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Asian Pay Television Trust (APTT): 201 lots.

Tuesday, May 28, 2013



Asian Pay Television Trust (APTT) was my first IPO application in donkey years. So, you can imagine I was somewhat excited.

When I heard that people who applied for 100 to 499 lots would get 80 lots if successful, I was even more excited! I applied for 201 lots!



Apparently, only 7 out of every 50 applicants were successful for the range of 100 to 499 lots. Chances were slim and chances were even slimmer for people who applied for 99 lots or less.

Chances improved markedly for those who applied for 500 to 999 lots. 33 out of every 50 applicants were successful and they would get 374 lots each! Wow!

This was an IPO that favoured the bigger players, it would seem. Be ready to either make a big killing tomorrow or be killed big time. I think the former is more likely.

Congratulations to all successful applicants!

Related post:
Asian Pay Television Trust: IPO

48 comments:

AK71 said...

Oh, I didn't say if I was successful in my application, did I?

Sigh, I guess I was too depressed to blog properly. Yup, you guessed it. I got nothing. Sob. :(

opal said...

I didn't get any as well. :(

AK71 said...

Hi opal,

Chances are very slim unless we applied for 500 lots or more.

I hope at least a few readers succeeded. This will be reason enough for celebration! :)

SOLIDCORE said...

Will the elusive applicant please stand up?

AK71 said...

Hi Solidcore,

Yes, I would like to give successful applicants a standing ovation! :)

Poh Soon said...

I applied for 24 lots and got nothing, while my brother who applied 10 got 6 lots. He is damn lucky!

AK71 said...

Hi Poh Soon,

This is definitely luck! No skills required. ;)

Happy for your brother.

Just found out a friend got 80 lots! A gain of 10c per share would mean a cool $8,000 ang pao for him. This is just like striking lottery. Huat ah!

Kelvin said...

I also got nothing =((

AK71 said...

Hi Kelvin,

Most people who applied for 499 lots or lesser would have failed to get anything. Luck of the draw. :(

Sanye ◎ 三页 said...

I got nothing too. :(

AK71 said...

Hi Sanye,

Those who were lucky at the ballots will feast. :)

coven said...

Hi all,

wasn't initially very keen for this IPO as it was Taiwan broadband TV services.

But I applied for 50 and got 36 lots :)

Eagerly awaiting 2 pm price! Anyone knows the indicative grey price ???

AK71 said...

Hi coven,

You are the first reader to check in with a positive! Congratulations! Applause!

Could I interest you to visit some of the sponsors of my blog? ;p

I blogged about what I think the unit price of APTT could trade at in my earlier blog post on the Trust. Click on the related post link at the end of this blog post. :)

yeh said...

i applied 150 lot and get nothing.
hubby also..

really no luck:(

LoveLocks said...

It's dropping
Got some at 0.96.
Hopefully the yield will make up for the drop :)

AK71 said...

Hi LoveLocks,

I think the strategy to give huge number of lots to larger investors backfired! These investors probably didn't think they would get so many lots and had to trim what they got!

LoveLocks said...

Yes, that might be true anyway
I'm queuing for more at lower price now :)

Cheers Jimmy

AK71 said...

Hi Jimmy,

There is no accounting for Mr. Market's moods.

At 90c a unit, APTT will be offering a distribution yield of 8% in the first year which is perhaps more attractive to Mr. Market. For now, it seems rather gloomy.

LoveLocks said...

Your crystal ball is good,
I'm indeed queuing for more at.90

Poh Soon said...

Lolx.. apparently, it become a blessing for those who failed to be alloted in the IPO exercise.

We can decide when to buy from MR market at an even attrative yields.

AK71 said...

Hi Jimmy,

Well, 90c is also attractive technically as it is a round number, isn't it? :D

OK, tonight I am going bowling with my crystal ball. Oh, it doubles up as my bowling ball. Didn't I tell you? ;p

STRIKE!

AK71 said...

Hi Poh Soon,

It would seem to be the case. :)

SOLIDCORE said...

Hi AK,

Looking at the REITS universe charts these few days, seems like a dropping knife going through many buyers hands.

Still too early to see any significant signs using TA though but I guess our unsuccessful IPO was infact a success :)

AK71 said...

Hi Solidcore,

Indeed, a blessing in disguise. :)

Perhaps, APTT started trading on a bad day for REITs and Trusts.

opal said...

It was a busy day for me. So I didn't get to check.
I noticed APTT closed at 92cts.
I hope to collect some tomorrow.

AK71 said...

Hi opal,

So many people misunderstood why I applied for units in the IPO. They think that I am primarily after the distribution yield promised by the Trust.

Actually, if they were to read my blog post on APTT again, they will realise that I was expecting Mr. Market to respond positively to the IPO in a yield hungry environment. Unfortunately, I was wrong and, fortunately, I didn't get any units allotted to me in the IPO. :)

So, what does this mean? Am I not interested in APTT anymore? No. I am still keeping an eye on its unit price because if it were to decline further to give us a much higher yield, it could still be a very good investment for income.

Howyuan said...

Wow, heng!

ELse you will lose $10k today :P

AK71 said...

Hi Howyuan,

If I were successful at the ballots, I would have been given 80 lots just like a friend of mine. So, the paper loss would be $4k. Not as dramatic as $10k but still quite a bit of money. Heng ah. ;p

yeh said...

Hi AK, my finance manager friends says its profit and loss account v ugly. Profit is decreasing

AK71 said...

Hi yeh,

The Trust distributes its income and not its earnings. It is a leveraged instrument just like MIIF and REITs.

We cannot value REITs and Trusts like we would value companies. Different animals. :)

Dolly & Zoopy said...

What's the difference between S7OU and S9AU? I have been given allocated some stocks through MIIF but not sure which stock I have been given.

AK71 said...

Hi Dolly & Zoopy,

I am afraid I do not know the answer to this. You might want to call your broker tomorrow. :)

Paul said...

If there is one thing I was surprised about this post is that you are still applying for IPOs at the ATM.

In case you dun know, you can do so through online through IB.

AK71 said...

Hi Paul,

I am a dinosaur in more ways than one. The ATM is already a technologically advanced contraption to me. ;p

David & Thi said...

Picked up some APTT earlier around 0.915 but failed to catch the sub 90 price...

But with a yield of 8% for 2013 and projected 9% yield for 2014. It seem to be attractive for longer term play...

Will slowly accummulate.. it is similar to Starhub of Singapore which offers Cable TV and broadband...

Cheers
Yee

AK71 said...

Singapore, 26 June 2013 -

Macquarie APTT Management Pte. Limited (the “Trustee-Manager”) as trustee-manager of Asian Pay Television Trust (“APTT”) today notes that Taiwan Broadband Communications Group (“TBC”) has received approval from the National Communications Commission of Taiwan (“NCC”) to commence the partial expansion of its Hybrid Fibre Coaxial (“HFC”) cable network.

As noted in the APTT prospectus dated 16 May 2013, TBC recently applied to expand the cable network in one of its five franchise areas.

If implemented, the expansion would provide TBC with the opportunity to deliver its suite of services to up to an additional 400,000 homes in the greater Taichung area.

Rick said...

Hi AK71, the notice also talk about 4.8 cents dividend, does that means APTT will declare 4.8 cents dividend to all unitholders and to be paid out in Oct 13? Thank you.

AK71 said...

Hi Rick,

APTT receives income twice a year and should be distributing income to unit holders twice a year, therefore.

First distribution is happening in early October and as per management's guidance, it will be 4.8c per unit. :)

Rick said...

Hi AK,

Thanks. I supposed this is a piece of good news but the share price does not rally much. Seems like there are more to APTT than meets the eye. Anyway, I will be holding firm until XD, enter at $0.86 :)

AK71 said...

Hi Rick,

Mr. Market has grown cautious with regards to all leveraged investments which include REITs and business trusts. So, weakness in their unit prices is not surprising.

We just have to remember that all investments are good at the right prices. ;)

Capricon said...

AK,
With APTT at 82.5, did u pick up any ?
It is attractive if base on yield but I am skeptical about broadband access and pay TV business, unlikely income can increase when subscribers base is saturated eventually.

Your thoughts ?

Regards

AK71 said...

Hi Capricorn,

Whatever I have now is a legacy of my investment in MIIF (which I have fully divested).

Although I will say that TBC was MIIF's crown jewel in terms of income contribution and that APTT's distribution yield is looking very attractive now, I am somewhat cautious.

See:
http://www.aptt.com.sg/dafiles/Internet/mgl/com/aptt/news/2013/docs/aptt-30June2013-results-presentation.pdf?v=2

As we can see, APTT has lots of debt and much of its assets is intangible. Its long term loan is for a period of 7 years and as long as it is able to re-finance successfully with a reasonable cost of debt when the time comes, it should be fine. However, this is a wild card with interest rates looking set to increase in the next couple of years.

At the current price, Mr. Market is telling us that he needs a bigger margin of safety to invest in APTT. Could the low of 81c hold as support or would it break? I don't know but technically the MACD is now in negative territory. There could be a bounce in unit price but it could drift lower.

Solace said...

Hi AK,

I have a feeling that APTT does not have a strong economic moats. of course, this is subjected to how we view it.

Because the economic moat is not strong in my opinion, it is hard to predict future earnings. And Company w too much debt will have it tough in an economic downturn.

I will certainly demand a big "safety margin" if i were hold to any shares of APTT.

AK71 said...

Hi Solace,

Whether APTT has a moat or not is really a matter of perspective. According to the presentation the Trust gave to investors, one of the 6 strengths of APTT is the existence of high barriers to entry.

I would agree that rolling out a network and going against the incumbent TBC which has a 68% penetration rate in the designated franchise areas is going to be an uphill battle. Is the market lucrative enough for a competitor to apply for a license from the government? I don't know but it does not seem like a good idea.

My main worry about APTT is the debt level which is very high. With interest rates possibly rising in another 2 years from now, I would like to see them lowering their gearing level.

However, this cannot happen unless they reduce the distributable income to unit holders or do some kind of equity fund raising. Either option would mean lesser income for unit holders.

Of course, the Trust could also refinance successfully when the time comes. However, depending on various factors including the prevailing interest rates at that point in time, how much income would be available for distribution is hard to tell.

Since the term loan is for 7 years, if we can recover our investment in the Trust within 7 years, that would reduce the risk of losing our capital by a lot.

Assuming a DPU of 8.35c per annum, it would mean that a relatively safe entry price is about 58.5c!

Solace said...

Hi AK,

Thank you very much for your insight :) You analysed the company much deeper than i did. :)

For it to reach 58.5 cents, Mr Market has to be in a very poor mood to name a low price.

I will be tempted to take advantage of the offer by Mr market if he sells me at the price! haha

AK71 said...

Hi Solace,

Well, I have a vested interest since I was a unit holder of MIIF and my current investment in APTT is a legacy. :)

I still like APTT's business and I am sure it has a strong moat.

There is plenty of debate online on whether APTT is a good investment. Personally, I would rather think how it could be a good investment.

Peter Lynch taught us that all investments are good at the right prices. ;)

vicster said...

Hi Ak,

Are you still vested in this? What's your take? I nibbled a bit at the current prices of around 66c.

Thanks!

AK71 said...

Hi Vic,

Look out for my blog post on 2015 full year income from non-REITs. Should be publishing it very soon. ;)

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