Monday, June 23, 2014

Lippo Malls Retail Trust [Portfolio Buy] June 2014



This is the portfolio summary of Lippo Malls Indonesia Retail Trust. I have been keeping my eye on Lippo Malls for quite a long time (May and June), and today I saw a big trade push down the price to touch the $0.40 mark. There is huge supply at that mark, so I decided to just jump the queue and buy up at $0.405.

Current dividend yield based on the forecasted DPU will give a yield of 6.71%, which is pretty decent considering it is not highly levered (26%) and it is a retail trust. 

Based on Price/NAV, the Trust is currently selling at a 10.5% discount, which is not too bad. I like buying things on discounts.

Based on the 104 week low, the lowest price ever recorded was 0.385. This represents a downside risk of 5% based on capital gains loss.

Of course, there is no gaurantee that the 104 week low will hold and people will buy in at that price. However, if it really is capped to the downside here, the risk reward-ratio is still somewhat decent, since you're going to be getting a yield of 3.3% every half a year.

That means if you hold on for just over half a year and get your dividends, you will almost definitely be in the green as long as the bottom can hold for this stock. 

Compared to Croesus, Lippo has less yield, but it is also much more diversified with more properties in many locations. It has less leverage too. Their properties also look to me to be quite defensive, which I like in a retail trust. Lippo also has a NAV discount, which has since disappeared from Croesus. I'm glad I bought into Croesus when the discount was up for grabs.

Lippo Malls is the second last REIT left in my watchlist of REITs to acquire. The last piece that I am looking to add now is OUE Comm REIT. Based on my prop analysis, the rest of the other REITs do not look attractive to me yet.


Bought D5IU.SI @ $0.90

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