The Weekly Nibble: A Focus on Singapore Blue-Chip Shares
- Original Post from The Motley Fool Sg

Here are some of the most popular articles that have appeared on The Motley Fool Singapore’s website for the week.


3 Singapore Blue-Chip Shares That Warren Buffett Might Like


Ever wanted to invest in stable companies that are part of the Straits Times Index (SGX: ^STI)? Look no further. In this article, I look at three blue-chips that have wide economic moats and why they could make good investments.


Companies discussed in the article: Singapore Exchange Limited (SGX: S68), DBS Group Holdings Ltd (SGX: D05) and SATS Ltd (SGX: S58).


3 REITS That Have More Than 8% Yield Right Now


Lawrence Nga explores three real estate investment trusts (REITs) that have distribution yields of above 8%. They are not excessively valued in terms of their book values as well.


REITs discussed in the article are Cache Logistics Trust (SGX: K2LU), First Real Estate Investment Trust (SGX: AW9U) and EC World Real Estate Investment Trust (SGX: BWCU).


Which Blue-Chip Property Developer Is The Cheapest Now?


With the additional property cooling measures introduced in July this year, shares of property developers have generally not been doing well. For instance, UOL Group Limited’s (SGX: U14) share price has tumbled close to 20% since the cooling measures were put in place.


Jeremy Chia, in his article, investigates which of the trio of property outfits that are part of the Straits Times Index – UOL, CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – offer the best value amid the tumbling stock prices.


$STI(^STI.IN) $First Reit(AW9U.SI) $EC World Reit(BWCU.SI) $CityDev(C09.SI) $CapitaLand(C31.SI) $DBS(D05.SI) $Cache Log Trust(K2LU.SI) $SATS(S58.SI) $SGX(S68.SI) $UOL(U14.SI)

Read more

Recommended & Related Posts

1 Simple Number for Understanding 3 Important Areas of UOL Group Limited
- Original Post from The Motley Fool Sg

UOL Group Limited (SGX: U14) is a property company involved in property development and management, property investments, and hotel businesses.


Let’s examine the conglomerate using one simple metric: the return on investment, or ROE.


Why ROE?


But why should we use the ROE?


This financial metric gives investors important insight on a company’s ability to generate a profit using the shareholders’ capital it has. An ROE of 20% means a company generates S$0.20 in profit for every dollar of shareholders’ capital invested. In general, the higher the ROE, the more profitable a company is. A high ROE can also be a sign that a company has a high-quality business.


That being said, it’s worth noting that the use of high leverage – which increases the financial risk faced by a company – can also increase a company’s ROE.


Calculating the ROE


The ROE can be calculated using the following commonly used formula:


ROE = net profit / shareholder’s equity


The ROE can also be calculated using a different approach, as shown below:


ROE = asset turnover x net profit margin x leverage ratio


Doing so will reveal three important aspects about a company: How well it is managing its assets, how efficient it is at turning revenue into profit, and how much financial risk it could be taking on.Click here for more information about using this formula to calculate the ROE.


Let’s turn our attention to the ROE of UOL Group.


The acid test


Asset turnover measures a company’s efficiency in using its assets to generate revenue. It is calculated by dividing a company’s total revenue by its assets.


UOL Group had total revenue of S$2.1 billion and total assets of S$19.6 billion in its fiscal year ended 31 December 2017 (FY2017). These two figures giveus an asset turnover of 0.107.


The net profit margin measures the percentage of revenue that is left as a profit after deducting all expenses. For FY2017, UOL Group had a net profit margin of 47%, based its net profit of S$987 million and revenue of S$2.1 billion.


Lastly, we have the leverage ratio, which shows the relationship of a company’s total assets to its equity. It is calculated by dividing total assets by equity.Ahigher ratio means a company is funding its assets with more liabilities, resulting in higher risk.In FY2017, UOL Group had total assets and total equity of S$19.6 billion and S$14.1 billion, respectively. The two numbers combine to gives it a leverage ratio of 1.4.


When we put all the numbers together, we arrive at an ROE of 7% for UOL Group.


Click here nowfor yourFREEsubscription toTake StockSingapore, The Motley Fool’s free investing newsletter. Written byDavid Kuo,Take Stock Singaporetells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


TheMotley Fool’s purpose is to help the world invest, better.Like us on Facebook to keep up-to-date with our latest news and articles.


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.



$UOL(U14.SI)

Read more
2 REITs, a Company and a Dash of Money
- Original Post from The Motley Fool Sg

Tomorrow, there are two real estate investment trusts (REITs) and a company going ex-dividend. In other words, you need to own them before that day if you wish to receive their distributions (or dividend). Let’s find out more.


CapitaLand Commercial Trust (SGX: C61U)


CapitaLand Commercial Trust is the largest commercial REIT in Singapore with nine properties in Singapore, and one in Frankfurt, Germany.


The office REIT is giving out 4.42 Singapore cents per unit for the period from 1 July to 31 December 2018.


For the full year ended 31 December 2018, the REIT’s gross revenue climbed 16.7% year-on-year to S$394.0 million. The higher gross revenue was largely due to contributions from Asia Square Tower 2 and Gallileo (the German property), which were offset by the lack of revenue from the divestments of One George Street, Golden Shoe Car Park, Wilkie Edge and Twenty Anson.


As a result, NPI surged 18.5% to S$314.6 million, while distributable income increased by 11.4% to S$321.7 million, and distribution per unit (DPU) inched up by 0.5% to 8.7 cents.


Soo Kok Leng, chairman of CapitaLand Commercial Trust’s manager, said the following about the REIT’s latest performance:


“Our multi-pronged approach to consistently strengthen CCT’s assets, portfolio and balance sheet has led to a good set of results in FY 2018. As at end 2018, CCT’s deposited property value grew 4.0% year-on-year to S$11.2 billion, underscoring the Manager’s focus on creating long-term value for unitholders. During the year, we diversified CCT’s growth engines geographically with a strategic acquisition in Frankfurt, Germany. We will continue to explore investment opportunities in select gateway cities of developed markets, while strengthening CCT’s market leadership in its home base.”


CapitaLand Commercial Trust’s unit price closed at S$1.91 on Tuesday, translating to a price-to-book (PB) ratio of 1.0 and a trailing distribution yield of 4.6%.


Sabana Shari’ah Compliant REIT (SGX: M1GU)


Sabana REIT currently owns 18 industrial properties in Singapore. They span the high‐tech industrial, warehouse and logistics, chemical warehouse and logistics, and the general industrial sectors.


Sabana REIT is dishing out 0.71 Singapore cent per unit for its fourth quarter.


Gross revenue for the REIT’s 2018 full-year fell by 5% year-on-year to S$81.0 million while its net property income decreased by 1.1% to S$52.8 million. Consequently, DPU tumbled 3.9% to 3.18 Singapore cents, down from 3.31 cents in 2017.


The decline in gross revenue was mainly due to lower contribution from some of the REIT’s multi‐tenanted properties on the back of lower occupancies, negative rental reversions on certain master lease renewals, and lower rent from 21 Joo Koon Crescent, whose master lease expired in the third quarter of 2018.


Sabana REIT’s units last traded at S$0.415 apiece on Tuesday. At that price, the REIT had a PB ratio of 0.7 and a trailing distribution yield of 7.7%.


Singapore Exchange Limited (SGX: S68)


Singapore Exchange is the only stock market operator in Singapore, and it provides listing, trading, clearing, settlement, depository and data services.


Singapore Exchange is paying 7.5 Singapore cents per unit for its second quarter.


For the three months ended 31 December 2018, total revenue grew 9% year-on-year to S$224 million primarily due to higher derivatives revenue. Consequently, net profit went up by 9% to S$97 million. To know more about Singapore Exchange’s latest earnings, you can click here.


Loh Boon Chye, chief executive of the exchange, commented the following on his company’s performance:


“Over the past six months, we have delivered on what we set out to do in FY2019, including widening our product offering across asset classes, increasing our client engagement overseas and strengthening our partnerships across markets. We are on a strong growth momentum and our financial performance underscores our resilience as a multi-asset exchange.”


Singapore Exchange’s share price closed at S$7.62 on Tuesday, giving a trailing price-to-earnings ratio of 22 and a dividend yield of 3.9%.


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of CapitaLand Commercial Trust and shares of Singapore Exchange Limited. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Commercial Trust and shares in Singapore Exchange Limited.


$MoneyMax Fin(5WJ.SI) $CapitaCom Trust(C61U.SI) $Sabana Reit(M1GU.SI) $SGX(S68.SI)

Read more
Cache Logistics Trust’s Latest Result: Higher Revenue but Lower Distribution Per Unit
- Original Post from The Motley Fool Sg

Last Friday, Cache Logistics Trust (SGX: K2LU) released its 2018 fourth-quarter earnings update. Cache Logistics Trust is a real estate investment trust (REIT) that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio that are located in Singapore, Australia, and China.


Here are 10 things investors should know about Cache Logistics Trust’s latest results:



  1. Gross revenue for the reporting quarter grew 4.8% to S$31.0 million, while net property income fell by 0.6% to S$23.4 million.

  2. The REIT’s distribution per unit (DPU) was down by 5.9% year over year to 1.502 cents, mainly due to lower income for distribution and ahigher number of units in issue.

  3. Based on Cache Logistics Trust’s full-year DPU of 5.903 Singapore cents and its unit price of S$0.74 (as of writing), the REIT has a trailing distribution yield of 8.0%.

  4. As of 31 December 2018, the REIT’s gearing stood at 36.2%, which is a good distance from the regulatory ceiling of 45%.

  5. The REIT’s portfolio had a committed occupancy rate of 95% at the end of the quarter.

  6. The weighted average lease expiry (by gross rental income) was at 3.1 years as of 31 December 2018. Overall, 76.5% of Cache Logistics Trust’s leases will expire within the next five years, while the rest will expire after 2024.

  7. For this quarter, Singapore accounted for 76% of Cache Logistics Trust’s gross revenue. Australia was in second place with 23%, and China accounted for the remaining 1%.

  8. There are a total of 14 properties on which Cache Logistics Trust has the right of first refusal (ROFR) to acquire. These properties belong to the REIT’s sponsor, CWT Limited, which was acquired by the Hong Kong-listed CWT International Limited (previously HNA Holding Group) in late 2017.

  9. Cache Logistics Trust divested Jinshan Chemical Warehouse in Shanghai for RMB87.0 million.

  10. Cache Logistics Trust provided the following outlook guidance:


“The global economy remains uncertain as rising trade tensions and geopolitics continue to weigh in. Singapore’s economy grew slower at 2.2% on a year-on-year basis in 4Q2018 due to a softening manufacturing sector. JTC’s rental indices showed a continuing rental decline for single-user factory and warehouse space, although the rate of decrease has moderated. Industrial factory and warehouse rents are forecasted to change -0.5% to +0.5% in 2019. In Australia, the economy is performing well, although GDP growth is forecasted to average around 3.5% in 2018 and 2019 before slowing in 2020 due to a forecasted slower growth in resource exports.


Looking ahead, the Manager will continue to pursue opportunities for strategic acquisitions and asset enhancements to strengthen its portfolio and grow earnings over time.”


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned.



$Cache Log Trust(K2LU.SI) $Cache Log Trust(K2LU.SI)

Read more
Cache Logistics Trust’s Latest Result: Higher Revenue but Lower Distribution Per Unit
- Original Post from The Motley Fool Sg

Last Friday, Cache Logistics Trust (SGX: K2LU) released its 2018 fourth-quarter earnings update. Cache Logistics Trust is a real estate investment trust (REIT) that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio that are located in Singapore, Australia, and China.


Here are 10 things investors should know about Cache Logistics Trust’s latest results:



  1. Gross revenue for the reporting quarter grew 4.8% to S$31.0 million, while net property income fell by 0.6% to S$23.4 million.

  2. The REIT’s distribution per unit (DPU) was down by 5.9% year over year to 1.502 cents, mainly due to lower income for distribution and ahigher number of units in issue.

  3. Based on Cache Logistics Trust’s full-year DPU of 5.903 Singapore cents and its unit price of S$0.74 (as of writing), the REIT has a trailing distribution yield of 8.0%.

  4. As of 31 December 2018, the REIT’s gearing stood at 36.2%, which is a good distance from the regulatory ceiling of 45%.

  5. The REIT’s portfolio had a committed occupancy rate of 95% at the end of the quarter.

  6. The weighted average lease expiry (by gross rental income) was at 3.1 years as of 31 December 2018. Overall, 76.5% of Cache Logistics Trust’s leases will expire within the next five years, while the rest will expire after 2024.

  7. For this quarter, Singapore accounted for 76% of Cache Logistics Trust’s gross revenue. Australia was in second place with 23%, and China accounted for the remaining 1%.

  8. There are a total of 14 properties on which Cache Logistics Trust has the right of first refusal (ROFR) to acquire. These properties belong to the REIT’s sponsor, CWT Limited, which was acquired by the Hong Kong-listed CWT International Limited (previously HNA Holding Group) in late 2017.

  9. Cache Logistics Trust divested Jinshan Chemical Warehouse in Shanghai for RMB87.0 million.

  10. Cache Logistics Trust provided the following outlook guidance:


“The global economy remains uncertain as rising trade tensions and geopolitics continue to weigh in. Singapore’s economy grew slower at 2.2% on a year-on-year basis in 4Q2018 due to a softening manufacturing sector. JTC’s rental indices showed a continuing rental decline for single-user factory and warehouse space, although the rate of decrease has moderated. Industrial factory and warehouse rents are forecasted to change -0.5% to +0.5% in 2019. In Australia, the economy is performing well, although GDP growth is forecasted to average around 3.5% in 2018 and 2019 before slowing in 2020 due to a forecasted slower growth in resource exports.


Looking ahead, the Manager will continue to pursue opportunities for strategic acquisitions and asset enhancements to strengthen its portfolio and grow earnings over time.”


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.



$Cache Log Trust(K2LU.SI)

Read more
First Real Estate Investment Trust: 3 Reasons For Singapore Investors To Like It Now
- Original Post from The Motley Fool Sg

First Real Estate Investment Trust (SGX: AW9U) has a portfolio of 20 properties (16 in Indonesia, three in Singapore, and one in South Korea) that are mostly healthcare-related facilities. The REIT’s sponsors are PT Lippo Karawaci Tbk and OUE Lippo Healthcare Limited.


First REIT’s stocks are currently out of favor among investors. At its current price of S$1.00 (at the time of writing), First REIT’s shares are down by 30% from its high in the last 12 months.


Yet, despite the decline in share price, there are many reasons why the REIT might be a good investment for investors. We discussed the first two reasons in an article here. As a quick recap, those reasons were:



  1. Strong financial track record

  2. Positive result for 2018


In this article, we will continue with the final reason.


Valuation


No investment analysis is ever complete unless we consider the valuation of the REIT. Here, even REIT with solid track record and good prospects might turn out to be a “bad” investment if investors overpay for it.


The good news is that First REIT seems to be trading at an attractive valuation now. This is especially true given the decline in its share price for the past year. Let’s consider the following:



Source: Stock Facts on SGX.com


The table above shows First REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 41 REITs that are in Singapore’s stock market.


What we can see from the above is that the First REIT stock price trades at a significant discount to the market average’s distribution yield. On the other hand, its price to book ratio is comparable to the market average.


Clearly, the market is not overly optimistic about the First REIT now, rendering it a low valuation as compared to its peers.


Conclusion:


In summary, the market is rather pessimistic with First REIT for now. Yet, long term investors might find the REIT a good investment idea now due to its strong financial track record, a positive result for 2018 and low valuation.


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


More reading



The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. Motley Fool has a recommendation for First Real Estate Investment Trust.



$First Reit(AW9U.SI)

Read more

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions