Analysis of LippoMall Retail Trust

Current Price on 16th Feb 2015 = $0.35

• Yield = 8.11%  
• Price-to-book Ratio = 0.789
• Assets per unit = $0.779
• Debt per unit = $0.335 (including current liabilities)
• Gearing = 43.0%
• Secured NAV = $0.444 (127% of trading value)

LippoMalls Retail Trust has recently reported their results which are quite favourable and prompts me to think through my strategy again.

Their yield is currently at 8.11% which is one of the highest. Moreover, their price-to-book ratio is one of the lowest at 0.789 which means I am getting properties at 22% discount. The most important thing is that their secured NAV is at $0.444 which is higher than the trading price. In fact, 100% of their properties are currently unencumbered.

I have read an article which discuss about the recent bond which will mature soon and they haven't quite resolve the issue yet. It is a $200 million MTN due in July 2015. This is a concern and helps to depress the trading price. But I am quite sure that it will be resolved soon because they do have a strong sponsor i.e. Lippo which is the larger developer in Indonesia. Indonesia economy has also been doing well with strong domestic demand.

I am in the process of waiting for some of my money to be routed back to me and I will purchase this once I get it back. I won't be able to reach the dividend in time but it may not be a bad thing.