Singapore REITs That Increased Their DPU Last Quarter

Singapore REITs are the center point of attraction among Singapore stock market.

Multi Management Future Solutions choose the two important REITs to invest at the end of 2018 as per the trader's interest. 

EC World Real Estate Investment Trust and Manulife US Real Estate Investment Trust are two REITs that delivered strong growth in distributions per unit in the last quarter. Here we are presenting some financial facts which will help you to invest in these Singapore REITs.

EC World Real Estate Investment Trust invests in real estate assets. The Trust focuses on properties in the People's Republic of China. being used for supply-chain management, e-commerce, and logistical purposes. The latest quarter report of REIT recorded growth in all its core figures. Gross revenue and net property income increased by 0.1% and 0.5% respectively. Due to the contribution from its maiden acquisition of the Wuhan property the growth of REIT become larger. 

The DPU and distributable income grew at a much faster pace than its top line, increasing 10.0% and 9.0% respectively. The trust gets an advantage from the absence of a 5% withholding tax that was charged in 2017 and lower expenses. The REIT also has one of the lowest gearing ratios among the REITs listed in Singapore, with a gearing ratio of 30.7%. 

EC World REIT has one of the highest yields in the market at a tasty 8.67%.

Manulife US Real Estate Investment Trust is US Real Estate Investment Trust invests in real estate properties. The Company focuses on office properties located in the United States. The companies most recent quarter, gross revenue and net property income increased by 75.3% and 74.9% respectively from to the new accession. The distribution per unit increased by a whopping 33.6% to US$0.0151.

The performance of this REIT amaze the investors as the two new accessions would have diluted DPU based on a pro forma results of 2017. On the other side, with the two latest accessions, the REIT’s gearing now stands at 37.4%, just a few percentage points shy of the 45% regulatory limit.

At the time of writing, units of Manulife REIT exchange hands at S$0.775. If its DPU is annualized, the REIT will have a yield of 7.8%.

How SATS Ltd Shares Have Soared 2X Higher Than The Market’s Returns

The Airline caterer SATS Ltd (SGX: S58) delivered total returns of 30% over the period, a performance that is two times better than the STI, which posted 14% in total returns over the same period. SATS is one of the leading Singapore undervalued stock and leading provider in gateway services and food solutions.

Here Multi Management Future Solutions research closer look at the company’s performance over the past three years from different sources. Let's take a look closer look at SATS performance statistics over the past three years-

SATS Lim. has increased its revenue from S$1.69 billion in the financial year ended 31 March 2016 (FY15/16) to S$1.72 billion in FY17/18. The net income increased by a compound annual growth rate (CAGR) of around 9% rising from S$220.6 million to S$261.5 million over the same period. The increase in net income led to its EPS increasing from S$0.20 to $0.23. 

	FY17/18	FY16/17	FY15/16
Cash From Operation	245.5	308.9	273.1
Capital Expenditure	92.8	85.5	51.2
Free Cash Flow	152.7	223.4	221.9
Shares Outstanding	1,125.10	1,20.70	1,11.40
Free Cash Flow Per Share	0.14	0.2	0.2

According to the report of S&P Global Market Intelligence (above table) cash flow performance generated by SATS are stable free cash flow per share for FY15/16 and FY16/17 followed by a drop in FY17/18. The downtrend was due to changes in working capital which dragged its operational cash flow lower, coupled with an increase in capital expenditure. 

SATS Dividend

Now we can analyze the SATS’s dividends per share and payout ratio to see if its dividend sustainable. SATS has grown its dividend per share from S$0.13 in FY13/14 to S$0.18, the average increase is 8.5A% per year. In spite of the increase in dividends, the company’s payout ratio hasn’t changed much moving from around 71% in FY15/16 to about 73% in FY17/18. The stable payout ratio suggests that SATS is not extended itself when it comes to paying out dividends, which should allow the company to sustain its dividend into the future.

SAT’s income, cash-flow, and balance sheets are on strong footing. As such, it should not come as too much of a surprise to see the company outpacing the market two times.

        

CDL Hospitality Trust Posts 4.8% Lower DPU In Q3 Report

CDL Hospitality Trust (CDL-HT) recently reported lower distributions per unit (DPU) in the Q3 report. The lower distribution was due to, ranging from divestments and a drop in contribution due to ongoing renovations.

CDL Hospitality Trusts is one of Asia’s leading hospitality trusts with assets valued at S$2.7 billion. CDLHT is a stapled group comprising CDL Hospitality Real Estate Investment Trust (“H-REIT”), a real estate investment trust, and CDL Hospitality Business Trust (“HBT”), a business trust.

The newest report was for the stapled trust’s Q 3 earnings results for the year ending of 2018. CDL-HT is one of Asia’s leading hospitality trusts under the segment of undervalued stock with a portfolio of 15 hotels and two resorts comprising a total of 5,002 rooms and a retail mall. These properties are geographically spread across the world, from Singapore to Australia, Japan, New Zealand, United Kingdom, Germany, and the Maldives.

Here Multi Management Future Solutions presenting the highlight of the quarter result as per the traders result:

The gross revenue dropped by 8.8% year-on-year to S$50.0 million and the net property income decreased  10.20% to S$36.2 million. The steep decline in net property income was attributed to the divestment of two hotels in Australia.

The decline in distribution income was seen by 3.9% to S$26.3 million due to the pullback in revenue and net property income compared to the same period. The trust’s distribution per unit (DPU) fell 4.8% to 2.18 cents as a result.

The CDL-HT’s debt profile data shows the trust’s gearing stood at 33.8%, an increase from the gearing of 33.2% recorded three months ago. The trust’s weighted average annualized interest rate stood at 2.4% with an average debt duration of 2.9 years. Around 66% of the REIT’s debt was on fixed-rate loans.

The trusts’ portfolio had an average holding rate of 90.8% at the end of the quarter, increase from 88.7% year on year. The average daily rate and revenue per available room came in at S$182 and S$165, a decline of 2.6% and 0.3% year-on-year respectively.

CDL-HT’s net asset value slide down by 2% compared to the previous quarter coming in at S$1.48.

The Best Supermarket Dividend Share - Sheng Siong Group Ltd (OV8.SI)

Sheng Siong Group Ltd (SG: OV8) is the best player of high dividend stock payer than other stock in Singapore’s supermarket space.

The Sheng Siong Group is one of the leading undervalued stock Singapore and operates as an investment holding company, which engages in the operation of supermarket and grocery stores under the Sheng Siong brand. It sells live, fresh, and chilled produce, preserved food, general merchandise, and household products.

Dividend Yield
Sheng Siong shares last exchanged hands at S$1.13 on last Friday (5 Oct 2018), translating to a trailing dividend yield of 3.1%. Which means Sheng Siong appears the far better dividend share than other stocks.

Dividend Growth Rate
Sheng Siong dividend had climbed by 6.1% annually from S$0.026 per share in 2013 to S$0.033 per share in 2017. You can see the growth of the company’s dividend in the table below:

 

	2013	2014	2015	2016	2017
Total Dividend Per Share	2.60	3.00	3.50	3.75	3.30

Dividend Payout Ratio

The company with a dividend payout ratio of less than 100% is best because it leaves some room for the company to maintain its dividend even in the face of business slowdowns in the future. Sheng Siong’s dividend of S$49.6 million in 2017 was 82% of its free cash flow of S$60.8 million for the year.