@allanchong1988 = Cheah family sold about 25 million shares only. (each person must give separate notices to the company) After selling, they still have 1,230 million shares or 42%.
They sold about 2%. The DY for the SREITS is about 5.7%. Perhaps they found some other biz can provide a higher return than 5.7%.
Refer to Sunreit AR 2016 Part 1 Page 58 under message from CEO, the capital management section stated clearly that the average cost of debt is 3.93% and the ratio of fixed rate borrowings have increased from 88% in FY2015 to 94% in FY 2016. Hence, any hike in interest rate by Bank Negara will have little impact on Sunreit finance cost. Anyway the debts to total assets of Sunreit is around 33%, a comfortable position from the 50% limit set.
The key is whether the planned strategy in FY 2017 (page 59) will further enhance the earning and DPU going forward. It needs to maintain a yield spread of 2% over the 10-year MGS which is currently around 4% else any hike in interest rate by US Fed will exert pressure 10-yr MGS yield and indirectly affect its share price.
The taxable portion of 1.67 sen/unit, the tax rate is 10%. Hence the net of tax will be 1.503 sen/unit (1.67 x 90%). If you add this net of tax portion to the tax exempted portion of 0.61 sen/unit. The total Dividend you received per unit will be 2.113 sen/unit.
Hence, if you have 1,000 units of Sunreit, you should get RM 21.13 dividend payment RM(2.113 x 1000)/100.
Sunreit has on one hand has converted 94% of its borrowings into fixed rate. Hence, any increased in interest rate will have little impact on Sunreit finance costs.
Investors will compared the Sunreit's yield with that of MGS 10-yrs yield around 4.1%. Since MGS rating is much better, investors will expect a yield spread of 2%. A hike in interest rate will exert pressure on MGS 10-yr yield.
For Sunreit to maintain its current price, its strategy to improve its earning in future must be realizable to improve its DPU payout in order to maintain that yield spread of 2%.
Hence, end of the day, it is your view on whether Sunreit management has been in the past able to deliver its promises and continue to do so in future.
Another factor is the USD/RM exchange rate, US dollar has strengthen for a quite a while. Since US Fed is adopting a less aggressive rate hike, US dollar has weaken. The strength of RM against USD will also play a part in deciding MGS 10-yr yield. A lot of moving parts to look out.
The most important factor is whether Sunreit management can continue to deliver earning growth and higher DPU payout.
Its a good time & rate to Buy is 1.71 ... Check the Charts .. Check the announcements ....... Big Players are buying it .... But you need to buy at right price .........
They never be a Good time. It's depend on how long you want to hold this stock. If you wish to hold for long term prospect. Go for it. If you wish for short term. No
KUALA LUMPUR (Aug 3): Sunway Bhd is disposing of its Sunway Clio property to Sunway Real Estate Investment Trust (Sunway REIT) as it wants to eliminate any conflict of interest with regards to the property.
Sunway said its wholly-owned subsidiary, Sunway Forum Hotel Sdn Bhd, will receive RM340 million for the property which comprises the Sunway Clio Hotel, a three-storey retail space and a multi-storey carpark.
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Pursuant to the exercise, Sunway City Sdn Bhd (SunCity), which is the holding company of Sunway REIT, Sunway Forum and Sunway Leisure, is providing Sunway REIT a guaranteed net property income (NPI) of RM20.23 million per annum for a period of four years.
Should there be any shortfall, SunCity said it will pay the amount equivalent to the difference between the actual total annual NPI achieved and the guaranteed NPI.
Good management but I heard that some asset valuation is way below the purchase price. Is it true? Do you think it'll affect the share valuation or it's just the operating figures we are looking at?
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
antonb
17 posts
Posted by antonb > 2017-02-27 12:33 | Report Abuse
the Cheah family have sold more than 10 million shares in this counter last week.....