Posted by Zhan Yi > 2014-07-01 02:57 | Report Abuse

The NAV per unit of YTL Hospitality REIT as at 31 March 2014 is RM0.9957

3 months 26 %, what a great properties bubble, or accounting strategy, or currency translation, or whatever reason. This is why Robert kiyosaki books state that he want to be a insider who drive the boat. For a small shareholder, nothing we can understand, we just one of the passenger. but I believe the name "YTL" but not "Vincent Tan" not "Ananda", privatise 7 eleven within nine month, privatise maxis during low price. And I believe YTL = (PBB) TEH HONG PIOW.

A simple calculation, during march NAV=RM1, around 1.2b units = 1.2 bil. than total borrow = 56%(previous article) mean total asset = 1.2b/44*100=2.7bil, borrowing = 2.7bil-1.2bil=1.5b. so now NAV = 1.26 so total 1.2b unit * 1.26=1.5b, "HAHA".. now total asset = 3bil. and borrowing 1.5bil dept/3bil asset = 50%
comply real estate investment trust rule, no need more units placement..

is this a joke? hopefully my calculation is wrong..

Posted by Zhan Yi > 2014-07-01 03:03 | Report Abuse

CANTONESE " NGAO LAN SOU"

Posted by Ng MC Angie > 2014-07-01 23:55 | Report Abuse

Why price not increase but is in opposite way

Posted by kkng0819kk > 2014-07-02 14:51 | Report Abuse

Ngao lan sou or ngau lan soup?

Posted by Greenpower > 2014-07-07 13:23 | Report Abuse

eh, this reit no power at all.

Posted by kkng0819kk > 2014-07-08 20:04 | Report Abuse

Bagi ooms sikit

Posted by kkng0819kk > 2014-07-10 17:36 | Report Abuse

Bila mau bayar div lagi?

Posted by samT > 2014-07-22 23:01 | Report Abuse

To all ,

I accumulated YTLREIT since year 2009 and currently my holding is about 1,500,000 shares.

I would like to take this opportunity to share my analysis on this stock for your reference.

Few areas that we can look into

1. What is the impact of the private placement and why investors react negative to it ?

YTLREIT distribute at least 90% of the cash to shareholder as dividend at quarterly basis. For the past , the distribution was 100% but for the last few quarter , was fluctuate between 90% to 97% , why ?

YTLREIT cash income ( included depreciation as depreciation are non cash item ) at about 8.8 sen per share. If fully distributed , will yield 9.56% per share based on stock price of RM0.92 , which is one of the highest as compare to other REIT.

With the private placement of RM800MM , YTLREIT will save interest of ~ RM38,000,000 ( at 4.75% interest ) but due to the number of share significantly diluted , the DPU will reduce.

assume private placement at RM1 per share

(RM0.088 * 1,325,000,000 +38,000,000)/ ( 2,125,000,000 ) = RM0.0728

which is 17% lower as compare to before private placement

Investors with DCF method will adjust the stock price accordingly based on the reduction of DPU by ~ 17% and the stock price retreat from a fair value of about RM1.10 to ~ RM0.94.

The management of YTLREIT track record is to maintain the DPU in upward trend , therefore , the dividend payout ratio has been adjusted monthly to maintain the dividend payout at ~ 7.5 sen ( DY = ~ 8% at RM0.92 stock price ) , which factor in the private placement effects.

Therefore , barring any unforseen circumstances , the dividend will not be lower than 7.5 sen ( before witholding tax ) per year.


2. Why YTLREIT go for private placement ?

One of the plan shared by the management to the public was the ambitious to increase asset under management to RM10B in mid to long term , taking opportunity of bargain asset price when US QE ended and rising of interest rate and most likely asset will be selling at bargain price. Therefore , the private placement and increased of borrowing limit to 60% is to prepare for this objective.

There are few possible scenarios that might happen in the future..

With current NAV at RM1.26 and YTL committed for RM320,000,000 of the private placement , the management will able to raise RM1,400,000,000 in debt to purchase hotel asset and this will raise the DPU back to RM0.088 assuming the assets with fixed return of 7% and borrowing cost of 4.75%

My thought is that the asset purchase under this phase will be hospitality asset under YTL which is not included in YTLREIT like Majestic KL , Majestic Melaka , hotel in Hokkaido , Shanghai etc..which total to about RM1.4B

at 2nd phase , when the private placement was fully place out up to RM800,000,000 , YTLREIT will able to raise another RM700,000,000 to purchase new hospitality asset , DPU will go up to RM0.095 per share ( assume 7% return , debt cost at 4.75% )

To achieve 10B in asset , NAV need to go up to RM1.78, which I believe will able to achieve in 5 years or less due to leverage effects

example , assume 50% asset and 50% debt , when the asset value up by ~10% , the total NAV will up by 20%.

When the asset up to RM10B without further equity dilution , the DPU will go up to RM0.12 per share ( assume 7% return and 4.75% borrowing cost )

Based on above assumption , YTLREIT stock price with potential to achieve RM1.50 in 5 years time based on DPU increase from current 7.5 sen to the future of 12 sen per share. This represent a potential of compounded return of 18% through dividend reinvestment.


3. What is the risk with YTLREIT

Interest rate risk - if interest going up , will strongly effect the borrowing cost and reduce DPU

Foreign exchange risk - fluctuation of foreign currency will affect YTLREIT income. or example , AUD fluctuate to as low as 1AUD to 2.89MYR and back to 1AUD to 3.03MYR last quarter ( therefore , last quarter distribution was slightly better even at 90% distribution )
If foreign currency depreciate significantly against MYR , YTLREIT return will be strongly affected.


As my target return is minimum 10% compounded return per year , YTLREIT meet my investment mandate for Core in my portfolio.

Posted by my101home > 2014-07-23 00:15 | Report Abuse

There are certain parts I could not get it. However, I agree to most part of your analysis. Great input, hope to read your view again.

Posted by Wave > 2014-07-23 00:15 | Report Abuse

SamT many thanks for the elaboration and it has enlighten me. I will continue to accumulate this stock.

Posted by samT > 2014-07-23 00:42 | Report Abuse

Thanks for the compliment. YTLREIT is quite a straight forward stock with less corporate activities. I will add my input whenever any announcement furnish to the bursa.

For those retire and looking for passive income , YTLREIT might be a good alternative and can practice 50 : 50 strategy. 50% reinvest for more shares and 50% for spending.

Posted by sheep > 2014-07-23 01:17 | Report Abuse

WHY GOING UP BITS BY BITS? INCREASED DIV COMING?

Posted by samT > 2014-07-23 10:01 | Report Abuse

Hi Sheep , I believe most likely market anticipate some announcement coming on new asset purchase and earning per share ( excluding depreciation as non cash item ) back to the previously level of ~ RM0.088 per share. This will restore the confident and revaluation of stock price back to previous level.

Posted by MultiBillionaire > 2014-07-23 20:27 | Report Abuse

this stock wont go far.. stagnant is expected.......

Posted by samT > 2014-07-23 21:15 | Report Abuse

YTLREIT is low beta stock and the stock will be quite stable and will adjust according to corporate proposal . Positive proposal such as asset purchase to enhance DPU to move the stock price up while negative proposal like private placement that dilute the DPU will adjust the stock price down. If a proposal to purchase more assets that drive the DPU back to previous level of RM0.088 , we should expect the stock price to go back to ~ RM1.10 level when the corporate proposal completed.

Posted by Kent > 2014-08-01 09:12 | Report Abuse

Continuously 3 quarter giving dividend more than EPS, I personally don't feel good about it. Probably need to watch this counter for a longer time. It is under my watch list but I haven't owned any shares by now.

Posted by freecooper > 2014-08-01 12:11 | Report Abuse

how come declare dividend before announcing Q report?

Posted by haikeyila > 2014-08-01 15:27 | Report Abuse

divvy from borrowings. playing with fire.

Posted by Zhan Yi > 2014-08-01 21:11 | Report Abuse

wow! huat liao jit bai.

Posted by Zhan Yi > 2014-08-01 21:59 | Report Abuse

yes may be dividend from borrowing, but Guys must not able study well cash flow statement. Is time to study account and make good investment.
cash generate from operation..
operating expenses.
management fee.
and most important
*depreciation.
*amortisation.

and you will know why dividend more than EPS.

in not sure 2010 or before starhill selling to "starhill global reit" get revalue 270+mil count in earning.

this months also the revalue some properties 300mil.. I think we will get a surprising earning this quarter but of cause not distributable.

i also don't know why this reit not like others reit revalue every year. if any expert like samT can help me.

Posted by sheep > 2014-08-01 22:19 | Report Abuse

till now still no quarterly result? how come? can meh?

Posted by Rick Ng > 2014-08-01 22:30 | Report Abuse

i remember ytlreit no issue q4 result as a norm. it will release annual report i think on aug or september.

Posted by Alphabeta > 2014-08-02 21:37 | Report Abuse

The accounting treatment of assets under REITs are mostly classified Investment Properties, hence there is no depreciation charged. YTL REIT Australia Hotels are classified as PPE, as such there are depreciation charged in the P/L.

The correct parameter to compare the REIT performance should be earning before interest, tax, depreciation & amortization (EBITDA).

Posted by Alphabeta > 2014-08-02 21:54 | Report Abuse

Another concern is whether the operating cash flow in sufficient to cover interest (including loan principal repayment in future) and dividend payments.

YTLREIT high debt level is definitely a concern esp when the prospect of future interest rate hike will definitely impair its ability to continue current dividend policy.

Posted by kkng0819kk > 2014-08-04 09:01 | Report Abuse

Kutip div dulu n cabut later

Posted by chongkonghui > 2014-08-04 10:56 | Report Abuse

YTLREIT, For 9M ended 31.03.2014

Cashflow generated from Operation RM137m
Net Interest expense RM54m - RM2m = RM52m

Cash in hand reduced by RM18m (before forex)

Posted by kkng0819kk > 2014-08-04 11:20 | Report Abuse

Satu tahun 4 kali div.boleh tahan

Posted by kkng0819kk > 2014-08-05 12:07 | Report Abuse

Div better than asn,syabas!

Posted by kkng0819kk > 2014-08-21 13:41 | Report Abuse

Asw dividend 6.6 sen only

Posted by dylontn > 2014-08-22 16:11 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1717413
Annual report

Posted by kmchua888 > 2014-08-22 16:48 | Report Abuse

Performance for fiscal year ending June 2014 is much better than earlier year.

Posted by pulsarJ > 2014-08-24 11:24 | Report Abuse

Retail and hospitality -- a lot of differences between them?

Posted by pulsarJ > 2014-08-24 23:09 | Report Abuse

Now, for those who thinks I'm in the dark about the etymology of hospitality and the sanatorium, don't.

Posted by jenjenkho > 2014-09-02 12:53 | Report Abuse

y the Dividend not credit yet?

Posted by kkng0819kk > 2014-09-02 17:40 | Report Abuse

Naik sikit sikit

Posted by kkng0819kk > 2014-09-05 10:42 | Report Abuse

Naik perlahan lahan!

Posted by ckgoh3 > 2014-09-06 14:59 | Report Abuse

keep going up, people starting to appreciate this counter!

Posted by kkng0819kk > 2014-09-08 10:15 | Report Abuse

Satu ringgit hari ini

Posted by ejtic > 2014-09-13 07:58 | Report Abuse

sikit sikit lama lama jadi gunung....

Posted by Wave > 2014-09-29 17:22 | Report Abuse

please be gentle and slow ya YTLREIT

Posted by Mao Lim > 2014-10-01 14:24 | Report Abuse

$1.01, $1.02 is this a potential breakout to the upside?? possibly $1.4??

Posted by kkng0819kk > 2014-10-01 16:20 | Report Abuse

Sudah cabut lo

Posted by Wave > 2014-10-01 21:01 | Report Abuse

$1.4?? no way man! I am accumulating it. Please do not do that on me!

Posted by Mao Lim > 2014-10-02 10:53 | Report Abuse

hahaha lets start the accumulation process!!

Posted by heeweihan > 2014-10-02 14:51 | Report Abuse

Breached my average price. Need to stop accumulating first:)

Posted by ejtic > 2014-10-04 13:59 | Report Abuse

Swee Swee boh chow chooi...

Posted by Te Yang > 2014-10-05 12:04 | Report Abuse

This coming december they will announce the status of right issue, i think its share price will drop drastically at that moment.

Posted by assaji > 2014-10-07 15:01 | Report Abuse

Te Yang, don't be sour grapes. It is not too late. "As of Oct 03, 2014, the investment analyst covering YTL Hospitality REIT advises that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts deteriorated on Jul 23, 2013. The previous consensus forecast advised investors to purchase equity in YTL Hospitality REIT."
http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=YTLREIT:KLS

Posted by assaji > 2014-10-07 15:09 | Report Abuse

The one analyst offering a 12 month price target expects YTL Hospitality REIT share price to rise to 123.00 in the next year from the last price of 1.04.
http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=YTLREIT:KLS

Posted by BZ888 > 2014-10-07 16:13 | Report Abuse

Thanks for the sharing, shall hold on the shares then =)