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December 26, 2006

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PRIME US REIT: Is this an opportunity?

At this point of writing, PRIME is trading at US$0.30. Its yield is now almost 20%, at US$0.06 ( base on FY2022). Trading a 0.44x book value, NTA is US$0.75. Let take a look at a few metrices. 1) Weighted Average Lease Expiry (WALE) is 4.1 years, which provides sufficient time to cushion any volatility in the stock market. 2) Weighted Average Debt Maturity is 2 years. This may raise some concerns here. Out of the US$449 million debt maturity in 2024, US$160 million can be extended to July 2026 ( 2 years extension ), bringing Weighted Average Debt Maturity to 2.7 years. Personally, I am not sure if this provide sufficient buffer time for PRIME to obtain new loan facilities. 3) Average leverage is 42%. This figure is still below the requirements of 50%. Summary: All investments come with RISK, some is higher while some is lower. At a yield of close to 20%, and trading at 0.44x book value, i think the risk is justified.

Singapore Kitchen Equipment Ltd: Brewing a nice dish for shareholders !

Singapore Kitchen(SKE) was listed on SGX in 2013 at a price of 20cts. It has hit a high of 25cts on 19th June 2014, a low of 7.3cts in early 2016. Investment Merits: 1) Company has only $0.4 million of long term debt vs a net cash position. 2) 2 main segment of business: 1) Distribution & Fabrication of kitchen equipment 2) Maintenance & Servicing: Abt 75% of revenue is accounted for Distribution & Fabrication of kitchen equipment, with 25% of revenue as recurring income. As years go by, i am sure the recurring revenue will keep increasing. 3) With robotic machinery, the product can automated and increase efficiency in kitchens. This may be a stepping stone for SKE to widen its client base. 4) Profit has grown from $0.11 million upon listing to $2.57 million in FY2016. Its ROA and ROE is 11.75% and 17% respectively. In the last 4 years of listing, SKE has slowly growing. 5) Decent dividend yield of 4.69% base on last traded price of 16cts. 6) Single digit PE of 9.

mDR: Entering the new era.

Adapt from the Questions and Answers for AGM 2020. Changing its investment portfolio to a 100% allocation to equities within a year. 1) As at end 2019, our investment portfolio allocation was 66% to equity and 34% to fixed income. During the recent market correction, mDR took advantage of price volatility and was active in swapping bond exposure for equity exposure. The asset allocation as of May-end 2020 was 80% equity and 20% fixed income. mDR will continue to unlock liquidity from its bond portfolio to increase the equity exposure as the recession runs its course and we expect to have 100% allocation to equities within a year. Next transformation phase into physical real estate with sustainable rental cash flow 2) The Group will continue to maintain the forward momentum to accelerate growth and create shareholder value and to improve its profitability, dividend and visibility. A financial crisis may present compelling distressed opportunities, in which case, the Group will work to

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