Analysis of LippoMalls Retail Trust - Is the worst over?

Current Price on 30th May 2019 = $0.215

• Yield = 10.23%  
• Price-to-book Ratio = 0.718
• Assets per unit = $0.712
• Debt per unit = $0.412 (including current liabilities and perpetual securities)
• Gearing = 57.9%

LMIR is an Indonesian REIT which has a lot of bad news because of its parent trying to raise cash, which leads to LMIR acquiring property from Lippo Group. Details of the funding are still not out yet. But let's take a look at the statistics currently.

With a yield of 10.23%, it is the highest yielding REIT on SGX and it is very difficult to have acquisition can be yield accretive. I guess they need to use more debt which I doubt so because their gearing is already at 57.9% (including perpetual securities) Its price-to-book ratio is 0.718 which means we are buying at 28% discount which is also attractive. However, the problem is that the gearing is very high at 57.9% including perpetual securities. It will be great if it could reduce its gearing but equity is very expensive for LMIR.

For LMIR, the rupiah is finally relatively stable and I am not expecting rupiah to drop further. Therefore, its DPU should now be stable. For now, the key is managing debt rather than acquisition. If they are able to reduce their gearing or reduce their interest expenses, it will be very helpful to DPU.

I have just bought another 150,000 shares at $0.21, increasing my shareholdings to 180,000, giving me a potential return of $330 per month. Will be increasing my holdings soon once they start their rights issue.