Twice Lucky in a Month? - Asian Pay Television Trust IPO

Previous post: [Upcoming IPOs - Croesus Retail Trust & Asian Pay Television Trust]

Introduction to Asian Pay Television Trust IPO
Asian Pay Television Trust will list in the shadows of Croesus Retail Trust that went live on 10 May to a tremendous investor appetite for the high-yielding IPO. So, will it be a repeat of the stellar performance of Croesus Retail Trust?

Key figures

1. S$0.92 to S$1.00 per share indicative price range
2. 7.29 to 8.25% dividend yield (2013-2014) on a semi-annual basis (30 June and 31 Dec) based on the highest offer price of S$1.00
3. S$1.4 billion expected to be raised
4. 9 cornerstone investors including Quantum Vehicle, the investing fund controlled by the legendary George Soros

[Link to lodged prospectus @ MAS here.]

If you are a new IPO investor, do check out my blog page on Guide to IPO Investing.
Even if you are a seasoned IPO investor, you may wish to check out 2012 and 2013 IPO listing performance at SG IPO Statistics for more insights to optimise your balloting chances!

Timetable
Prepare to start applications on 17 May till 27 May. Listing date targeted 29 May 2pm.

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Analysis of the IPO
Details are still tentative and dependent on the decided indicative price as the book building process is still underway so here are snippets of what I have read/heard/seen and my initial thoughts. More to follow when the figures are finally decided.

1. High yield of 7-8% for 2013 and 2014
1. [The good] This yield, similar to Croesus Retail Trust's yield range, is going to appeal to yield hunters. The performance of the Croesus Retail Trust IPO serves to remind many of us, purported contrarians, that the yield-hunt is yet to be over and there is still much more yield compression that we will see. The next high-yield equity IPO that listed before Croesus Retail Trust, Mapletree Greater China Commercial REIT, listed in March this year has already appreciated by 20% from its listing price and 8% from its first day close. More statistics here.
2. [The good] A clear distribution policy where the trust will distribute 100% of its distributable free cash flows on a semi-annual basis.
3. [The bad] that seems slightly more risky than initially thought (as with the Singaporean mentality, we favour questioning items that seem too good to be true; being critical is a trait though)
2. High cornerstone and institutional take-up S$451 million of the IPO, almost 32%.
1. [The good] There will be adequate price level support for the listing period
1. <1% of total units (25 million units) offered in the Public Offer. 
2. 66% placement tranche
3. ~32% of total units will be held by cornerstone investors
2. [The bad] If you had complained about your Croesus Retail Trust IPO balloting results, this public offer would have an even smaller chance of a successful ballot.
3. Business trust concept
1. [The good] Business trusts on the SGX tend to operate with a slightly higher forward-looking yield so it can be said that there is still further upside to their prices in this chase for yields. 
2. [The bad] Truth is, business trusts listed in Singapore tend to be less favoured by investors as compared to REITs basically of their operating structure. In short, business trusts are more complicated in their value proposition. REITs also pay less taxes on their income in Singapore.
3. [The good] Asian Pay Television Trust yield of ~7-8% (based on S$1 offer price) puts it as the 2nd highest forward-looking yield business trust on the SGX, where the next closest is Croesus Retail Trust (6.5% at S$1.145), K-Green trust and Hutchinson Port Holdings. It is only surpassed by Religare Health Trust of 8.4%.
4. Taiwan infrastructure play that is also the only one listed on the SGX
1. [The good] Ideal for retail investors seeking exposure to Taiwan and cable television market. The cable television market in Taiwan is the 5th largest in Asia by revenue.
2. [The good] It has good comparative advantage in the pay-TV business as it is one of the 3 largest operators in Taiwan. 

Market Outlook
Just a quick highlight, Croesus Retail Trust closed with a first day gain of 23% above offer price. This just served to highlight the tremendous liquidity that the Singapore financial market has been enjoying and that high-yielding equity are still hot in demand despite the yields reflecting their relative risk. Contrary to some belief that the yield-chase is over in 2013 and beyond, the economic story has yet to brighten and we can see that yield compression is still taking place actively in the markets of today.
More IPO statistics here.


Conclusion of the IPO
In essence, I am sensing a repeat of the stellar performance of the Croesus Retail Trust IPO. Maybe slightly more muted given that Croesus Retail Trust has already satisfied some demand but definitely not too far off. In fact, there are huge similarities to be drawn between these IPOs of 2 business trusts. They are similarly operated overseas, so Singapore will not be able to see their assets being put to work first hand. Like Croesus Retail Trust, which had a poor gearing ratio above many other concerns, this trust is not without them. But as it seems, the market is intent on ignoring these risks in search of high-yielding equities. This trust has a huge offering, surpassing the Mapletree Greater China Commercial Trust of S$1.3 billion, which will be a truer test of the capital market in Singapore and the clamor for yield even in 2013. For now, let's wait for the price to be finalised before making a decision based on the institutional demand.

All quoted figures in Point 3 are derived from the OCBC Investment Research S-REITs Tracker Compilation dated 13 April 2013. As it is an uncirculated copy, I did not upload it; I am sure you can get it from your broker or more updated data from Bloomberg terminals.

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Upcoming IPOs - Croesus Retail Trust & Asian Pay Television Trust

2 new trusts look set to be listed in Singapore in the coming weeks - Croesus Retail Trust and Asian Pay Television Trust. These IPOs come on the back of a very successful Mapletree Greater China Commercial Trust that was listed on 7 March on the SGX Mainboard. They will become the 3rd and 4th Mainboard new members for 2013. Asian Pay Television will become the 2nd largest IPO of the year following MGCCT and is seeking to raise S$1.4billion in this huge equity offering.

Here's a fast and quick breakdown to what you need to know to catch onto the IPO bandwagon in the coming weeks.

1. Croesus Retail Trust
• S$372 million capital to be raised
• 200 million to 250 million share units to be offered
• Indicative price of S$0.93/unit
• 8% yield in first year ending June 2013, 8.1% in subsequent
• 4 x Japanese retail malls in portfolio
• 11 cornerstone investors to subscribe to 164 million units (at least 65% of offered equity)
• Backed by Marubeni and Daiwa House Industry
• Expected public offer 3 May
2. Asian Pay Television Trust
• S$1.4 billion capital to be raised
• 8.25 - 9% yield for 2014
• It is an investment vehicle for Taiwan Broadband Communication, a pay-TV operator
• 8 cornerstone investors secured
• Expected public offer by end May

On the sidelines, it is also definitely an exciting period to come with the rumour that OUE is planning to spin-off its hospitality assets in Singapore for US$800million. That's a total of 3 pretty decent-sized listing up for grabs on the Singapore capital markets in a short period of time. Definitely looking forward to this period with excitement!

Anyway for newcomers to this IPO scene in Singapore, I suggest you take a look at the how this IPO application process works here. It is a short write-up that I compiled to ease the IPO process and clarify doubts. 

Even if you are a seasoned-pro, there is another page on "SG IPO Statistics" that you may want to check out. It details 2012 to 2013 IPOs and their performance on first day launch as well as up to date. 

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Mapletree Greater China Commercial Trust IPO Ballot Results

Previous post: [Largest IPO in 2 Years Goes Live on 7 March - Mapletree Greater China Commercial Trust]

Balloting Results of the Mapletree Greater China Commerical Trust (MGCCT) IPO are out as of 6 March 2013 and can summarised as follow

• 2,662 billion shares underwritten for listing
• 776.6 million shares for public and placement tranche
• 511.3 million shares for placement tranche
• 215 + 50(reserved units that will be released) million shares for public tranche
• 29.5x oversubcribed in total
• 38.1x subscribed for placement tranche shares
• 8.9x over subscribed for the public tranche shares
• Shares at S$0.93 each
• Expected 5.6% yield for the year ending March 2014; Expected 6.1% yield for the year ending March 2015.

Shares will commence trading on a "ready" basis at 2pm on Thursday, 7 March 2013. Total of 2.66 billion shares listing tomorrow. Official SGX announcement here.

Official announcement document of the MGCCT IPO is available on the company website here.

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Tomorrow is listing day for this mammoth trust that has really ignited the IPO demand in the SGX. The biggest question that we wish to know is how will it fair?

Current REIT market conditions
REITs are clearly the outright winning category of 2012 as investors flocked to yield havens, resulting in a yield compression that we see today. Even so, REITs have still enjoyed considerable upside to the start of 2013. Mapletree brand name REITs have also done well in the current market conditions, surging even further in the last 2 days upon the announcement of listing of this REIT.

• Mapletree Commercial (listed 2011) - $1.445 15 Feb closing price compared to IPO offer of $0.88
• Mapletree Industrial (listed 2010) - $1.390 15 Feb closing price compared to IPO offer of $0.93
• Mapletree Logistics (listed 2005) - $1.240 15 Feb closing price compared to IPO offer of $0.68

Healthytrading Commentary on MGCCT IPO dated 27 Feb 2013
Blog post here - "Largest IPO in 2 Years Goes Live on 7 March - Mapletree Greater China Commercial Trust"

Year 2012 IPO Demand Statistics
To have a feel of the local demand for IPOs, do check out my compiled "IPO SG Statistics" page for a good detailed but yet bite-sized organisation of the statistics.

Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive latest market news that will move your money. 

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Largest IPO in 2 Years Goes Live on 7 March - Mapletree Greater China Commercial Trust

Previous post: [Gloomy Days Ahead for Gold and SPDR Gold Shares]

Largest IPO in 2 Years Goes Live on 7 March

And so, just a quick update about the Mapletree Greater China Commercial Trust that has reignited the attention onto the SG IPO scene.

• S$1.68 billion to be raised in largest REIT IPO
• Last year SGX raised a total of S$4.5 billion which was somewhat a dampener compared to the $9.4 billion raised in 2011. 
• Offer is confirmed to be S$0.93/share
• Highest price of the previously indicated indicative price range of S$0.88 to S$0.93
• Retail offer shares ballot application start on Feb 28
• (for green investors/IPO-applicants, do check out the "Guide to IPO Investing" on this blog regarding the SG IPO application procedures)
• (do also check out "SG IPO Statistics" on this blog for a statistical breakdown of IPOs since 2012)
• Listing date March 7
• Cornerstone investors
• Temasek Holdings
• Morgan Stanley
• Norges Bank Investment Management
• AIA Group subsidiaries
• CBRE Group
• Henderson Global Investors

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Quick Conclusion

As mentioned before, the upper pricing of this IPO is vastly within expectations given the wide search for yield even in this period. With such a brand name and big boys backing this IPO, it is also not surprising that the institutional demand ensured that the IPO be priced at the higher end of the spectrum. 

What this means for us investors is 

• the general assurance of a good fundamentally strong stock. take general with a pinch of salt after what ratings agencies did to our financial system leading to the sub-prime meltdown.
• while knowing that we, as retail investors, are getting it at a much higher premium than did the first cornerstone investors and even the institutions at the placement tranche

All in all, it should impress that if you are fine with the extra premium through the IPO, then this IPO has few fundamental reasons to be avoided. If not, you may want to observe its market equilibrium first before deciding to buy in. My feel is that it is not too late.

I am also skeptically wondering why the IPO is still going ahead at such a suddenly volatile period for the markets. Just my thoughts.

Anyway, I have previously written a more elaborate analysis of the MCGCT IPO that you can find here. Do read it before you make your decision!

Happy and healthy trading people.

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Largest IPO in 2 Years - Mapletree Greater China Commercial Trust

First of many IPOs this year we hope. After a couple of months without a large IPO, the IPO market in Singapore looks set to heat up again with the proposed listing of Mapletree Investment's Mapletree Greater China Commercial Trust. In fact, it is the largest IPO in 2 years.


Summary of offering

• IPO to raise up to S$1.68 billion to purchase 2 China-based commercial property assets from Mapletree Investments
• The biggest IPO of 2013 and the biggest trust IPO since Hutchinson Port Holdings Trust that raised US$5.5 billion in 2011
• Assets are Greater China-based
• Beijing Gateway Plaza
• Hong Kong Festival Walk
• Strong brand name in Singapore with experience in office, logistics, industrial, residential and retail properties
• 45 assets in Singapore
• 20 assets in China
• 9 assets in Hong Kong
• 32 assets in Japan, India, South Korea, Malaysia and Vietnam
• 23 commercial-linked properties
• Figures and numerics
• raising up to S$1.68 billion 
• indicative price range of S$0.88-S$0.93
• Use of proceeds
• No exact break-down so far but cash raised will be used to buy the 2 properties from Mapletree Investments.
• Dividend policy
• Semi-annual
• 5.6-6% for the first year
• 6.1-6.5% for the second year
• 100% of distributable income until March 2015. At least 90% of disctributable income thereafter.
• Cornerstone shareholders
• Temasek Holdings - 851.7-931.6 million shares
• 953.5 million shares to be shared among
• Morgan Stanley
• Norges Bank Investment Management
• AIA Group
• CBRE Group
• Henderson Global Investors
• 776.6 million shares for institutional and retail investors
• Timeline for offering
• 18 Feb - Offer to institutional buyers
• 28 Feb - Offer to public
• 7 Mar - list on SGX

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Commentary

Brand name
Mapletree is pretty much a big brand name in Singapore akin to Ascendas, both of which are government-linked. It is noteworthy to realise that Mapletree Investments manages a portfolio valued at S$19.9 billion. They have ample management experience in office, logistics, industrial, residential and retail.

China + Commercial Experience
The current IPO is a divestment of 2 China-based commercial assets into a REIT. China is not a new destination for Mapletree as they already easily manage 20 assets in China such as the Mapletree AIP in Guangzhou under Mapletree Logistics Trust. Out of these assets, 6 are commercial-related properties - Beijing Gateway Plaza, Hong Kong Festival Walk, Shanghai Silver Court, Nanhai South Station Enterprise City, Minhang Development Project and Nanhai Business City. The rest are mostly logistics and industrial with some residential properties. Having said that, Mapletree also has considerable commercial property experience outside of China with 7 other assets spread over Japan, Vietnam, Malaysia.

Quality of assets
Both are Grade-A offices in the heart of China and Hong Kong with size more than 100,000 sqm. They also consist of some retail space located at the base of the assets. Festival Walk was purchased by Mapletree Investments in 2011 for $2.4 billion.

Current REIT market conditions
REITs are clearly the outright winning category of 2012 as investors flocked to yield havens, resulting in a yield compression that we see today. Even so, REITs have still enjoyed considerable upside to the start of 2013. Mapletree brand name REITs have also done well in the current market conditions, surging even further in the last 2 days upon the announcement of listing of this REIT.

• Mapletree Commercial (listed 2011) - $1.445 15 Feb closing price compared to IPO offer of $0.88
• Mapletree Industrial (listed 2010) - $1.390 15 Feb closing price compared to IPO offer of $0.93
• Mapletree Logistics (listed 2005) - $1.240 15 Feb closing price compared to IPO offer of $0.68

And, for a tabulation of all SG-listed IPOs' performance since 2012, do visit "SG IPO Statistics" on this HealthyTrading blog. It presents an easy snapshot of all the IPOs at a glance for your analysis and comparisons.

For those of you gunning for this Mapletree Greater China Commercial Trust IPOs, check out my blog page on "Guide to IPO Investing" to help you navigate around especially if you are a new investor or new to the IPO bidding system of SGX. Do not waste time; time is ticking away to those offer deadlines!

Also, do bookmark this page // add Healthytrading blog to Twitter // subscribe to RSS feed // subscribe to email feeds to receive the LATEST IPO/market news that will move your money. Links are available all on the right of the page (at the navigation bar).

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