Initiated position in Capitaland China Trust (SGC:AU8U)

 

Ascendas Xinsu, Suzhou, China

I nibbled some Capitaland China Trust (CLCT) shares at $1.35 today.

The last time I traded CLCT (it was named CRCT then) was in 2017, selling it off at $1.65 when it was slightly overvalued for the risks.

This time, it will be a long-term investment because CLCT is no longer a pure retail play in China and has added business parks containing industrial properties, logistics warehouses and. data centers to its portfolio in 2020. Investing in CLCT is one way to ride on the growth of China's consumer spending and industrial activities through SGX. Due to the impact of this health pandemic posed to the China retail industry, this could be an opportunity to get on the digital economy wave before it normalised back to reflect the growth potential of its assets. 

I believe that CLCT is still undervalued given its book value at $1.56. Yield is also decent, estimated to be around 4.5% p.a. and is geared to increase over time as contributions from its newly acquired business parks kick in.

I am not too concerned about the volatility of its share price in the short term. With its impending 1H 2021 results on the cards, a 3 to 4 cents dividends is going to be announced soon. Even if its share price tanked, I will consider adding more shares to slowly accumulate this Reit because there are simply not many quality Reits that offer value in SGX now.

Thanks for reading. Stay safe and remain strong always.

With Love & Peace,

Qiongster

Free Apple Share, Free NIO share, Free Twitter shares, Free Blackberry shares, Free Money from a low cost, secure and robust trading platform!

I have shared in previous posts on my journey of building a new growth portfolio in US stocks using this new online brokerage platform, Moo Moo.

Let me explain the reasons why we should grab hold of this great opportunity to start investing or trading in US, HK and SG stocks using this new platform.

After signing up for a Moo Moo account (Sign Up via this Referral Link or clicking on the image above), funding the account with at least SGD 2,700, USD 2,000 or HKD 16,000 within 30 days of account opening, downloading the Moo Moo trading app from Apple App or Google Play store and completing the simple onboarding tutorial activities, one Apple Inc. (AAPL) share will be credited to your account.

To receive the free share of NIO which will be given out starting 30 Jun 2021, 8pm SGT, you just need to complete 5 successful trades or unlock the Level 1 Trading Badge within 30 days from account opening.

The linkage via DBS/POSB bank account is seamless and after getting the free AAPL share and NIO share, we could even withdraw our monies back into our bank account.

In the Moomoo app, there are simple activities in the Task Center for us to complete to earn points and free shares of General Electric (GE), Nokia (NOK) and Blackberry (BB). Currently, there is a quiz event, which tests our knowledge of investment and understanding of Moomoo trading platform, allowing us to win cash daily till 10 Aug 2021.

Furthermore, you will enjoy 180 days of unlimited commission-free trades, free Level 2 Market Data for US stocks and free Level 1 Real-Time Market Data.

You could also make referrals and enjoy up to 20 Twitter (TWTR) shares and additional 600 days of unlimited commission-free trades (1 Twitter share and 30 days of commission-free trade for each person)

In addition, for successful positions/shares transfer-in to the trading account, you will be entitled to a $50 cash coupon for the first transfer-in only.

The promotion is until 2 Aug 2021, 8pm SGT as of time of writing, so act fast whilst it lasts.

Safe, Trusted and Secure

The Moo Moo trading platform is powered by Futu Singapore Pte Ltd. which is a subsidiary of Futu Holdings Limited, a leading Financial Techology company listed on the NASDAQ (NASDAG: FUTU) and backed by Tencent Holdings (SEHK: 700), venture capitalist firm Sequoia Capital and Matrix Partners.

Futu Singapore Pte Ltd. is licensed and regulated by the Monetary Authority of Singapore (MAS) License (No. CMS101000). US securities in the account are protected by up to USD 500k and cash in the account by up to USD 250k by Securities Investor Protection Corporation (www.sipc.org). Its local office is located 160 Robinson Road, #25-07, SBF Centre, Singapore 068914.

Very Low Cost

The Moo Moo trading platform charges very low commission and platform fees as follows:

Commission Fees (subjected to 7%  GST)

US Stocks, ETFs & ADRs: USD 0.0049 / share, min USD 0.99 / Order

HK Stocks & ETFs: 0.03% of investment amount or HK$3, whichever is higher 

Singapore Stocks, ETFS & Reits: 0.03% of transaction amount, min. SGD 0.99

Platform Fees (subjected to 7% GST)

US Stocks, ETFs & ADRs: USD 0.005 / share, min USD 1 / Order

HK Stocks & ETFs: HK$15 per order

Singapore Stocks, ETFS & Reits: 0.03% of transaction amount, min. SGD 1.50

Do note that other regulatory fees i.e settlement fee, SEC fee (sell only), ADR custodian fee are waived during the promotional period and may be applicable in future. For futures and options, the fees charged are also higher than the above and listed on https://support.futusg.com/en-us/topic143

Good Headstart

With free shares to lay the foundation of building an investment portfolio, low trading costs to maximise gains and minimise losses, the Moo Moo platform also offers an intuitive and robust investment platform, rich in trading analytic tools, access to global financial news and investment community. All these factors sum up to provide a very good head start to new investors and even veteran investors or traders who are continually improving and honing their games.

User Friendly and Good Customer Service

Moo Moo offers robust, fast and user friendly platforms for trading on all mobile devices and computers. I have tried out the platforms and was impressed at the rich features, quality of interface and speed of executing tasks.

The customer service is responsive and besides using conventional emails to reach them, there is AI chatbot which we can ask all sorts of questions pertaining to the trading platform and even reach out to real customer service agent. I have engaged the customer service and managed to get my queries and doubts answered promptly.

I believe that I have found the right platform to give myself a headstart into US stocks. This new brokerage still has plenty of room for improvement. For eg. access to UK, Europe and other asian markets, robo investment features, FX trading and so on. However, I would recommend beginners and those who have not traded foreign stocks before to just grab the free Apple stock, and learn to trade using paper account or small amount of real money to gain real experience. It all begin with the very first step.

Thanks for reading. Stay safe and remain strong as always.

With love & peace, 

Qiongster

Disclaimer: This is not a sponsored post but a post for me to share about my experience and reason behind signing up and using this new low cost trading platform. Investment comes with risks and please dyodd. 

My Small Contribution Towards Normalcy

Today, I had my first dose of Pfizer Comirnaty vaccine at the nearby community centre.

The entire process was smooth and took less than 1 hour - 15 mins of waiting for the 5 second jab and 30 mins of waiting after jab for any symptoms before being allowed to leave.

Waiting outside the community centre before entering the vaccination hall. 

Sitting down to wait for 30 mins after getting jabbed before name is called and proceeding to discharge station and then leave. 

Getting vaccinated is a small step towards normalcy because it is evident that this virus will not go away after mankind has battle against it for more than 1.5 years already.

To carry on with our lives and possibly revert to doing activities we enjoy during pre-Covid days, getting vaccinated seems to be the only way out besides getting the virus and surviving it.

The governments over the world seem to have started differentiating people who are vaccinated with those who are not, dishing in perks to allow vaccinated people to enjoy events such as as attending concerts, weddings, religious ceremonies and even leisure travel. 

With so much resources spent on battling this virus all over the world, it is possible that this virus will eventually be treated as an endemic and we humans, be allowed to carry on with our lives as usual. The survival of the fittest game is played such that natural selection allows the strongest, fittest and people able to adapt to live on, while eradicating the weakest and those who could not adapt.

I was skeptical and refused to get vaccinated initially due to the numerous reported side effects, but decided to give in due to the lure of freedom - the opportunity for travel to other countries in future, getting to live life normally by attending crowded events such as concerts, sports, parties again. Most importantly, getting vaccinated in Singapore is free and borne by the government. I enjoy free things personally and could not resist getting a vaccine which could give me back my freedom to 'Live Rich Life Free' again! 

I hereby encourage those of you who have not gotten vaccinated, to quickly arrange for a shot as soon as possible.

Thanks for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster

Net Worth Update July 2021 - All Time High!

My net worth grows $25k from mid Jun 2021 to hit S$1.125m, an all time high!

I have completed $14k of CPF cash top-ups - $7k to my own CPF SA account, $7k to my mum CPF RA account.

I have also entirely paid off my income tax liabilities of $1.1k in cash.

Having already contributed $4.5k to SRS account and still have another $10.8k to go. Most probably, will top up in end of the year.

A new slice of HDB Equity is created to reflect the down-payment made for my HDB BTO property using CPF OA savings.

In the next few months, I intend to make voluntary housing refunds using cash back to my CPF OA.

The stock markets have been resurgent and my purchase targets have all hit all time highs, with little signs of correction. My faith and patience in local industrial and retails Reits have also paid off, contributing to paper capital gains on top of juicy dividends. I do not see much value buys in the market and will scale back on the speed of my investments. I do hope to see some equity fund raising for some of the local Reits I own, offering opportunities to add shares. While waiting for a decent correction in the US stock market for buying opportunities, I will be selling put options to collect premiums on companies that I want to own i.e. Intel, AMD, Palantir.

Besides focusing on financial health, I have been exercising more regularly in recent weeks and will be going for a vaccination shot next week, after which I will put my workout regime on hold till perhaps after the second shot in early Aug.

$1.125m

Thanks for reading. As always, stay safe and remain strong.

"It is not the man who has too little, but the man who craves more, that is poor" 

                                                                                                            -Seneca

With love & peace, 

Qiongster

Embracing Minimalism - Donated Old Clothes

I have been embracing minimalism for years but have done little to declutter the many old clothes that I have hogged over the past decades.

As I bought some more new clothes over the past weekend, I decided to free up some space from my wardrobe to host my new clothes.

I easily identified old formal wear, long-sleeved shirts and dusty pants that I wore for the past decade ago to my first internship, previous job, interviews and even 2 decades old shirts that I wore during secondary school around 20 years ago. All these have to go, though some are still in wearable conditions.

Due to this health pandemic and the prevalent WFH default and possibly in the foreseeable future, decking in formal wear will no longer be the norm. Rather, being semi-naked (for guys), t-shirts and casual wear at home or sometimes in office will be the new corporate fashion trend.

I believe it is time to let go of these clothes that are old and not needed anymore. Be More With Less. 

There you go. 15 kg of clothes for Salvation Army.

Thanks for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster

Started paying back my own CPF OA in Voluntary Housing Refund and Completed RSTU for mum's CPF RA

I just topped up $1.5k into my mum's CPF Retirement Account to complete the $7k CPF Cash Top-up Tax Relief this year under the Retirement Sum Top-Up (RSTU) scheme.

I have already topped up $5.5k earlier and have explained why I did so. See related post:

Why I Top Up My Mum's CPF Retirement Account instead of giving Cash?

I have also started to make voluntary refund of $3k+ into my CPF OA account. This is a loose amount I chose from my savings account for repaying the "loan" from my own CPF OA. I have blogged about booking and paying down-payment for a HDB BTO property earlier this year. See related posts:

HDB BTO Flat Downpayment

Booked my first property in District 13 (City Fringe) beside an MRT!

I decided to refund cash into CPF OA account because I do not like the idea of accrued interest incurred on withdrawn savings from my CPF OA, and compounding at 2.5% p.a rate. This accrued interest will erode into the potential profits from selling my HDB BTO after MOP in future. Even though I could potentially generate investment returns of higher than 2.5% from my cash, I could not resist the temptation of getting risk-free 2.5% returns from the government on my CPF OA savings.

Moreover, my CPF OA actually crossed the $200k milestone in June 2021 before I used it to make down-payment for my HDB BTO flat.  I hope to jack back the numbers to above the psychological feel-good milestone $200k again.

In a nutshell, I decided to go against the common path that herd take - taking on hefty housing loans and paying monthly mortgage repayments, using CPF OA savings heavily to tank housing mortgage etc. In contrast, I will pay up full for my HDB BTO flat using my CPF OA savings and refund back the amount used into my CPF OA whenever I have disposable cash.

I prefer to borrow money from myself and pay back myself whenever and however I feel like it, at highest levels of flexibility and freedom.

With all these outgoing cash flows, my plan to build up war chest for next round of investments will be stifled. For the long-run, I believe all these actions are necessary for me to reap the low hanging fruits before moving on to seizing bigger 'mao shan wang' durians.  

Thanks for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster

Wrote Off $1k from Net Worth on the Most Hated Expenditure Of The Year

The Only 2 Certainties in Life are Death and Taxes.

We as humans could not avoid both Death and Taxes.

I logged in to IRAS portal and decided to write off whatever amount it shows, from my net worth today.

$1.1k is not a very large amount but it still pains a little when contributing to nation building of Singapore. However, considering that this amount could have been much bigger if not for my SRS contributions, CPF cash top-ups and charity donations, I would usually pay off in one lump sum instead of opting for interest-free instalments from GIRO deductions.

Before the pandemic, I would use miles credit card to pay off income taxes, incurring a small admin fee, in order to earn miles. However, as earning miles do not give any short-term benefit due to heavy restrictions on leisure travelling, I decided to use cash to pay off my income taxes.

There it goes, my small part contribution towards nation building.

Thanks for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster

Why The Largest REIT Holding in My Portfolio has Exploded yet still Undervalued!

The share price of Aims Apac Reit (SGX:O5RU) has climbed slowly and steadily over the past one year and has increased more than 26% to hit $1.54 as of 2 July 2021.

AA Reit is my largest holding and constitutes close to 18% of my SGX Income Portfolio, heavier than the likes of Ascendas Reit (SGX:A17U) and Mapletree Industrial Trust (SGX:ME8U).

I am happy and proud to own this Reit despite its relatively smaller market capitalisation and have blogged about it many times. See previous posts:

1. Added Aims Apac Reit

2. Aims Apac Reit in Quest of Recovery

3. Tried to add Aims Apac Reit but failed

4. #10 in 10 Best Reits in Singapore

Industrial properties owned by Aims Apac Reit with potential organic growth due to untapped GFA of 502,707 sqft

AA Reit owns and invests in a diversified portfolio of 28 income-producing industrial, logistics and business park real estate, of which 26 are located in Singapore and 2 in Australia - Boardriders APAC HQ located in Gold Coast, Queensland and a 49% interest in Optus Centre, a business park in Macquarie Park, New South Wales.

Let me provide 10 reasons why I have strong conviction for this investment.

1. Stability

The share price of AA Reit is less volatile than 75% of SG stocks over the past 6 months, typically moving +- 3% a week. It is relatively less volatile (3%) over the past year. Excluding the one-off plunge in Mar 2020 due to the health pandemic, its share price is range bound between $1.20 and $1.50 for the past many years.

2. Market Performance

Despite its reduced volatility and popularity compared to the likes of Ascendas Reit and Mapletree Industrial Trust, this small and quiet animal has managed to provide more than 26% returns over the past year, exceeding the average 2.4% returns by all the SG Reits and the average 17% returns by the Straits Times Index.

3. Dividend Yield

Based in its past annual dividend of $0.85, even at the yearly all-time high share price of $1.54, the yield is 5.5% which is very attractive in the current low interest rate climate. This yield is relatively higher than other SG Reits and stocks that pay dividends. However, we have to note that high returns come at high risks. The DPU of AA Reit has been declining over the past 10 years from the highs of annual DPU of $0.10 and profit margins have not been growing. Its return on Equity is 4.8% which is relatively low.

4. Payout Ratio

The current payout ratio of AA Reit is at around 78%, which is well covered by its net property income. Its future dividends in 3 years are also projected to be well covered by its net property income.

5. Strong Management

The tenure of its current management team is 5.8 years, with its CEO, Koh Wee Lih helming the Reit for 7.5 years already. I have attended the AGM of AA Reit a few times in the past and was convinced by the clear plans and objectives projected by this management. They have been always been putting the interests of shareholders ahead with yield accretive acquisitions funded by debt and there were very few equity fund raisings (2 in past 10 years) for acquisitions.

6. Long Weighted Average Lease Expiry

AA Reit has a healthy portfolio WALE of 3.95 years, which is relatively longer than 3.3 years WALE by its peers in the mid-cap industrial Reit segment. AA Reit has embarked on its first greenfield build-to-suit project at 51 Marsiling Road for Beyonics and they have continue to lookfor build-to-suit opportunities with solid tenant credit and longer WALE profiles, and asset-enhancement initiatives for organic growth.

The recent $129.6m acquisition of a ramp-up logistics warehouse at 7 Bulim Street, located within the Jurong Innovation District, is near to the future Tuas Mega Port and is fully leased at master tenancy to a major Japanese freight forwarding and logistics company KWE-Kintetsu World Express for 10 years, with option to renew for 5 years. This is strong testament by the manager to AA Reit to enhance stability of DPU to shareholders through achieving longer WALE of its properties.

7. Growth Potential Unlocked - Data Centres!

Even with limited growth and absence of huge potential in the past, AA Reit has been well managed and stronger compared to other midget Industrial Reits such as ARA LOGOS, ESR, Sabana. According to DBS Research, with 502,707 sqft of untapped Gross Floor Area, AA Reit is like a "goldmine" of valuable land bank to extract value. There is a potential to convert several assets into data centres once the moratorium is lifted, which they believe will be value-enhancing for the Reit. When this happens, their WALE of the properties will be even longer and it will be traded at price/book values, closer to the likes of Keppel DC Reit, which will be closer to $2!

8. Potential Acquisition Target

AA Reit has always been a potential acquisition target for takeover by ESR Cayman and possibly other giants like Mapletree for reasons due to its fragmented shareholding structure and access to untapped gross floor area. Though this could be good news but I hope it does not happen as shareholders of AA Reit, including myself would then lose a stable and reliable source of passive income. Otherwise, shareholders would encounter an en-bloc decision, which is a rich man problem.

9. Demand for Logistics and Warehouses

This health pandemic has driven up the demand for stockpiling of goods supplies and inventory by many companies, causing increase in demand for logistics and warehousing space. This helped AA Reit to achieve positive rental reversions from a few recently renewed leases. AA Reit has 24% of leases expiring in FY22 and this demand will bode good for them.

10. Undervalued

At a book value of $1.36, AA Reit is merely traded at 1.13 times book value even at its one-year high of $1.54. Ascendas Reit and Mapletree Industrial Reit are trading at around 1.3 times and 1.6 times to book value respectively. If AA Reit is revaluated at 1.2 times book value, it should be traded at $1.63, which close to the target price of $1.61 quoted by DBS.

According to the valuation by Simply Wall Street based on a discount rate (cost of equity) of 6.7%, perpertual growth rate of 1.9% derived from 5-Year average of SG Long-term Govt Bond Rate. equity risk premium of 4.7% derived from S&P Global, Reits unlevered beta of 0.67, Re-levered and levered beta of 1.013, the intrinsic value for AA Reit is arrived at by discounting future cash flows to their present value using the 2 stage method - analyst's estimation of cash flows next 10 years for the 1st stage and a stable growth rate into perpetuity after that.

Second stage terminal value:

Adding up first stage of next 10 years cash flows and future infinite years terminal value, divide by outstanding number of shares to obtain the intrinsic value of AA Reit.

The intrinsic value of AA Reit is $2.64, representing 41.6% undervalued from its current share price. However, it does not guarantee that the share price of AA Reit will rise to $2.64 but does indicate the potential headroom of AA Reit's share price. By the way, Keppel DC Reit is trading at more than 2x book value, which is at $1.20 only, lower than the book value of AA Reit! The largest DC Reit in the world, Equinix is trading at more than 6x book value with yields compressed to lower than 2%! The sky is the limit because data centre assets are a niche property class with ultra long WALE and stability compared to hotels, retail or commercial properties.

I hope that the data centre potential of AA Reit materialise in the short future and there will be more yield accretive acquisitions using cheap debt and equity fund raising which give shareholders opportunities to ride on the growth of AA Reit. Let the true value of AA Reit be unlocked like "crouching tiger hidden dragon"!

Thanks for reading. As always, stay safe and remain strong.

With love & peace, 

Qiongster