

OUE Limited might have a near 60% ownership if assuming they take up all the unsubscribed rights, thus resolution 2 is needed for.

Restructure, Recapitalization and Reposition to become FIRST REIT 2.0



FIRST REIT 1.0 (Current) --------------------------> FIRST REIT 2.0 (Post rights)

Concentrated risk                                                                 Diversify

Unsustainable                                                                        Sustainable

Potential default                                                                   Avoid default

WALE 7.4 years                                                                    WALE 12.6 years

Uncertainty                                                                            Clarity 

Lack of confidence from shareholders                               Instill shareholders confidence




Related post:

1) Increased my FIRST REIT from 48,000 shares to 75,300 shares

2) FIRST REIT: 75,300 -> 0 shares (Part 2)

3) First REIT AGM 2020

4) Added: FIRST REIT (Jan 2020)

5) Added: FIRST REIT (Jan 2020) again