Portfolio - January 2011

My Stock Portfolio for the month January 2011.

Company	Date of Purchase	Puchase Price	Market Price	Gain/Loss
Aims Amp	29-Sep-10	$0.215	$0.210	-2%
Innotek	01-Apr-10	$0.555	$0.575	4%
Cambridge	14-Jul-10	$0.506	$0.520	3%
SP Austnet	12-Aug-10	$1.040	$1.130	9%
First Reit	29-Nov-10	$0.702	$0.755	8%
New Toyo	26-Jan-11	$0.240	$0.240	0%

Dividend
Aims Amp announced a 0.51 cents dividend to be distributed on 15th Mar.
First Reit Announced a 0.87 cents dividend to be distributed on 28th Feb.

Purchase
Added more Aims Amp shares at $0.215 and bought New Toyo shares on 26th Jan 2011 at $0.24.

Sell
Nil

First REIT: SIAS Research Increase Exposure TP: S$0.910.

First Real Estate Investment Trust (First REIT) announced a healthy set of 4Q 2010 results on 21 January 2011.
Revenue for the quarter rose 3.8% YoY to S$8.0m (inclusive of S$0.3m deferred rental income from Pacific Cancer Centre @ Adam Road) while distributable amount inched up 2.8% YoY to S$5.4m.
Our dividend discount model values the company at an intrinsic value of S$0.910,
representing an upside of 19.7% over its last traded price of S$0.760. Maintain Increase Exposure.

http://firstreit.listedcompany.com/misc/SIAS-FirstREIT_26Jan11.pdf

Aims Amp Reit 3rd Quarter Results

Highlights for the Quarter

• Stable DPU performance: 0.51 cents, translating to annualised DPU yield of 9.5%
  

• Strong increase in gross revenue of 56.0% y-o-y, 16.6% q-o-q

• Net property income increased by 47.1% y-o-y, 20.7% q-o-q

• Well supported rights issue was 1.3 times subscribed, raising gross proceeds of S$79.6 million
  

• Portfolio grew from S$640.1 million to S$803.9 million with the acquisition of 27 Penjuru Lane
  

• Refinanced the S$175.0 million facility at an improved interest margin of 2.16% compared to 3.5% previously. Average debt maturity increased to 3.7 years.
  

• Sale of 23 Changi South Avenue 2 for S$16.7 million, 3.1% above book value

Distribution Timetable
DPU: 0.51 cents
Ex-date: 31 January 2011, 9.00am
Books closure date: 2 February 2011, 5.00pm
Distribution payment date: 15 March 2011

Key Financial Metrics
Appraised Value of Property Portfolio: S$803.9 million (2nd Q S$640.1 million)
Market Capitalisation: S$427.2 million (2nd Q S$447.1 million)
NAV per Unit: S$0.27 (2nd Q S$0.31)
Discount to NAV: 19.5% (2nd Q 27.4%)
Aggregate Leverage: 34.0% (2nd Q 28.9%)
Interest Cover Ratio: 5.0 times (2nd Q 4.4 times)
Weighted Average Debt Maturity: 3.7 years (2nd Q 2.2 years)

First Reit FY10 Financial Results

Key Highlights
Year 2010
•Including deferred rental income from proposed Pacific Cancer Centre @ Adam Road (currently under redevelopment), gross revenue increased by 4.4% to S$31.5* million, mainly due to higher rental income from the Indonesia properties
Variable rental growth component of 1.25%of the total gross revenue of four Indonesian assets kicks in in FY 2010; in addition to the annual escalation based on 2 times Singapore CPI (capped at 2%)

•Net property income increased by 4.2% to S$31.1* million

•Distributable income increased by 1.8% to S$21.3 million

•Net asset value per unit at 77.00¢as at 31 Dec 2010 (based on enlarged share base a result of rights issue)

•No major refinancing needs till 2012

Projection Year 2011
•Projected distribution per unit (DPU) stands at 6.4 cents

•Projected distribution yield for 2011 at 9.14%, based on a theoretical ex-rights price of S$0.70 (as per the Circular to unitholders dated 10 November 2010)

•Based on the projected DPU of 6.4 cents and the closing price of S$0.765 as at 19 January 2011, the yield is 8.37%.

DPU
•Distribution per unit is lower in 4Q 2010 due to the issuance of 345,664,382 Rights Units on 31 December 2010 in relation to the acquisitions of MRCCC and SHLC

•Holders of new rights units will be entitled to 4Q 2010 distribution, but the properties only start to contribute to earnings and distributions in 2011

•For Unitholders who subscribed to the new rights units, the effective distribution per unit would be equivalent to 1.96 cents.
*Actual DPU for 4Q 2010.Consistent DPU

Distribution Per Unit 0.87¢
-Taxable 0.07¢
-Tax-Exempt 0.72¢
-Capital 0.08¢
Book Closure Date: 31 January 2011
Distribution Payment Date: 28 February 2011

EPS
31/12/2010 15.69 cents
31/12/2009 9.39 cents

More info on land acquisition of CIT properties

Source from DMG:
Based on the company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition: (i) 1 Tuas Ave 3 – likely to be wholly acquired, but management feels minimal impact as CIT has two years to work with tenant to look for an alternative site or possibly develop a facility for CWT, so loss of NPI may not materialise at all. (ii) 30 Tuas Road – only entrance expected to be impacted, likely truncated (iii) 120 Pioneer Road – least impact, grass patch in front of building. As management will be meeting up with the authorities in the next two weeks, management should have more details by release of its 4Q10 results on 11 Feb. Maintain BUY, with TP of S$0.61.

My comments:
As according to the above info provided, the largest effect on CIT's rental income is on 1 Tuas Ave 3 which is about SG$2.6Mil in year 2009. The impact seems not great but will need more information to confirm on the overall effect.

NOTICE OF COMPULSORY LAND ACQUISITION AFFECTING 3 OF CIT’S 43 PROPERTIES

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial
Trust (“CIT”) (“the Company”) wishes to announce that it has received a formal notice
from Singapore Land Authority (“SLA”) on 11 January 2011 with regard to the compulsory
acquisition of land on Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and
Tuas South Avenue 3 for the construction of Tuas West Mass Rapid Transit (“MRT”)
extension and road works along the Pan Island Expressway, Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and Tuas South Avenue 3.

Based on the Company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition:
1) 30 Tuas Road (Lot No 1289X pt Mukim 7)
2) 120 Pioneer Road (Lot No 3237M pt Mukim 7); and
3) 1 Tuas Avenue 3 (Lot 1422X Mukim 7)
All or part of the land where these properties are situated will be possessed by the Government by January 2013.
The relevant authorities will be arranging for their representatives to discuss the details of
the compulsory land acquisition with the Company, including details of compensation.
The Company will continue to assess the situation and will issue further announcements when it has more information.

My comments:
Base on the gross rental income in FY 2009, the land acquisition of these 3 properties will reduce CIT's revenue by approximately 5.5 mil (or 1.375 mil per quarter).
This will in turn reduce the DPU per quarter starting in year 2013. As for how much reduction in DPU and compensation amount given by SLA, more information needs to be provided.
Questions that I have:
(1) Amout of DPU reduction
(2) Are the 3 properties fully paid up? I suppose not since CIT gearing is pretty high.
(3) How much is SLA compensating
(4) What is CIT's plan on using the compensation. To pay off debts or more acquisition in line.

Daiwa tips mixed bag from S-REIT earnings

Ahead of the earnings release for Singapore REITs starting with Ascendas REIT (A17U.SG) later today, Daiwa says it expects “a mixed bag for net-property income and distribution-per-unit growth because several S-REITs completed major acquisitions and refinancing during the quarter.”

It also expects distortions from asset refurbishments, divestments, and negative rental reversions to accelerate in the office space. “We expect the hospitality-related S-REITs to continue to record the strongest underlying DPU growth, though the pace might moderate in 2011.”

It says the 12 S-REITs under its coverage trade at a weighted average FY11 DPU yield of 5.7%.

“We maintain our Neutral view for the broad sector and continue to prefer the industrial-property and hospitality names for their above-sector average yields and positive DPU growth in the current low interest-rate environment.”

In industrial space, it rates Ascendas REIT, Mapletree Logistics Trust (M44U.SG), Cambridge Industrial Trust (J91U.SG) at Buy. In hospitality rates, Ascott Residence Trust (A68U.SG), CDL Hospitality Trusts (J85.SG) at Buy.

First Reit - DATE OF RELEASE OF FULL YEAR 2010 FINANCIAL RESULTS

Bowsprit Capital Corporation Limited, as Manager of First Real Estate Investment Trust (“First REIT”) will be announcing the unaudited financial results of First REIT for the fourth quarter and full year ended 31 December 2010 on Friday, 21 January 2011.

S-REIT valuations no longer compelling - JPMorgan

JPMorgan says “2011 will likely be a volatile year for S-REITs sector with a total return expectation of 8.0%, dominated largely by the dividend yield.”

It notes this compares with its return expectation of about 15% for the STI. It says while rental growth expectation for most commercial segments remains positive and physical market transactions will continue to pick up, the potential supply in the equity market through primary and secondary issuances will keep unit prices in check.

It adds, valuations are no longer compelling as S-REITs are trading at a forward dividend yield of 6.0%, P/B of 1.1X and 7.5% premium to house NPV estimates. It downgrades CapitaCommercial Trust (C61U.SG) to Underweight vs Neutral on lack of growth, deteriorating portfolio quality and rich valuation.

It also cuts CapitaMall Trust (C38U.SG) to Neutral vs Overweight "as we believe that constant cash calls from the sector would put pressure on the stock.

Cambridge Industrial Trust- 4th Quarter Financial results release date

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial
Trust (“CIT”), is pleased to announce that CIT’s unaudited financial results for the fourth
quarter and full year ended 31 December 2010, will be released on Thursday, 10
February 2011 after market close.

Aims Amp- 3rd Quarter Financial Results Release date

AIMS AMP Capital Industrial REIT Management Limited, as manager of AIMS AMP Capital Industrial REIT (“AIMSAMPIREIT”), is pleased to announce that AIMSAMPIREIT’s unaudited financial results for third quarter ended 31 December 2010 will be released on 25 January 2011, after market close.

First REIT started at Buy by OCBC; $0.84 fair value

OCBC initiates coverage on First REIT (AW9U.SG) with a Buy recommendation and $0.84 fair value estimate.

The research house says FREIT "is well-positioned to capitalise on the growing demand for higher quality healthcare from the middle-class in Indonesia as well as increasing eldercare needs in Singapore."

OCBC notes FREIT has completed acquisitions of two Indonesian hospitals recently "which we view as yield-accretive in nature."

It adds, FREIT would benefit largely from the support of its "strong and committed" sponsor PT Lippo Karawaci -- Indonesia's largest listed property company.

The house also likes the management's strong execution capabilities and FREIT's attractive distribution yield, "which is well above the S-REIT average."

OCBC's $0.84 fair value yields potential upside of 13.7% and total return of 22.6%.

DMG upbeat on S-REITs going into 2011

DMG says the low interest rate environment will support S-REITs prices in 2011; it maintains Overweight stance on the sector.

“We expect prices to be supported as investors continue to pursue yields. Investors are also likely to be attracted to assets that offer an inflation hedge by allowing for continuous re-pricing of cash flows with a dynamic earnings model.”

Notes, tourist arrivals are expected +10% in 2011, thus expects hospitality counters, such as CDL Hospitality Trusts (J85.SG)—rated Buy, $2.39 target— to benefit from the influx of visitors.

It adds, office rents are chalking up increasing rates of growth since 2Q10 and concerns about large volumes of shadow space coming on-stream have dissipated, on the back of brisk leasing activities.

Suntec REIT (T82U.SG), rated Buy with $1.71 target, has reported strong increases in Suntec City office occupancy, while CapitaCommercial Trust (C61U.SG), rated Neutral, SD$1.55 target, “is confident that take up would come from both existing tenants expanding and newcomers.”