AmFraser have some seriously optimistic cash flow projections for MIIF | Investment Moats Skip to Content

AmFraser have some seriously optimistic cash flow projections for MIIF

Macquarie International Infrastructure Fund is a 9% yielding infrastructure stock listed on the SGX. I am invested in this and talked about my sweet and sour relationship with this stock a fair bit (read here)

MIIF just announced their latest quarter results. There are some good news in that the tax issues of Taiwan Broadband Communications (TBC) have been settled and the expected losses are immaterial.

However, it was still not clear how the expected moderation by the Chinese government over toll charges for Hua Nan expressway (HNE) will affect MIIF. I have asked for a sensitivity analysis from the Investor Relations but judging by their record they should not do anything about it.

I am positively surprise by the surge in traffic for HNE. Still the level of debts in this stock can be crazy and what we know is that most are not amortized which means that somewhere down the line, earnings by TBC and HNE may need to scale down to pay the massive debts or to get them refinanced.

Still, I read this report from AmFraser with their projection on how the cash flow of the 3 major assets will progress to.(read report here) I find them a tad optimistic. I would rather estimate based on the worst case scenario.

MIIF probably need 75 mil from the 3 assets since they need 65 mil to distribute the 5.5 cents annual dividend. The closest projection is 43 mil + 22 mil + 6 mil equating to 71 mil. We are still a bit short there but not that big of an issue since MIIF still have a cash horde.

Still I will watch this stock closely since the management in the past have made some rather questionable moves, its underlying have debts that could cripple distributions.

I run a free Singapore Dividend Stock Tracker . It  contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly  here.

Vicom with a good set of Q1 2012 results
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Thomas Ooi

Sunday 9th of December 2012

Hi Drizzt,

Have a look at this blog

http://www.martinlee.sg/miif-director-nomination-voted-down/

Drizzt

Sunday 9th of December 2012

hi Thomas, i saw that.

Drizzt

Wednesday 5th of December 2012

very very disappointed.

Vince

Wednesday 5th of December 2012

I was at the SGM. Resolution 1 carried, the other 3 bombed out. So, like it or not, no new directors for the time being.

A lot of shares have still not reached their pre-financial crisis price yet, and this is one of them.

Vince

Tuesday 4th of December 2012

Yes, I want them to languish. So, no new directors for me. :-) Let the old chaps continue to buy back shares, which can, hopefully improve the dividend yield.

Drizzt

Tuesday 4th of December 2012

well think of it this way. if they continue to be in poor management, sooner or later you may end up losing your capital. the people who bought at ipo of $1 still have yet to recurperate.

Vince

Saturday 1st of December 2012

Hi Drizzt,

Maybe you can straighten me out on this. You mentioned above that 40 cents is a good entry point for MIIF. But those guys who called for the SGM says that even now at 0.585 it is too low. So if they get their way, poor Eric above will never get to buy his stock.

I often have this problem. On the one hand I would like my existing stocks to rise, on the other hand, if they rise, e.g., like some of the industrial reits, I won't be able to buy anymore.

Drizzt

Monday 3rd of December 2012

hi Vince, if you are young and you want to collect more good stuff, of couse you want them to languish because you wont be cashing them out anytime soon (are you?)

value happens when your perception and market's perception differs. it depends on how strong your conviction is. the market can be wrong for a long time.

as for MIIF i say less than 50 cent is a good entry because i crave for safety. i dunno how they value it but as a yield investor i look at a 5.5 cent div needing 55 mil can assets pay for it? if not how much diviend can they pay? 40 mil? how much dividend per share does that translate to? what is a good price to get it at a 7% yield? its unorthodox but at the bear minimum i try to be conservative with my estimate so that i don't get disappointed.

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