PREH is likely to continue trading at a big discount.

My experience with Perennial Real Estate Holdings (PREH) started from its days as Perennial China Retail Trust (PCRT).

PREH has a portfolio consisting mostly properties in China in terms of asset value (75%) and the balance being properties in Singapore.

Some numbers:

NAV/share= $1.68
Gearing= 0.45x
EPS=6.88c






At 90c a share, we are looking at a PE ratio of about 13x.

I believe that PREH is a long term value creator. 

The investment thesis is somewhat similar to that for CapitaMalls Asia which I had an investment in before. Similarly, PREH's Chinese investments will take time to deliver the goods. 





PREH is definitely not for the impatient investor. 

Although not comparable in many ways, for something similar in terms of gearing and EPS, the purist income investor might be more interested in Croesus Retail Trust (which holds Japanese commercial properties) and regular readers know that I have a significant investment in Croesus Retail Trust.

...

At the moment, I have a smallish exposure to PREH and I am likely to add to my position if its stock price should decline further.

I like PREH's longer term growth story and I am quite willing to wait for it to do better.

I bought into my investments in both OUE and Wing Tai Holdings at a 50% discount to NAV or more. 

So, I will probably add to my investment in PREH using the same yardstick.






Related posts:
1. Perennial Real Estate Holdings.
2. Perennial China Retail Trust.
3. Croesus Retail Trust.
4. CapitaMalls Asia.

Pay down mortgage or beef up emergency fund?

Dear AK - 

Thank you for all your sharing, I have learnt so much from your blog.

 

I have one quick questions that I am not sure if you have touched on previously.

 

My situation is that I am expecting to receive a lump-sum payment by end of this year, an amount that while would be meaningful for me, and around 12 months my monthly expenses.

 

I currently have a separate emergency fund allocation of 4 - 6 months monthly expenses buffer.

 

I am wondering if it would make sense for me to use this lump-sum payment that I would be receiving to pre-pay my mortgage. 

 

Or shall I keep it into an emergency fund account (One UOB/ OCBC 365)

 

Thanks for your thoughts.

Best regards

 

Hi,

If the interest rate on your home loan is much higher than the interest rate you could receive from UOB ONE or OCBC 360, then, it makes sense to pay down the home loan.

I don't know how old you are but if you are older than 30 years old, you might want to beef up your emergency fund. See: http://singaporeanstocksinvestor.blogspot.sg/2015/05/how-much-should-we-have-in-our.html

Best wishes,
AK


We want to remember that there is a cost for holding liquidity but because it is important to have liquidity, bearing some cost to do so is acceptable.

We are lucky that in the current low interest rate environment, it is also less costly to do so.

When will it rain again? You tell me.

Related post:
UOB ONE or OCBC 360?