Sound Global and China Minzhong: Retracing.

Sound Global is going through a low volume pull back now but with the CMF negative and forming a lower low, I was probably too hasty in adding to my long position today at 66c.

Let us see if 64.5c is tested next. I have an inkling that a very strong support is at 61.5c, the many times tested resistance in the middle of 2012. 

59.5c would be an even stronger support as that is also where we find the 100w MA. In the short term, there could be further weakness but in the longer term, I see strength.

China Minzhong is taking a breather too. Immediate support is at 96.5c. If that should go, the next support is at 87.5c.

Related posts:
1. Sound Global: Another resistance level broken.
2. China Minzhong: Partial divestment at $1.01.

AIMS AMP Capital Industrial REIT: 3Q FY2013 DPU 2.58c.

The management declared a DPU of 2.58c for 3Q FY2013 as it pays out 100% of taxable income for the quarter. Note that this includes 0.05c from a tax adjustment.

So, removing this, a more accurate DPU from its business is 2.53c for the quarter.

NAV/unit: $1.469
Gearing: 33.6%
Interest cover ratio: 4.6x
No major refinancing needs till FY2016.

Total Assets: $1.048 billion

Occupancy: 98.5%
Average security deposit per property: 6.8 months
Average land lease expiry: 40.4 years

The management impresses with securing lease renewals from its tenants way ahead of expiries and with positive rental reversions to the tune of 23.5% on average to boot.

Currently, only 6.3% of leases are expiring in FY2013 and only 8.3% of leases are expiring in FY2014. Managing to renew these leases and with a corresponding increase in rental could bump up subsequent DPU.

Of course, the completion of phase 2 in the redevelopment of 20 Gul Way by end of this year and the completion of redevelopment of 103 Defu Lane 10 in the middle of next year will bump up DPU more significantly, everything else remaining constant.

In the near term, expect DPU to improve in the next quarter as income from phase 1 of the redevelopment of 20 Gul Way will be recognised then. I would not be surprised if the unit price of the REIT goes higher as the market takes this into consideration.

The REIT has many more properties with under-utilised plot ratio like 103 Defu Lane 10. Selectively re-developing these plots will lead to higher NAV and NPI over time.

Like I said before, this could be another A-REIT in the making and spells good news for loyal unit holders.

The REIT will go XD on 7 February 2013 and the income distribution will take place on 19 March 2013.

At $1.58 a unit, annualising the adjusted DPU of 2.53c, the distribution yield is 6.4%. 

Doing a projection into 2014, however, I expect that this is set to increase, assuming that the unit price remains where it is today.

See presentation slides: here.

Related post:
AIMS AMP Capital Industrial REIT: 103 Defu Lane 10.