Treasury China Trust: A chat with Nick.

While chatting with Nick earlier this evening in LP's cbox, he said that he is looking at Treasury China Trust (TCT). A trust to consider for passive income plus growth, perhaps? The following exchange is reproduced with Nick's permission:

Nick @ Home: Treasury China Trust is an interesting company to ride the property boom in China. I must study it more
Nick @ Home: Trading at 70% discount to its NAV......
AK71 @ home: 70% discount to NAV?!
Nick @ Home: Yea...despite owning 3 high quality assets
AK71 @ home: what's the gearing?
Nick @ Home: 35%
Nick @ Home: Debt: S$658 million. Asset: $1.94 billion
AK71 @ home: debt profile?
Nick @ Home: Debts was recently refinanced...mature in 2015
Nick @ Home: Interest expense will be halved
AK71 @ home: hmmm... nice yield?
Nick @ Home: DPU forecast is $0.05. They will use equity (profits earned from property sales last year) to fund dividend payout near term. Once their development projects come online, they expect cash-flow to triple.
Nick @ Home: From now to 2012, dividend payout ratio will be 80% after which it will drop to 50% to fund more development projects
AK71 @ home: very promising... sounds tempting
Nick @ Home: This year yield will be around 3%...I guess with the rising rentals and lower interest expense, DPU can rise in 2011....in 2012, its development projects come online and DPU should increase significantly
Nick @ Home: But being a development trust, it has a growth element inside unlike a REIT
Nick @ Home: So its yield won't be high but it more growth potential since they can build and sell assets to other REITs haha
AK71 @ home: huge interest in the last 2 sessions
Nick @ Home: Yea...they announced that they renew their lease at over 8% higher rates
AK71 @ home: short term overbought but very strong momentum...
AK71 @ home: $1.60 is resistance turned support... can consider Nick @ Home: http://www.treasurychinatrust.com/
Nick @ Home: JP Morgan gave a very bullish report on 16 August
Nick @ Home: available in the tct website JP Morgan's report at this link: http://www.treasurychinatrust.com/Pics/httpmarklogic-b.jpmchase.net8005GPS-434739-0.pdf

Healthway Medical: Up or down?

Price hit 16c on 31 Aug.  That was exactly on the rising 200dMA.  Today, the counter hit a high of 17.5c.  Technically, 17.5c is a formidable resistance level as it is a many times tested resistance and it is also where we find the declining 20dMA and the flat 100dMA.  Healthway Medical is at a critical crossroads, it would seem.

Looking at the 20dMA, there is no doubt that the counter is in a downtrend in the short term. With the 50dMA declining as well and the 100dMA flatlined, the short term picture is not encouraging.  However, the 200dMA is still rising and if it holds, Healthway Medical could just be going through a period of consolidation.

Today's upward movement in price is probably in response to the oversold situation as suggested by the RSI which has risen out of the oversold territory. The MFI, which has been rising since 18 Aug, signalling a return of demand, however weak, is testing the downtrend resistance.  If it breaks this in the next session, it would provide some much needed momentum to help push price higher.

The MACD, although still declining in negative territory, is seeing its distance with the signal line narrowing and we could be seeing the early stages of a bullish crossover. Remember, TA is about probabilities, not absolutes. Punters could make some nice gains here if everything pans out nicely.

Related post:
Healthway Medical: A low of 16c.