K-Green Trust

(15-05-2013, 12:03 PM)structuredfinancier Wrote: With strong parentage of Keppel Corp, doesn't this mean KGT is capable of raising debt to make future acquisitions and in turn boost NAV?

what meaningful acquisitions can u see for this trust going forward? In the local context, even if there are some assets to be privatised and spun-off into a trust, what can the management do to increase DPU? SMRT has taught us not to depend on price increases when national interests are at stake. Unlike the AEI abilities of retail trusts, utilities trusts can do very little on their own to increase prices and yet can do very little to control energy costs.

Cityspring and Singtel have also shown that regulatory problems are tough if the trust is to venture overseas for their acquisitions.

so to me - it cannot improve DPU in a meaningful manner if it stays local; it is very risky if it goes overseas. I'll rather forget abt this biz model for the risk/reward...

Wah thanks all for your valuable input. Lots to learn and certainly a good experience for me!

there's a good reason why the parent company spin k reit off instead of keeping it in their books
if you hold it for like 50 years, the NAV will eventually come down to $0.00

So if you plan to those this counter for the long term, you should strongly consider whether the yield received is high enough to compensate for the above point.

Therefore logically this trust should have a higher payout then the average reit and have little to no debt.

(15-05-2013, 04:24 PM)felixleong Wrote: there's a good reason why the parent company spin k reit off instead of keeping it in their books
if you hold it for like 50 years, the NAV will eventually come down to $0.00

Yes, if the REIT Mgr don't do any new acquisitions for the next 50 years. But, unlikely to be true as they're highly motivated to increase their AUM as that means more $$$ for them.

I don't think it's a good comparable with KGT (even in principle, you're right) as for Property assets, it's a lot easier to do acquisitions (or even sell some) and they can easily build up enough critical mass. It kind of allow some diversification ie. if we really move forward 50 years later, perhaps there'll be a good staggering of leases expiring every year and the impact will be more gradual?

Further, IMO, the key reason for KepCorp to give out KepREIT as dividend in specie is likely to improve the liquidity as they were holding >70% then.

For now, I'm most tempted to treat KGT as my MMF (Money Mkt Fund) whenever they trade closer to NAV... 2-3% Net Yield is not too bad, I convinced myself...

(15-05-2013, 01:49 PM)AlphaQuant Wrote:

(15-05-2013, 12:03 PM)structuredfinancier Wrote: With strong parentage of Keppel Corp, doesn't this mean KGT is capable of raising debt to make future acquisitions and in turn boost NAV?

what meaningful acquisitions can u see for this trust going forward? In the local context, even if there are some assets to be privatised and spun-off into a trust, what can the management do to increase DPU? SMRT has taught us not to depend on price increases when national interests are at stake. Unlike the AEI abilities of retail trusts, utilities trusts can do very little on their own to increase prices and yet can do very little to control energy costs.

Cityspring and Singtel have also shown that regulatory problems are tough if the trust is to venture overseas for their acquisitions.

so to me - it cannot improve DPU in a meaningful manner if it stays local; it is very risky if it goes overseas. I'll rather forget abt this biz model for the risk/reward...

According to KGT's website, it says "K-GREEN TRUST is a business trust with an investment focus on "green" infrastructure assets in Singapore, as well as Asia, Europe and the Middle East."

Have they acquired any assets in Europe and the Middle East? From what I know, it seems that their assets are 100% in Singapore? Can anyone enlighten please? Thanks!

(15-05-2013, 11:50 PM)pantoo Wrote:

(15-05-2013, 01:49 PM)AlphaQuant Wrote:

(15-05-2013, 12:03 PM)structuredfinancier Wrote: With strong parentage of Keppel Corp, doesn't this mean KGT is capable of raising debt to make future acquisitions and in turn boost NAV?

what meaningful acquisitions can u see for this trust going forward? In the local context, even if there are some assets to be privatised and spun-off into a trust, what can the management do to increase DPU? SMRT has taught us not to depend on price increases when national interests are at stake. Unlike the AEI abilities of retail trusts, utilities trusts can do very little on their own to increase prices and yet can do very little to control energy costs.

Cityspring and Singtel have also shown that regulatory problems are tough if the trust is to venture overseas for their acquisitions.

so to me - it cannot improve DPU in a meaningful manner if it stays local; it is very risky if it goes overseas. I'll rather forget abt this biz model for the risk/reward...

According to KGT's website, it says "K-GREEN TRUST is a business trust with an investment focus on "green" infrastructure assets in Singapore, as well as Asia, Europe and the Middle East."

Have they acquired any assets in Europe and the Middle East? From what I know, it seems that their assets are 100% in Singapore? Can anyone enlighten please? Thanks!

From their website, you will see that all 3 assets are in Singapore. No overseas investments yet.

just to check, those 3 assets were there since it was listed right?
so far I don't remember K green taking in any new assets before
please correct me if I am wrong thanks ^^

(16-05-2013, 09:57 AM)felixleong Wrote: just to check, those 3 assets were there since it was listed right?
so far I don't remember K green taking in any new assets before
please correct me if I am wrong thanks ^^

Not at the moment but I guess it is important to only acquire new asset when it is yield accretive instead of acquiring for the sake of increasing its AUM.

because if K green wants to acquire similar kinda green assets, really very few in SG
they will probably have to look overseas, which is more difficult and higher risk.

Hi Friends

COuld someone help to explain why revenue and net profit can drop for K-Green Trust?
I thought based on the tariff agreement, K-Green should continue to enjoy stable revenue and net profit?


******
K-Green Trust net profit dropped 10.7 per cent to $3.9 million for the second quarter, from $4.3 million a year ago.

Revenue for the three months ended June 30 was down 27.0 per cent, at $16.8 million.

K-Green Trust, which invests in "green" infrastructure assets, saw net profit 10.3 per cent lower at $7.1 million for the six months ended June, while revenue dropped 19.5 per cent to $33.8 million.

Distribution per unit for the first half of the year remained stable at 3.13 cents, to be paid on August 15.