Investment View

Asian Pay Television Trust (APTV) is coming to market as a high-yield play via a business trust structure, offering initial yield of 7.5% for current year and 8.5% for 2014. Given the defensive attributes of the business in a regulated industry, being the sole licensed provider of cable TV services in five closely clustered franchise areas in Taiwan, and with a growing subscriber base of over 750,000 users, we think the issue will find favour with investors in the current yield-hungry environment. Growth will be driven organically by cross-selling and bundling initiatives of its broadband and premium digital TV services. APTV intends to distribute 100% of its distributable free cash flows.

Cornerstone investors for the issue include Quantum Partners, the investment vehicle of George Soros, Prudential-linked funds, Signature Global Investors, a unit of Canada’s largest investment-fund companies, and Lion Global Investors, among others. In terms of yield, APTV stacks up well against its peers, handily beating the 6.3% yield (2013) for the business trust sector and 4% for the Singapore-based telco players. We see scope for yield compression to 7.5% (2014), suggesting a fair value of SGD 1.10, representing an upside of 13% from the IPO price. Subscribe.

Soilbuild, run by Lim Chap Huat, may list the properties as a real estate investment trust in the city-state, said the people, asking not to be identified as the plans are private.

The IPO may take place in the 2nd half of 2013 and could raise about S$500 million ($404 million), two people said.

The company, founded in 1976 as a residential developer, expanded into building offices and factories eight years ago, and now has about 6.3 million square feet of industrial space, according to its website. Lim Cheng Hwa, Soilbuild’s director of capital management, declined to comment on the potential IPO.

Just  my imagination and thot -    coming 2nd IPO is REITs play.