Accordia Golf Trusts

This offer seems to have finally reached a ending point, maybe. I re-read all the posts contributed by all the buddies especially over the past 1 year and I felt really glad and thankful for all the inputs. Too much silent fellow unitholders though. At this point, i would like to quote this post I made previously on the EGM to vote on the sale of the courses.


https://www.valuebuddies.com/thread-5363...#pid155668

(08-08-2020, 09:53 AM)weijian Wrote: Update on proposed divestment: https://links.sgx.com/FileOpen/AGT-Updat...eID=626900

The Revised Purchase Consideration translates to an implied purchase consideration of S$0.772 per Unit5, which represents: 

a 19% discount on the IPO price of S$ 0.95 

(19-08-2020, 04:00 PM)Gaudente Wrote:

(08-08-2020, 09:53 AM)weijian Wrote: Update on proposed divestment: https://links.sgx.com/FileOpen/AGT-Updat...eID=626900

The Revised Purchase Consideration translates to an implied purchase consideration of S$0.772 per Unit5, which represents: 

a 19% discount on the IPO price of S$ 0.95 

And the age old saying "It's Probably Overpriced" for IPO comes true.

Its not that bad actually.
If one had bought AGT at any point of time (incl at IPO) and receive all distributions and held till the trust delisted (assuming it happens), one would have made a small positive gain. Better than bank interest rate annualised.
The units never traded near IPO price from the opening bell of day 1, so most would be ok.

(20-08-2020, 12:19 AM)Mushy Wrote: Its not that bad actually.
If one had bought AGT at any point of time (incl at IPO) and receive all distributions and held till the trust delisted (assuming it happens), one would have made a small positive gain. Better than bank interest rate annualised.
The units never traded near IPO price from the opening bell of day 1, so most would be ok.

Rather than comparing with bank interest, we may want to compare with Singapore Saving Bonds (SSB) in our context. Granted AGT IPO-ed in 2014 and SSBs came online in 2015 but it would probably still be apt to use SSB as a benchmark. At those times in 2015, SSBs were offered at ~1-3% interest rates from the 1st to 5th year.

Also rather than looking at the absolute gains, we have to really compare the gains after adjusting for risk - So using the equity risk premium (how much equity investors demand as a premium over the risk-free rate) and working backwards by deducting the equity risk premium (~3-4%), while I don't have the numbers, I do not think it is "not that bad actually" for IPO investors.

Nonetheless, for the same stock, different people probably have different outcomes and it would be determined by the price at which one determines there is value and buy in. These are really the first principles in value investing.

(20-08-2020, 08:00 AM)weijian Wrote:

(20-08-2020, 12:19 AM)Mushy Wrote: Its not that bad actually.
If one had bought AGT at any point of time (incl at IPO) and receive all distributions and held till the trust delisted (assuming it happens), one would have made a small positive gain. Better than bank interest rate annualised.
The units never traded near IPO price from the opening bell of day 1, so most would be ok.

Rather than comparing with bank interest, we may want to compare with Singapore Saving Bonds (SSB) in our context. Granted AGT IPO-ed in 2014 and SSBs came online in 2015 but it would probably still be apt to use SSB as a benchmark. At those times in 2015, SSBs were offered at ~1-3% interest rates from the 1st to 5th year.

Also rather than looking at the absolute gains, we have to really compare the gains after adjusting for risk - So using the equity risk premium (how much equity investors demand as a premium over the risk-free rate) and working backwards by deducting the equity risk premium (~3-4%), while I don't have the numbers, I do not think it is "not that bad actually" for IPO investors.

Nonetheless, for the same stock, different people probably have different outcomes and it would be determined by the price at which one determines there is value and buy in. These are really the first principles in value investing.

In my opinion, there were two primary reasons for the poor unit price and both don't have much to do with the operational performance of the underlying assets.

1) Pure Business Trust (REITs in disguise such as hospitality and Ascendas India don't count) - Whatever the reason might be, Business Trusts in Singapore have pretty much accumulated a foul reputation among investors as hotbeds for funky business. Generally none of the business trust unit prices have been satisfactory since their respective IPOs in SGX. 

2) Lack of clarity on distribution basis - Business Trust are sold as income producing annuities and pretty much attract a crowd of investors who would prefer to see stable and sustainable distributions. This can be done either through an absolute targeted DPU per year or a clear basis for determining distribtuion (a.k.a x% of profits or adjusted cashflow calculation properly defined). AGT does none of this. Its distributions fluctuate wildly with no correlation to either operational performance, profits or cashflow. Management just plays around with a "Reserve" line item and the resulting DPU for each period comes across as purely random and discretionary. This wouldn't be a problem for a normal PLC, but sort of goes against the proposition of a Business Trust.

(20-08-2020, 09:22 AM)mobo Wrote:

(20-08-2020, 08:00 AM)weijian Wrote:

(20-08-2020, 12:19 AM)Mushy Wrote: Its not that bad actually.
If one had bought AGT at any point of time (incl at IPO) and receive all distributions and held till the trust delisted (assuming it happens), one would have made a small positive gain. Better than bank interest rate annualised.
The units never traded near IPO price from the opening bell of day 1, so most would be ok.

Rather than comparing with bank interest, we may want to compare with Singapore Saving Bonds (SSB) in our context. Granted AGT IPO-ed in 2014 and SSBs came online in 2015 but it would probably still be apt to use SSB as a benchmark. At those times in 2015, SSBs were offered at ~1-3% interest rates from the 1st to 5th year.

Also rather than looking at the absolute gains, we have to really compare the gains after adjusting for risk - So using the equity risk premium (how much equity investors demand as a premium over the risk-free rate) and working backwards by deducting the equity risk premium (~3-4%), while I don't have the numbers, I do not think it is "not that bad actually" for IPO investors.

Nonetheless, for the same stock, different people probably have different outcomes and it would be determined by the price at which one determines there is value and buy in. These are really the first principles in value investing.

In my opinion, there were two primary reasons for the poor unit price and both don't have much to do with the operational performance of the underlying assets.

1) Pure Business Trust (REITs in disguise such as hospitality and Ascendas India don't count) - Whatever the reason might be, Business Trusts in Singapore have pretty much accumulated a foul reputation among investors as hotbeds for funky business. Generally none of the business trust unit prices have been satisfactory since their respective IPOs in SGX. 

2) Lack of clarity on distribution basis - Business Trust are sold as income producing annuities and pretty much attract a crowd of investors who would prefer to see stable and sustainable distributions. This can be done either through an absolute targeted DPU per year or a clear basis for determining distribtuion (a.k.a x% of profits or adjusted cashflow calculation properly defined). AGT does none of this. Its distributions fluctuate wildly with no correlation to either operational performance, profits or cashflow. Management just plays around with a "Reserve" line item and the resulting DPU for each period comes across as purely random and discretionary. This wouldn't be a problem for a normal PLC, but sort of goes against the proposition of a Business Trust.

Netlink BNB Tr could be a Nice Model ? Increasing Capital gain and DPU distribution.