Price on 19th Jan 2012 = $0.895
- Current Yield = 8.00%
- Price-to-book Ratio = 0.696
- Assets per unit = $2.221
- Debt per unit = $0.935
- Gearing = 42.1%
- Interest Cover Ratio = 5.5 times
- Secured NAV = $0.64
K-REIT Asia announced their results which to me was a bit disappointing, probably because I was overly optimistic and has made errors in my analysis.
OFC, their most recent acquisition, is encumbered which reduces their secured NAV to $0.64. I have chosen to assume it to be unencumbered. Therefore, my analysis tells me that its secured NAV is $1.011 in an earlier posting. Secondly, I have predicted their distribution to be closer to their previous quarter's distributions. It turns out wrong and its distribution is lower at 8% compared to my prediction of 8.88%.
So it turns out that I was overly optimistic when I decide to invest in it. It was a time when everyone exited and I was still sure that I was right. However, the recent price movement has suggested that it might not be so bad after all. At the very least, I have not lost my capital.
I will monitor this closely (and other REITs) to see whether is it worth it to sell and invest in other REITs. It is likely that I will wait for the next report when OFC made a full 3 month contribution before I decide.
OFC, their most recent acquisition, is encumbered which reduces their secured NAV to $0.64. I have chosen to assume it to be unencumbered. Therefore, my analysis tells me that its secured NAV is $1.011 in an earlier posting. Secondly, I have predicted their distribution to be closer to their previous quarter's distributions. It turns out wrong and its distribution is lower at 8% compared to my prediction of 8.88%.
So it turns out that I was overly optimistic when I decide to invest in it. It was a time when everyone exited and I was still sure that I was right. However, the recent price movement has suggested that it might not be so bad after all. At the very least, I have not lost my capital.
I will monitor this closely (and other REITs) to see whether is it worth it to sell and invest in other REITs. It is likely that I will wait for the next report when OFC made a full 3 month contribution before I decide.
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