Tuesday, July 14, 2015

Lippo Mall Retail Trust; Capitaland Retail China Trust

I had shortlisted 2 REITS to focus on in my previous post - Lippo Mall Retail Trust and Capitaland Retail China Trust

Let's start with Lippo Mall first. 

The numbers for this year 2015 1Q is pretty good. 
NAV= 0.4164
P/NAV = 0.877 (that's attractive)
P/E = 15.56
Yield = 5.5%

What's there not to like about it?
ROE is at a dismal 3.15%
Current ratio is 0.562%
Indonesia's economy is not forecast to grow much. Less growth, less people spending, less tenants willing to pay for a mall space. 
Currency issues as ruppiah is steadily dropping against the SGD.

The other thing would be its very dismal performance in 2014. If you review the financial reports for 2014, the DPU dropped, the revenue growth was negative. 

The current price was hovered around 0.36 for awhile now. I'm half hearted about this share. This may have to drop a little further in order to make it sweeter for me to bite. 

Capitaland Retail China Trust 

The numbers are from Yahoo Finance which typically takes them from the annual reports. 

PE= 9.19
PB: 0.99 
ROA = 3.28
ROE - 11.14
Book Value = 1.65 
Current ratio = 1.50

What isn't too good? Well, the negative cash flow position is pretty worrying. However, the cash flow from operations is actually increasing year on year, and the net cash flow is positive as well. Overall, the China economy grew 7% this quarter, and this is good since people are more likely to spend more. I also think the chinese culture is quite like singapore, taiwan and hongkong where there is a trend towards shopping in nice malls. Capitaland has a good record in malls and should have the know how of a good tenant mix. 

Well, looks like i am not 100% sold in on either of these two REITS. Got to review more! 

No comments:

Post a Comment