Asian Pay Television Trust (APTT)

[mobo]

Hi Mobo, that is a good analysis on your part.

One forumer here have pointed out this impending possibility (shanrui if I am right), you could read the threads that VB members has posted here with respect to Asian Pay TV trust to get a better understanding of how their dividends will be funded and the impending risks that this business face in the near future. Start from the first page

Thanks CY09. I will try and read through this thread and read up other research when I have more time.

But seriously I hope this is not the same kind of stunt that got FSL into the trouble it's in now. Considering all the bad press around its predecessor Macquarie, I would have thought the managers would at least tone down some of the "xiao dai ji".

[Nick]

it is possible that they have high non-cash expenses like depreciation, hence the business is generating positive cash flow after deducting off depreciation.

E.g. Company A: cash revenue (+250), expenses in 1) labour (-50), 2) Depreciation expense (-300). Reported Loss (-100),
cash flow that is generated minus depreciation (+200)

The problem is in real life even if you are a crazy capex skimmer, at best one can decrease the replenishment ratio to 30-40% of depreciation temporarily. That might help a fair lot, but without looking at the numbers in detail, it still seems unlikely one can turn from red to 9% dividends just by capex skimming.

Even if this can be done, wouldn't such a stunt spell disaster a few years down the road? They will be forced to raise capital at uncompetitive prices by then...

The pro forma financial statements in the prospectus do forecast profits in FY 13 and FY 14 of $54 and $75 million respectively. If I am not mistaken the reason for losses was due to high interest expense from bank loans, losses on derivative instruments and shareholder loans. The latter were actually 'dividends' paid to its Macquarie shareholders. The financial statements pre-IPO should be interpreted very differently from the post-IPO ones. There are a wealth of postings shared by fellow buddies in this thread which could be useful to you.

The Fund do incur capex as stated in the forecast cash-flow statement.

FY 2014 (Forecast)

Ops CF: $190 mil
Capex: ($40 mil)
Interest Exp: ($42 mil)
FCF: $108 mil
Project distribution in 2014: $118 mil

(Not Vested)

[BlueKelah]

YIELD TRAP

No Value or margin of safety,

You buy you liao

[Nick]

1H 2013
Key Highlights
• The financial results for the period ended 30 June 2013 are consistent with expectations. APTT is on track to meet the forecasts outlined in the Prospectus
• Distribution of 4.80 cents per unit (cpu) declared for the period ended 30 June 2013
• Re-affirm distribution guidance of 4.13 cpu for the six months ending 31 December 2013
• Entered into foreign exchange hedges, reducing the exposure of APTT to movements in the Singapore dollar against the Taiwan dollar

http://infopub.sgx.com/FileOpen/APTTResu...eID=251867 [Press Release]

http://infopub.sgx.com/FileOpen/APTT30Ju...eID=251869 [PPT Slides]

http://infopub.sgx.com/FileOpen/APTTSGXR...eID=251868 [Report]

This reminded me of the MIIF's result presentation style and timing of release ! Decent results with distributions meeting their forecast. While subscriber base for the 3 segments and digital penetration are increasing, there seems to be a decline in ARPU ? Any thoughts on their results ?

(Not Vested)

[Nick]

Asian Pay Television Trust , BUY (Initiating Coverage), S$0.91 Bloomberg: APTT SP
Slower growth, but oversold
Price Target : 12-Month S$ 0.97
By: Sachin MITTAL +65 6398 7950
Suvro Sarkar (65) 6398-7973

https://groups.google.com/forum/#!topic/...5ettvtfy1o [51 pg report can be downloaded at this link]

Any buddies vested in this guy ?

(Not Vested)

[Nick]

APTT is currently trading at 87.0 cents (with 4.8 cents dividend CD). It has guided payment of 4.13 cents dividend for 2H 13 which gives an annualized yield (after XD, 8.26 cents DPU) of 10% - this makes it the second business trust (after RMT) to cross into the double digit yield range.

CIMB issued a short report covering the latest 1H 13 results - https://brokingrfs.cimb.com/q-oDBX1qGXqj...f8_rI1.pdf

(Not Vested)

[momoeagle]

Ever considered that the next generation of TVs will probably support AirPlay and similar technologies, such that next generation TVs will play content primarily from tablets?

Shows from the apps on the tablets are
1) Mostly free
2) Much wider variety

Competition in this area comes not just from other pay TV operators on the same shores, but from international operators on the internet platforms. Such competition has to be taken into account.

This is much like how Apple, a company who deals primarily with computers and servers and laptops in the past, suddenly steps into the phone industry and threw many off guard.

[Drizzt]

you do note that when we talk about legalized viewing, these new entrants will need to pay tariffs/rates to the TV company/content provider, or they have to provide it themselves. those are barriers to entry.

case to point you can say about tudou or youku watching, but youku and tudou have to pay tariffs to TVB (recent deal when investigating TVB 511).

if it is so easy, Toggle would have many many content and singtel's mio tv would have an easy time.

if content is not an issue, why is google talking about bidding record for the best content in the world right now (not the BPL but the NFL sunday, currently being held by DIRECTV)

there is a barrier to provide that internet streaming. the question is more or less.

[momoeagle]

Well, those apps on the app store aren't exactly very new entrants. And yep, they are indeed hit by soaring copyright costs.

But is it prudent to discount or disregard them in the considerations? It is like betting that these companies will eventually shut down, or betting that the younger generation, those who will form new households, will not consider using this set up.

In terms of apps, we have not just Tudou or Youku. There's also PPS, PPTV, LeTV, Funshion, Sohu and perhaps more I have missed. There's still YouTube where movies and drama episodes are online, and allowed online. I don't suppose Taiwanese know Vimeo and DailyMotion. Of course, I won't deny that there will be grey areas here and there by these operators. But hey, even such grey areas should be taken into account too!

In fact, our dear Temasek Holdings has invested into Tudou. Perhaps they do recognize the relevance of Internet TV Operators.

The key thing to consumers here is choice. There is no requirement that says that they have to watch TVB shows, or any shows that are heavily licensed.

Then again, all these still doesn't mean APTT will do badly. Businesses having competition is normal stuff, and it will be how they handle the competition.

[Nick]

Macquarie APTT Management Pte. Limited as Trustee-Manager of Asian Pay Television Trust (“APTT”) today notes that APTT will announce its September 2013 period end financial results before the start of market trading on Tuesday, 12 November 2013.

A bit surprised to see its share price closing at 77.0 cents today which translates to a guided dividend yield of 10.7% (using annualized 2H 13 DPU of 4.13 cents). Probably one of the highest yielding companies listed in SGX currently.

(Not Vested)