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(27-02-2012, 09:40 PM)tanjm Wrote: It appears to have a fully diluted (all warrants exercised) operational cashflow (before debt principal repayment) of 2 cents per share, a gross property yield (i.e. not counting expenses) of about 10%, freehold properties all over the country, and a decent debt maturity profile (it appears to have fully exchanged its legacy CMBS debt for somewhat longer term debt). A fully diluted NAV/sh of 29 cents.
From the last announcement , as of 13 Feb 2012, there are 192,502,336 outstanding warrants not exercised.
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(28-02-2012, 10:33 AM)lonewolf Wrote: (27-02-2012, 09:40 PM)tanjm Wrote: It appears to have a fully diluted (all warrants exercised) operational cashflow (before debt principal repayment) of 2 cents per share, a gross property yield (i.e. not counting expenses) of about 10%, freehold properties all over the country, and a decent debt maturity profile (it appears to have fully exchanged its legacy CMBS debt for somewhat longer term debt). A fully diluted NAV/sh of 29 cents.
From the last announcement , as of 13 Feb 2012, there are 192,502,336 outstanding warrants not exercised.
Yup..
and the expiry date is Jun 2012..
So Saizen will either end up with a massive cash hoard to buy properties to improve DPU or shareholders will suffer a massive DPU drop...
Either way, there is no more re-finnancing or default risk..
I do pray that with the deep discount to NAV, some majority shareholder should just force the trust to sell off all properties and return the cash...
then everyone will HUAT BIG BIG !!!
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And so how will the board and management draw their salaries? Kill the golden goose?
How likely is this to happen? Who are the major stakeholders??? U see what I mean?
> I do pray that with the deep discount to NAV, some majority shareholder should just force the trust
> to sell off all properties and return the cash... then everyone will HUAT BIG BIG !!!
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(28-02-2012, 05:12 PM)Contrarian Wrote: And so how will the board and management draw their salaries? Kill the golden goose?
How likely is this to happen? Who are the major stakeholders??? U see what I mean?
> I do pray that with the deep discount to NAV, some majority shareholder should just force the trust
> to sell off all properties and return the cash... then everyone will HUAT BIG BIG !!!
Yeah... Well..
My only consolation is that the price now is at a severe discount to IPO price... Majority shareholders who were still holding on, is highly possible to be in the red still... IPO price at SGD 1.00 leh...
And finally this REIT is giving out dividends...
Almost all the properties are FREEHOLD..
Thus, it do make a good long term investment if management continues to use the cash hoard to buy properties to increase DPU..
Of course they will milk the trust via acquisition fees and management fees... But then, if the trust performs, shareholders will be happy...
The only risk i am afraid of is NATURAL DISASTER...
Remember during that FUKUSHIMA DISASTER and TSUNAMI, Saizen properties is almost close to being toppled.. LOL...
Hope they wise up and bought earthquake insurances etc..
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Just so happens...
Saizen made an acquisition today..
http://info.sgx.com/webcoranncatth.nsf/V...200400C73/$file/20120228_Announcement_Acquisition_of_The_Palms_Denenchofu.pdf?openelement
I can see that they are trying to increase DPU via acquisition to offset the DPU drop when all the warrants are converted in Jun 2012...
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28-02-2012, 11:43 PM
(This post was last modified: 28-02-2012, 11:44 PM by tanjm.)
Actually, I said my calculations are "fully diluted". By that I mean all warrants exercised. Their current NAV is 32 cents, but fully diluted is 29 cents which is still a massive margin over the current share price. Their operating cashflow (fully diluted) is 2 cents a share, which implies that the current annualised 1.2cents/sh is sustainable. Their properties are mostly (or all) freehold. MktPrice/fully diluted NAV is 48% - surely one of the lowest among the reits.
They have a cash hoard of 6 billion yen (about 6 SGD cents per share fully diluted), of which they have currently announced spending 0.5 billion this evening on a tokyo property.
Admittedly little chance of "organic growth", but their operations look stable over the last several years (rental yields, occupancy rates).
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For a REIT, buy a growing country... one where assets are excellent and got first choice to be taken up, can revalue upwards...
Then u get the capital gains + the yield...
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(28-02-2012, 11:43 PM)tanjm Wrote: Actually, I said my calculations are "fully diluted".
OK. I think I finally understand what you are driving at. Sorry for being slow. 
I'm one of those who bought during the IPO and depsite exercising the rights and warrants at a deep discount, I'm still negative 60% capital and negative 52% overall. My consolation is that my stake is relatively small.
While I agree tha Saizen is compelling at current level but it current yield at 8.5% is comparable to Suntec, Cambridge, Cache and LMT. AIMS, Sabana and First has higher yield. (Yield from reitdata.com)
So if I'm an investor looking at the above list, why would I want to put my money in Saizen?
(Disclosure: Vested in Saizen, Cache, AIMS and SuntecREIT)
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Let me restate it. Please someone do check my numbers.
By my calculation, if all warrants are exercised, Saizen REIT has (on a per share basis)
2 cents operating cash flow (not even counting how the additional cash from the warrants exercise is used)
29 cents NAV
6+ cents of cash (not counting the recent purchase of a tokyo property).
By my estimate, if all cash is deployed into property, an additional 0.5 cents of operating cash flow
Most reits pay 90 to 100% of their available cashflow in dividends, Saizen's payout ratio is about 60%. With all shares fully diluted, Saizen could potentially pay 1.6 to 2 cents per share at a 80% payout ratio for a yield of 11% to 14% at current share price, if it stopped making loan principal repayments.
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Saizen has reported NAV of 32 SG cents (warrants of 9 cts not exercised yet).
However, the freehold properties are in Japan and hence denoted in Yen, which is super strong now. Supposed Yen devalues substantially, the yield and NAV will drop. But, even if Yen drops by half, we till have a NAV of 16 SG cents and yield of nearly 4.5%.
It would be a good deal for current shareholders if not much further warrants are exercised.
I wouldn't be surprised that after June 2012 when all warrants expire, Saizen will follow the footsteps of AIMS and FCOT to do a share consolidation of 5 for 1.
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