Welcome

Welcome to my investment blog where I share with you my analysis of REITs in Singapore.

I hope that my investment philosophy will bring me a steady stream of income apart from my job. I am aiming for at least $3,000 per month which can sustain the current expenses of myself and my family.

Do enjoy reading my blog and post any comments that you have. I welcome them because it is a time to learn from each other.

When I am looking at investing in REIT, here are some of the guidelines that I am looking at. Feel free to comment on it. I am willing to listen to ideas.

-> at least 8% yield.
-> Price that is lower than its NAV.
-> Low gearing (if possible)
-> High secured NAV.

Current Dividend income is $3,300/month.

Monday, March 27, 2017

Analysis of Hutchison Port Holdings Trust

Current Price on 25th Mar 2017 = $0.457
  • Yield = 7.40%  
  • Price-to-book Ratio = 0.448
  • Assets per unit = $2.359
  • Debt per unit = $1.087 (including current liabilities)
  • Gearing = 46.1%
This is the first time I am writing about Hutchison Port Holdings Trust (HPH Trust). I remember when it was first listed, I was very negative about it and true enough, the price went down and continued its journey. It recently caught my eye simply because of their NAV. Let's take a look at the statistics.

With a forward yield of 7.40%, it is quite modest and ok just that this is a business trust and it has dropped from FY2016 of 9%. Thus, the issue here is intense competition and they are quite challenged. However, their price-to-book ratio is 0.448 which means we are buying at less than half the price. This is very attractive but do remember that this is a port business and not real estate so the operation efficiency does play an important role and it varies. And moreover, HK property and business are generally valued higher than normal which Singapore investors are not really buying into it. A similar counter is Fortune REIT which is trading at a low yield but deep discount to NAV. Gearing is at 46.1% which is relatively high.

HPH Trust already operates one of the busiest ports in the world and its shares is considered blue-chip. With such a deep discount to NAV, it does makes it very attractive. However, the yield is not compelling yet. The recovery of the yield will really depends on the world economy which I am not very sure when it is going back up again.

Still considering and weighing options but definitely one of the options recently.

3 comments:

  1. Hi, I have been following your blog for 1-2 mths and I find it very useful when comes to REITs investing. I am following HPH Trust as well, but I noticed the price is USD0.405. Are you referring to USD or SGD?

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  2. Bear in mind that port operation license is renewal and is not guaranteed.
    Plus the long term concessions given by govt to manage the ports have end date ranging from 2038 to 2055. That means the assets return to govt.

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  3. hi, how did you come to the PB ratio of 0.448 ?

    ReplyDelete