Saizen REIT

ASM not REIT mgr of Saizen. It is managed by entity owned by saizen chairman Arnold Ip, Raymond and gang.

For kin chan, 3x profit still don't take some off the profits. Bot in at distressed level.

(15-04-2013, 12:26 AM)opmi Wrote: ASM not REIT mgr of Saizen. It is managed by entity owned by saizen chairman Arnold Ip, Raymond and gang.

For kin chan, 3x profit still don't take some off the profits. Bot in at distressed level.

Kind of time-consuming for me to trace the history, but from the IPO Prospectus (pg 119),

History
Mr Richard Lo and Mr Yutaka Matsunaga started investing in residential real estate in Japanese regional cities in 1999. They were joined by Mr Arnold Ip Tin Chee and Mr Chang Sean Pey in 2000 and started institutionalising the investment management of regional residential real estate with the formation of the investment funds, JOF in 2002, and JOF II in 2004. In 2005, together with Mr Yeh V-Nee and Mr Raymond Wong Kin Jeon, they founded the Sponsor, which is the investment manager of JHYP and JHYP II.

IIRC, JHYP & JHYP II were subsequently liquidated and their Saizen shares were given out in proportion to their fundholders. Currently, ASM is the largest and only substantial shareholder of Saizen. As Kin Chan & V-Nee Yeh are the beneficial shareholder of ASMHL, there're both deemed to be substantial shareholders.

I did not trace the evolution of the Asset Mgr, Japan Residential Assets Manager Limited but Kin Chan is a non-Exec Director.

V-Nee Yeh has his fingers in many pies. value partners, ASM, chen hsong construction, etc etc.
I dont consider Kin Chan and Yeh as people calling the shots at the REIT mgr

Japan Residential Assets Manager Limited (V-Nee Yeh) buy 2,500,000 shares @ S$0.19 with total value of S$475,000.

http://info.sgx.com/webcoranncatth.nsf/V...10025B57C/$file/20130520_Form_3_V-Nee_Yeh_Final.pdf?openelement

(20-05-2013, 08:44 PM)ngcheeki Wrote: Japan Residential Assets Manager Limited (V-Nee Yeh) buy 2,500,000 shares @ S$0.19 with total value of S$475,000.

http://info.sgx.com/webcoranncatth.nsf/V...10025B57C/$file/20130520_Form_3_V-Nee_Yeh_Final.pdf?openelement

I have been following their recent trading activities in wonderment and admiration..... Sell High (before Q3 results), now Buy Low (After Q3 results). Good learning experience from the almost real time activities of a a well known Value Investing oriented practitioner...

In addition, some observations from their financials (may be wrong as rather difficult for me to understand - pls do kindly point out my mistakes),

1. JPY Weakness

Thanks to Abenomics, we saw JPY weakening against S$ by ~8.26% from 1H (Dec12) to Q3 (Mar13). This is also somewhat reflected in the NAV dropping from S$0.27 to S$0.25 (-7.41%). So, we're seeing the immediate impact of Abenomics now but have yet to see the 2nd part (reversal of deflation?) as it's perhaps still too early? Rental reversion is still at a slightly lower rate (-0.3%).

The impact on earnings is mitigated somewhat by new acquisitions.

As of today, JPY has weakened another ~7.8% (Dec12 as base) but this part may not impact the next DPU payout for Jun13 as much as it'd been hedged at closer to Mar13 rates.


2. Cash

They continue to maintain a sizeable amount of cash from Debts refinancing + previous exercise of warrants + sale of properties. Altho' Gearing is at a high of 39%, it's 31% net of cash. Aside from new acquisitions, what they're doing with these cash looks interesting and confusing to me...

For eg., they're using it for loan amortisation & "one-time" refinancing charges. The balance comes from earnings. So, altho' it sounded good that they're actually one of the rare (only one?) to do partial loan capital repayment from earnings, they're also tapping from Cash Reserves for their "one-time" refinancing charges. The Net impact is from Cash Reserves. If I'm not wrong, other REITs, which don't have the luxury of a huge Cash reserves, recognises such refinancing charges as part of their regular expenses. Further, while looking back a few quarters, I do see the "one-time" refinancing charges as a common recurring theme...

Anyway, it's good (for now) that they have this Cash. DPU for Jun13 can easily be determined by what the REIT mgr wants it to be....


Conclusion : I continue to stay vested as it's a good learning experience for me. But, I'll take the cue from the famous Value Investing practitioner on what can only be termed by TA practitioners as what I perceive to be Support & Resistance levels....

with the future expected depreciation in Yen (e.g. usd-yen is expected to reach 110 to 120 by year end, as forecast by major investment banks).

Will this easing lead to increase in asset value in the next few years? Will rental rate recover?
can we take reference from US?

key difference in Japan is that population is on the decline. not too sure about the locations of Saizen properties....Are the towns/cities still having population growth?

In the aftermath of a earthquake where residential housings have been destroyed/damaged, I heard that the govt did "reimburse" the local residents. Does this also apply to the properties held by SAIZEN Reits?

If so, in a way, the Japanese Govt is the insurer for SAIZEN Reits.

The jap govt has setup various mutual fund insuring residential property. I believe different mutual fund protect different type of property or different area. Not too sure how it work for saizen reit but i believe saizen should be insured.

At the current SGD-YEN rate, what would be the forward dividend yield?
A big appeal is the freehold status of properties. But older properties will cost more to maintain.

Also, depending on the location of Saizen properties, the potential for upside appreciation might be limited, regardless of the amt of monetary easing from the central govt.

Are most of the properties located in tier 1 cities such as Tokyo, Osaka?

Thank you.

Hi friends

when is the best time to buy Saizen Reits during the course of the FY? is it during the run up to the announcement of the dividend? when is typically the weakest quarterly results?

Thank you.