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K-Green Trust: DPU of 4.69c.

Tuesday, January 22, 2013

K-Green Trust announced a DPU of 4.69c for 2H 2012.

For a long time now, I have been waiting for K-Green Trust to gear up, acquire assets and increase DPU. Well, it seems that my wish is going to come true.

"In 2013, we will focus on acquisitions in areas of waste management, water treatment, renewable energy and energy efficiency, including assets that were identified under the Rights of First Refusal," Thomas Pang, CEO of the manager of the trust.


Perhaps, it is time to look into buying in the next bout of selling by Mr. Market.

Related post:
K-Green Trust: DPU of 3.13c.

10 comments:

seefei said...

The green biz is a growing industry and if K-green CEO can execute what he promised, this counters will prosper. The half yearly dividend of 4.69 cents at 4.34% of the closing price at $1.08is very attractive.

Initiated a small position and if the biz takes off, will buy more.

AK71, thanks for the post.

AK71 said...

Hi seefei,

The Trust currently has zero gearing and I have been waiting for it to gear up forever. :)

Could be another good investment for passive income if the CEO delivers on the promised acquisitions. ;)

YH Tan said...

Hi AK,

Hopefully they will gear up this year. I believe they have some loan facility on standby based on recent announcement.

My neck very long leow!

YH Tan

AK71 said...

Hi YH Tan,

Oh, you are not the only unit holder resembling a giraffe. Haha.. ;p

Any acquisition would be DPU accretive as it would be funded 100% by debt. With gearing at zero, we can expect DPU to increase by quite a bit. :)

bhsh said...

That is what they say in 2012, still nothing bought in spite of the low interest environment.

In FY 2012, the Trustee-Manager will focus on acquisitions in areas of waste management, water
treatment, renewable energy and energy efficiency, including assets which were identified under the
Rights of First Refusal (ROFR). Key geographies for potential acquisitions remain Europe and Asia Pacific.

AK71 said...

Hi bhsh,

Yes, it is rather disappointing. :(

Elaine said...

Hi AK

Thanks for highlighting K-Green!

May I know what entry price point have you been mumbling to yourself?? :-)


Elaine

AK71 said...

Hi Elaine,

If I did talk to myself, you would probably read about it in my blog. If it is not in my blog, I probably have not been talking to myself. ;)

AK71 said...

We have a fair value of KGT at between SGD1.13-SGD1.19 excluding the recently announced DPU.

The upper end of our fair value range assumes the company is able to maintain a distribution payout of SG7.82 cents until 2024 and a gradual reduction thereafter assuming no extension of its plants’ lives and no new assets or upgrades.

The upper value is adjusted down from SGD1.22 to reflect a change in our assumption to keep DPU flat at SG7.82 cents instead of full payout of operating cash flow after interest and tax that may have led to marginally higher DPU.

As of end-2012, KGT had no debt. However, the company recently
signed up a standby facility in relation to potential acquisitions.

As this is a standby facility, we have assumed that it will not be drawn down unless the company identifies and proposes a purchase. At this stage, KGT has not indicated it will make acquisition in the near term.


S&P 28 Jan 13

AK71 said...

K-Green Trust's earnings rose 7.4% to $3.8 million in the third quarter, up from $3.5 million a year ago. Revenue for the three months ended September was $17.1 million, up 0.3% from a year ago.


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