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nareshg

My sincere thanks for opening my eyes to deteriorating finances of First REIT. ⏰

layers

Reply to @nareshg : yea gd thing and first reit is it collect rent. so unless lippo ji ba boom. first reit shld be fine

the first lease expiry will show visiblilty of the rest

Hanzo

I only know this counter feels weird

Hanzo

Reply to @layers : Time will tell.. now i anyhow haha

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layers

I looked at Siloam Hospitals. The rental expenses is almost the whole of the General & Administration Expenses.

The info from morningstar tells a very grim picture. The hospital is surviving by financing via issuing shares it seem. Look a the jump of outstanding shares. This is not good, not good at all. @Sporeshare

l0nEr

another point on rights issue..
I cannot say for certain if they will do rights issue to buy assets. But logically, think about it....a rights issue has to be at least dividend yield accretive or the shareholders will not bite.
The assets that OUE Lippo Healthcare owns are Japanese assets, which means their cap rate will be tiny in low single digits (possible 2-3%). If First REIT has issue shares to buy these assets, can they even possibly create a situation where it is dividend accretive???
This is why you see reits with low dividend yield issuing shares and buying new assets (Mapletrees/Capitalands), while the higher yielding stuff are stuck. This is why ESR REIT is trying to be a mega cap reit because thats the only way they can become bigger. i think investmentmoats have highlighted the point about investing in low dividend yield stocks before.
OUECT is a different thing because they own enough stake to see it through. FirstREIT is <30% Owned by the Lippo Groups

nareshg

Reply to @l0nEr : You have a point. I will always keep in mind these wise words before buying another REIT shares

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l0nEr

just fyi...
LIppo Karawaci Healthcare is listed, under Siloam Hospitals. Under Note 30, Operating Expenses, there is a Rental expense. Thats probably the one you can use.
i think like what you highlighted in your chart, notice the lease expiry profile in the next 3-5 years is 22% of rental and these tend to be earliest, best assets (see the location, except for Sarang). This seems quite different from your statement: "Assuming Lippo wants to stop paying in SGD, affected income will be affected by 44% base on GFA in the next 3 years." Furthemore, if these were the earliest signed, the revenue/EBITDA contribution should be lesser than 22%, since the later ones would be signed at a higher rate.
You have also clearly highlighted the depreciation of IDR, which is accurate. But please do take into account of the Indonesia inflation, which has gone up by 35% since 2010. Assume that your rental yields reprices based on the inflation rate, then that should compensate for IDR depreciation. FYI too, you can see Lippo Mall REIT rental reversion, they tend to be 20+%.

Hence, pls if you consider the maths again.: 1) only 22% is affected before 2025, not 44%; 2) your IDR repricing will be compensated by inflation increase. If you recompute, what would the actual impact be on dividends?
in reality, what is being affected is risk premium...

Indonesia inflation: https://tradingeconomics.com/indonesia/con...

cmlee1

Reply to @layers : Unfortunately no.. working..

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evelow

high rish hogh return...not sure if my heart can take...;p

layers

Reply to @evelow : haha. yea. but safe for the next 33mnths. mean time monitor the situation

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TheBabylonians

great share! Rupiah is stabilising too as deficit decreases

Spinning_Top

Thanks for sharing

Snowblaze

Oh uh .. This sounds like there will be a negative impact to first reit? Is it?

layers

Reply to @cmlee1 : haha I just showing a worst case. a worst case assumption in 3yrs. i cant think of anything worst than that. the yield is still ok if it happen to the first expiry.

of cos share price is another issue. most imply. lippo healthcare cannot lose $. look at the CAGR for net profit. lost $ they need to do something liao. either pass cost to customers or the rental.

lippo I paying in IDR. so there is no the risk of escalating due to rupiah weakening increasing cost.

well I just vested lol.

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Hanzo

Delist! Delist! Hahahahaha joking

layers

Reply to @Hanzo : bo lui how to delist

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