Posted by DividendGuy67 > 2023-06-09 21:58 | Report Abuse

Good to document and thanks for sharing your thoughts 2 years ago. At the time, price was 65 sen, today, 48 sen, or 27% drop. Are your views still the same, and are you still holding?

The NTA is broadly similar today vs 2 years ago, but price is 27% lower. Are you more excited to own more at lower prices?

2021 DPS (4.5 sen after tax) has dropped 31% since you last written. 2022 DPS is 3.07 sen after tax. Looks like market appears to be pricing relatively correctly i.e. price falls follow dividend cuts so far retrospectively. The question mark is always the future - how will future dividends be like?

ARREIT dividend keeps falling the past 5 years, every single year. If you ask me what will be 2023 dividend, I think more than 50/50 chance it will continue to fall. But last dividend was higher, so, maybe less than 50/50 chance it will continue to fall. Yet, this is visible to market, and earlier this year, price was higher than 65 sen. So, my guess is market knows something about ARREIT that is not good news, i.e. brace for even lower dividend in 2023, continuing the past 5 year trend of lower and lower dividends?

Last quarterly report showed that ARREIT earnings was hit by the Office segment, primarily Vista Tower. Net Property Income dropped YoY, from 13.4 down to 12.7m. Unfortunately, Finance costs spiked up YoY from 5.9m to 7.5m. What's left over after Finance cost is down from 4.3m down to 3.3m.

1 Quarter earnings of 3.3m, if annualized for 12 months is 13.2m is only 2.2 sen per share. At 48 sen per share the dividend yield will be around 4.6%, which is not too bad. I think it should be able to do more than 13.2m in 2023. This assumes it doesn't keep losing rental income.

The Vista tower purchase in 2017 I think is a mistake because it is such a huge purchase (523m relative to total assets of 1.2 billion) and comes with it high Finance costs, and now, rental is terrible but Finance costs becomes higher and continues. https://www.amanahrayareit.com.my/media/latest-news/amanahraya-reit-to-buy-the-intermarks-vista-tower/. Blackrock must be happy to dispose, they typically know something more.

ARREIT is asset rich, will it dispose one of its assets? At 48 sen market price, but NTA of nearly 1.30, a small sale should boost valuation hugely - use proceeds to pay off debts, become a cleaner REIT.

Management could have done this 3 years ago but didn't do anything. When will Management take action (if ever)?

ARREIT needs to pick a property and announce its intention to sell. Then, likely, the bottom is in. Until then, if next Quarterly report show worsening, price will keep falling.

Posted by speakup > 2023-06-10 15:35 | Report Abuse

lu suka REITS? i recomend lu Alaqar. Best giler!