Asian Pay Television Trust (APTT)

[momoeagle]

Makes an interesting study now, to reach 10% yield.

I'm not sure if this was listed before, but I did a google search and found this
http://sg.finance.yahoo.com/news/asian-p...00163.html

This particular paragraph was pretty interesting:
"After being unsuccessful in divesting the company, Macquarie International Infrastructure Fund (MIIF) and Macquarie Korea Opportunities Fund (MKOF) sold it to retail and institutional investors through the Singapore Exchange, in the form of Asian Pay Television Trust."


[Not vested]

[Nick]

Makes an interesting study now, to reach 10% yield.

I'm not sure if this was listed before, but I did a google search and found this
http://sg.finance.yahoo.com/news/asian-p...00163.html

This particular paragraph was pretty interesting:
"After being unsuccessful in divesting the company, Macquarie International Infrastructure Fund (MIIF) and Macquarie Korea Opportunities Fund (MKOF) sold it to retail and institutional investors through the Singapore Exchange, in the form of Asian Pay Television Trust."


[Not vested]

Hi Momo,

APTT was the old Taiwan Broadband Communication (TBC) which MIIF held 47.5% stake in previously.

On another note, CIMB released a fairly detailed report today - https://brokingrfs.cimb.com/in3z3Z9ikMDa...e-uyI1.pdf - arguing that APTT should be treated a high yield growth play as it will expand into neighboring areas in the near future.

(Not Vested)

[Nick]

APTT ANNOUNCES FINANCIAL RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2013

Key Highlights
• Performance in line with the forecasts outlined in the Prospectus1
• Revenue for the quarter of S$78.6 million
• Asset EBITDA2 for the quarter of S$50.7 million
• Re-affirmed distribution guidance of 4.13 cents per unit for 2H 2013

http://infopub.sgx.com/FileOpen/APTTScri...eID=263723 [Management Briefing Script]

http://infopub.sgx.com/FileOpen/APTTSGXR...eID=263699 [SGX Report]

http://infopub.sgx.com/FileOpen/APTT30Se...eID=263698 [Press Release]

http://infopub.sgx.com/FileOpen/APTT30Se...eID=263700 [PPT Slides]

1) Results were operationally steady as expected from a 'cash-cow' asset providing a near utility service to a captured market. It is likely the EBITDA will reach the forecast $200 million for FY 2013.

2) What was interesting in this report is that plans to expand into a nearby province was confirmed (as elaborated in the CIMB report last week) and this will be significantly DPU accretive. APTT already trades at nearly 11% yield.

3) As always, the major bug bear is the high leverage with net debt to ebitda stretching to almost 5. But if EBITDA can grow steadily, we might see this leverage ratio falling with time.

4) CIMB added their thoughts here today - https://brokingrfs.cimb.com/q-oDBX1tHHCZ...h0HRk1.pdf [Report]

Any thoughts from fellow buddies ?

(Not Vested)

[Dividend Warrior]

The management says that the capex for expansion will be funded by debt.

Just wondering, With the leverage already high, is it prudent to take on more debt?

Not vested.

[valuebuddies]

In SGX history, it seems to me that no business trust is successful, even the one sponsored by Li Ka-Shing which I still stuck with.

[jim_city]

i imagine this to be like a taiwanese starhub (minus the phone service)... i see the taiwanese ah mas in Taichung catching their fix of some hokkien dramas every nights while the younger ones hook on to the broadband services to watch Kang Xi Lai Le online... =)

Was re-reading the prospectus again and I must admit they paint a high growth picture.

The main difference with starhub is that instead of leasing the network infrastructure, they own it. It appears that quite a bit of investment has already been put in (such as cable lines and fibre-optic lines to households within its franchise areas). The structure of ownership of these cables is a bit complicated though. They do mention in the prospectus that investments and upgrades would continue into 2014.

Based on the announcements, the expansion would not affect 2013 and 2014 results though.. if they successfully penetrate the market though, the results might show in few years down the road.

I do not know if there is a sufficient margin of safety to chase after the yield at 76 - 77 cents.. but it actually seems very compelling to me right now especially since it is 20% cheaper now than at IPO!

I just bought a few lots on Wednesday.

vested

incidentally, was thinking of looking in hpht as well but couldn't find the time in the past week to do so.. looks interesting to me as well.

[valuebuddies]

I just noticed about 130million of tax provision for additional tax payable since 2006! If APT manage to seek exemption for this, it will be extra for the p&l.

[newyorkcityboy]

Are you concerned about the Debt load of APTT?

[jim_city]

Are you concerned about the Debt load of APTT?

I feel that the position has improved a lot from Pre-IPO to Post-IPO... I think Macquarie did a brilliant job of screwing the IPO subscribers.

In my own (not very professional) opinion is that they cleaned up the books in the IPO exercise. The clean-up cost has been paid for by the subscribers of the IPO (18% of the IPO proceeds or 252.8 million was used to pay down debts and to unwind some interest rates currency swaps).. They screwed themselves up royally by entering into those positions previously....

The balance sheet looks decent now I think. Gearing is still high @ 38.6% but i think it is not crippling. At least the loan with the insane interest rate has been paid off now..

See the latest announcement:
http://static.macquarie.com/dafiles/Inte...on.pdf?v=3

I think the more serious doubts I have are as follows:
- the uncertain tax position of the group
- management's ability to appropriately hedge and refinance without screwing up like before under MIIF
- I don't trust the TRUSTee-Manager - the words that jumped out at me in the prospectus was "the Trustee-Manager has opted to receive payment of its base fee in cash"... why don't they believe in the trust enough to receive units instead?

But the reason why I have a small position is more straightforward. I couldn't resist the yield! Not to mention, the current price and financial position looks attractive now, esp since NAV is 91 cents. With each passing year, my margin of safety improves by 10%. if nothing goes wrong in the next 5 years, i would have recovered 50% of my investment cost in dividends...

[neoscan]

Are you concerned about the Debt load of APTT?

I feel that the position has improved a lot from Pre-IPO to Post-IPO... I think Macquarie did a brilliant job of screwing the IPO subscribers.

In my own (not very professional) opinion is that they cleaned up the books in the IPO exercise. The clean-up cost has been paid for by the subscribers of the IPO (18% of the IPO proceeds or 252.8 million was used to pay down debts and to unwind some interest rates currency swaps).. They screwed themselves up royally by entering into those positions previously....

The balance sheet looks decent now I think. Gearing is still high @ 38.6% but i think it is not crippling. At least the loan with the insane interest rate has been paid off now..

See the latest announcement:
http://static.macquarie.com/dafiles/Inte...on.pdf?v=3

I think the more serious doubts I have are as follows:
- the uncertain tax position of the group
- management's ability to appropriately hedge and refinance without screwing up like before under MIIF
- I don't trust the TRUSTee-Manager - the words that jumped out at me in the prospectus was "the Trustee-Manager has opted to receive payment of its base fee in cash"... why don't they believe in the trust enough to receive units instead?

But the reason why I have a small position is more straightforward. I couldn't resist the yield! Not to mention, the current price and financial position looks attractive now, esp since NAV is 91 cents. With each passing year, my margin of safety improves by 10%. if nothing goes wrong in the next 5 years, i would have recovered 50% of my investment cost in dividends...

Be careful. Gearing is not 38.6%, its almost 120%....

Also, DPU of 8c is not suitable in the long run if their EPS maintains below 4c...

in few year time, they will have to adjust dpu to 4-5c...bringing down share price by 20%, and yield to 6-8%

This is exactly what happened to hph trust....

Vested before and sold...