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actually they may be on track. just offering a possible way to look at it.
referring to slide 20, it says 50% investment in SG is their long term target (didnt give themselves a deadline, unless they did in a previous announcement?). if they shifted 13% over FY2022, and i assume the same rate over the next 3 years, they would cross the 50% mark by end FY2025.
also on slide 20, "S$1.0 billion of its proprietary capital into investments outside China by 2023". i dont know what proprietary capital refers to exactly, but if i take the total of their "current portfolio" on slide 12, which is 4127M, 1B of that would be about 24%. if i relate it to the para above, 13% today to 24% by end 2023, seems close enough to the ~13% shift each year.
furthermore on slide 14, it says 87% of their debt matures within 1 year. so they havent matured yet. i dont think they can do much shifting of funds until they do.
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25% was mentioned in their earlier slides dated in early 2022, where they aim to have 1 billion of investments/cash in Singapore by end 2022.
It was cited in the earlier thread discussions here
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SBB at 0.4X P/B is an attractive way to "accrue value" to shareholders, but does it always hold true in the great scheme of things?
Money is a commodity and YZJFH is in the business of (1) investing it in financial products, and (2) managing AUM. It is not like a company that has to decide to spend money on CAPEX for business expansion and then able to mortgage part of that CAPEX to get loans. YZJFH uses and manages the commodity directly to get returns. In such commodity type business, scale and track record are critical towards success.
Every single dollar into SBB at 0.4X P/B, means a single dollar taken away from (1) and (2). It reduces their opportunity to scale and does not contribute towards them building a track record. As YZJFH is only starting out, it needs capital to seed their FUM and they need plenty of it. For contrast, Capitaland Investment is needs to folk out ~20% seed money, while YZJFH's 1st 2 funds suggest it targets to seed ~45% of FUM. Of course it is not impossible for SBB-ed shares to be placed out in the future (I remember another S-Chip China Sunsine managed to place out a decent single digit percentage of its shares for a profit that was subsequently recognized to their P/L). But we probably can't affirm that always happening.
With ex-Chairman Ren coming out of retirement and taking on an executive role in YZJFH, sometimes one just needs to let the jockey does its work, rather than 2nd guess them accordingly to how we individually think how it should be done. We are OPMI after all.
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Thoughts on what YZJ FH can look like 3 years down the road just by following the path it has set out now. Some discussions on T Rowe's exit has been touched on in my previous posts. Do take a look and let me know your thoughts!
https://www.thesquirrelsdrey.com/post/ya...gs-game-on
Please do your own due diligence. Any reliance on my posts is at your own risk.
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thanks squirrel,
i largely agree with the post. two quick points for me, first is the SBB 10% per year assumption i think is aggressive. doing that for one year is surprising already (what other company on sgx has done so?), so i cant imagine for three. fantastic if they do, i wouldnt use it for calculations.
second is the key risk to get comfortable with is the "everything is fine until it isn't" risk which is captured in the table you displayed under the "Recovery in China Property Sector". in one year, 86% performing debt fell to 53%. thats the main thing i need to convince myself before investing, which comes down to personal assessment regarding trust in mgt, or conservatism in assumptions and in deploying capital etc.
weijian -
the projected div yields you mentioned are calculated by
ROE * equity * payout ratio / number of shares / share price
if i use the first iteration:
0.08 * 3923M * 0.4 / 3306M / 0.37 = ~10.1%
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