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