I decide to take a break from blogging even though I have some spare time. But this earnings season, there are some sub plots that I will want to see how it will turned out.
Frasers Centrepoint Trust (Analysis)
Retail suburban trust, like all REITs was beaten down as they will fare pretty worse in a persistent rising yield environment.
There are still some excess Causeway point post asset enhancement upward reversion in place.
FY 2014 have 30% going to expire, FY 2015 36%.
Management have indicated there are room for 10% rental revision so we shall see.
China Merchant Pacific (Detail)
Share price have moved down since I did more adding at the average price of 91 cents. Taking massive losses there!
But of more concern is really, with the China slow down, how will this really affect the sturdiness of earnings and cash flow.
I am not afraid at this moment they are going to cut dividends. Far from it, they are paying out like 350 mil out of 1900 mil in cash flow for that 6% yield.
Its important to see whether this is a precursor to anything to worry about.
They should be amortizing their debt well.
We were expecting some sort of poor earnings in the last quarter for Straco. Not so. Would they be affected by the slow down or will they show astounding resilience in earnings?
This is the stock that I missed. Didn’t get invested cause I have some misgivings. The stupid Investor relations is really passive about it.
When the edge article came out, we realize all is too late. Yours truly is really not fated with this company. Fuck.
Even though it is quarterly earnings, it will be good for management to break down the segmental revenue and profits to see whether the large investment in payment devices will create a resilient revenue stream.
Singapore Shipping Corp
Very nice little company from the old days that may benefit when the shipping upturn picks up.
Currently yielding 4% but it is really like a 12 year bond.
They just bought over Cougar Logistics assets and looks to add SGD 2 –4 mil dollars to full year earnings, but they will be scraping a very old ship.
Will this end up better? We are not sure. If Cougar log surprises with a consistent 4 mil earnings then perhaps Mr Ow will just bump up dividends to 1.5 cents for a 6% yield.
Religare Health Trust
Health care trust is normally very defensive but this trust have something working against it and that is the weak currency.
Although it is hedge for 2 years, we want to see how is their performance.
By no means is it similar in structure to First REIT in that they may suffer from inflation capex.
NSL Ltd (Detail)
Who doesn’t love a consistent 7% yield. The only problem here is that they are rather dependent on a Thai Subsidiary which have 1 out of 3 of its chemical plant blew up in an explosion last year.
That affected earnings severely but NSL have proven resilient.
The interesting thing is that their collaboration with their Japanese partners will have a third factory online somewhere in June. My hunch is that this will improve earnings.
Still uncomfortable there are so reliant on a subsidiary for cash flow so much
Book to bill have been looking very healthy of late. And I am not expecting any surprises here.
The thing I am pondering is whether margins will edge close to 50% (management said it wouldn’t)
And I have a hunch that this competition to produce high tech next generation chips will result in an all out war to invest in capex, which AMAT will benefit.
The other thought is that the dynamics of the industry perhaps would have changed compare to the last 2 downturns in that the industry is not motivated by DRAM and Desktop chips, but a wider range of chips required. Would this result in the industry being less cyclical? (or am I being optimistic)
Karin Technology and Willas Array
2 electronic stockist operating in Hong Kong and Mainland China. Very much dependent on how well the managers managed risk and profitability. How well would they do?
Perhaps this is also a barometer into China production health.
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