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Singapore economy not optimistic. I'm not too hopeful. But if it happens, I'll more than embrace it.
Qanghoo ( Date: 20-Dec-2016 18:43) Posted:
I think it' s not impossible, but chances are slime. Personally, I' m hoping that there cld be a super bull run, come 2017, since we haven' t seen one for ages n for pent-up feelings n momentum to carry STI up at least 20-25%. DYODD though.
tokitoki101 ( Date: 20-Dec-2016 18:20) Posted:
| well STI 4k is not possible at all..maybe will juggle between 2.7k -3.1 |
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Thanks, Jeremy. Dun worry about being responsible for my action...just wanted to hear your opinion . =)
After seeing their financial statements recently, I had already decided to hold. Just preparing myself for new bad news to come, should they come.
jeremyow ( Date: 20-Dec-2016 16:08) Posted:
Hi pinkowl, I do not give any advice on whether to hold or cut loss. It really depends on you yourself. I can only offer some questions I myself in such a situation will consider.
1. Is the company' s current fundamentals really in an obvious danger zone? Red flags like profit guidance, possible concerns in refinancing? Such red flags must come in the form of announcements by the company so we are absolutely sure that the likelihood of such concerns happening is high.
2. Is there possible chance for the company' s fundamentals to improve in future? Sometimes, it is so obvious that there is no more chance for a company that has bad fundamentals to improve. Issues such as the company has already sold off certain operating assets to repay an immediate loan/ liability that is due so its future earnings will certainly get depressed for quite some time until the company can pick itself up slowly again.
3. Is there another better investment option for you to consider should you sell off partially or fully your existing stake in current company? If there is another better investment option such as another solid company with solid fundamentals which its share price is currently undervalued, then one may consider doing a switch and hope to recover the loss from one investment on another better investment option.
4. How much shares to sell if one is considering to sell? Partially or fully? If one after doing one' s due diligence to his best already has totally lost faith in a company and see no more investment worthiness in that company, perhaps it is time to just sell all the shares and suffer the loss and then put the remaining capital into other better investment options. Bear in mind it must be based on facts and evidences one has found out about the company and not just based on rumours and hear-says. That is why news and financial statements about a company must be assessed together for a better and complete picture of the situation. If the situation is not until that dire, then perhaps one can consider just reducing partially his shares instead of total sell off to reduce his risk of total loss in capital.
Really dire situations include filling for bankruptcy and investigations for cases of offences and frauds. Then perhaps one will have to quickly sell off totally all his shares to recover back as much as possible whatever remaining capital in such extereme cases. If not too extreme situations, usually paring down the amount of shares is already good enough.
At the end of the day, it depends on your belief whether the company' s fundamentals will maintain status quo, strengthen over time or deteroriate over time. I usually do not do anything until I see concrete trends in the news and financial results of the company. Thus, if one has monitored the progress of his invested company through time, one will already have an intimate understanding of his invested company to see any potential red flags earlier on when they start forming and especially confirming a trend which is a trend of deteroriating fundamentals.
Pls note that I am not suggesting any investment actions about Asian Pay TV Trust here that you should take. So far whatever I share are things I have noticed and picked up from their financial statements. You make the call here as I also have to make a disclaimer here that my sharing is not comprehensive and complete so I will not be responsible for any actions you make concerning the buying and selling of shares of APTT. But I do wish you the best in your investments! Cheers!
pinkowl ( Date: 20-Dec-2016 15:23) Posted:
Thanks, Jeremy.
Yes, they are a monopoly in the region, so income should be very stable. However, the price has plunged a lot the past few days. I wonder what bad news there are to come.
What' s your opinion - to hold or to cut loss?
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Thanks, Jeremy.
Yes, they are a monopoly in the region, so income should be very stable. However, the price has plunged a lot the past few days. I wonder what bad news there are to come.
What' s your opinion - to hold or to cut loss?
jeremyow ( Date: 20-Dec-2016 14:39) Posted:
However, we got to give them credit as well because probably their nature of businesses is a stable cash generating business promising stable recurring income due to their licensing and contract agreements which have a long term nature of locked in stable recurring income. Thus, they are probably not afraid of taking on a high gearing (with high amount of debts) with support from stable regular recurring cash generating businesses. As always, pls continue to do one' s due diligence as there are good points and points of concern to consider as well for assessing any businesses.
jeremyow ( Date: 20-Dec-2016 14:29) Posted:
Hi pinkowl, yes you are right that they are able to service their interest and other finance costs from their businesses. If you examine their 9M financial results (which I prefer to use 9M results instead of one quarter' s results to have a better grasp of a full year' s view to minimise any wide fluctuations from quarter to quarter results), they have about $107million operating profit while their interest and other finance costs is about $40 million. The operating profit already can cover the interest and finance costs, so they have no issue with paying their interest and other finance costs. And if you look at their past few years' financial results, they have no problems with paying their interest and other finance costs from their operating profit and finally still have net profit every year. Thus, they are still profitable.
On the cashflows statement side under cashflows from financing activities, their interest and finance costs have increased over last year' s same 9M period. This year' s 9M period shows cash-outflow of $40 million compared to about $28 million for last year' s 9M period. Seems more cash are used to pay (cash-outflows towards) their interest and finance costs over this year' s 9M period as compared to last year.
I will watch out for their interest and finance costs to see the yearly trend. If it continues to rise at a fast rate over consecutive years, it may mean they are either taking on more loans and interest bearing liabilities or their average cost of financing has gone up due to any revision in the interest rates and finance costs on existing loans and liabilities. If interest and finance costs shoot up too fast, it can become a potential hidden concern because if due to some downturn in the businesses, it may have problems fulfilling the payment of interest and finance costs which could bring a company down to potential insolvency (bankruptcy).
As of now Sep 2016, the gearing of Asian Pay TV Trust is around 54.1%. Last year Dec 2015 gearing was 52.7%. Clearly, there is a slight increase in the gearing over this year' s 9M period. As mentioned by nngeeh and also shown by the high gearing, there is a high amount of long term debt of about $1.2 billion vs $48 million cash and cash equivalents on hand. In this case, Asian Pay TV Trust' s gearing has exceeded that of most REITs which generally REITs try to maintain their gearing to be 45% and lesser.
So, a shareholder is really enjoying a good dividend yield of 10% and more at current share prices. But there is a catch to this in that the current enjoyment of this high dividend yield comes at a price to pay. This price is obviously not a high share price to pay (since the Trust' s share price has already been beaten down to be cheap now) but the price of taking on the risk of a high gearing with potential problems that could spring up should the Trust not be able to maintain the payment of interest and finance costs or refinancing of its long term debts when they come due or not be able to sustain the payment of their dividends at current amounts due to no improvement or even worse, deteroriation in their cashflows due to any unforeseen problems encountered in their operations.
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Yes. Noted that it' s still profitable after accounting for ITDA.
nngeeh ( Date: 20-Dec-2016 11:12) Posted:
Hi Pinkowl, I got the value from their 3rd Qtr report. You can look at their asset which value the license as $1.2B (intangible asset).
Even though the operation cash flow is reflected as $42M, but is before tax, interest and amortisation. The amortisation of 12M (which is from the capex from previous qtr or last year (not sure)) $12M). This $12M is actually made up of equipment which in theory ... not that easily to liquidate .... and if you really liquadate it, you can only get back a fraction of the purchase value.
If you deduct the amortisation, Tax interest and amortisation, and other minor cost, the profit is actually $10M.
pinkowl ( Date: 20-Dec-2016 10:42) Posted:
I' m not an expert in FA. Have recently re-read their financial statement, and interpret that they are able to service their interest from the stable earnings they receive (JeremyOw, did I interpret correctly? ).
So my intention is to wait till they are done with the infrastructure layout and see if their results will improve. Maybe in 2017 or 2018.
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I' m not an expert in FA. Have recently re-read their financial statement, and interpret that they are able to service their interest from the stable earnings they receive (JeremyOw, did I interpret correctly? ).
So my intention is to wait till they are done with the infrastructure layout and see if their results will improve. Maybe in 2017 or 2018.
nngeeh ( Date: 20-Dec-2016 10:29) Posted:
Thanks Pinkowl
Beside the high capex, i' m worried about the high debt of 1.2B vs 48M cash on hand. Unlike REIT, the assets are made up of multiple properties which the company can liquidate individual property to reduce debb, the asset tha AAPT is made up mainly of the Taiwan license which they value it at $2.3B. They can' t liquidate the license. So ...their debt will going up, and the additional cash generated from profit is going back into the capex. They are also using the current cash, and loan to fund the capex (as profit is unable to cover) and dividend ... it' s not sustainable.
If you look at China Fish, their main asset is the fishing license in Peru which is valued at more than $1B. When they ran into cashflow problem, as they can' t liquidate the license .... they end up filling for chapter 11 (of cause, beside the debt problem, they also were under CAD investigation).
Maybe we can start looking after 2017 when their capex is going down ... and below the profit. We' ll also need to know how they plan to reduce the $1.2B debt.
pinkowl ( Date: 20-Dec-2016 00:36) Posted:
Guys, APTT price started plunging when Taiwan announced the compulsory requirement for industry to upgrade to digital TV. Hence, they have increased their expenditure significantly on infrastructure. The upgrade (if i remember correctly) will take place till 2017. Separately, they are awaiting for content approval before implementing expansion to Taichung (or something like that). =)
U can visit their website to read up more.
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At the rate it' s dropping, dividend not sufficient to cover capital loss. I will wait for trend to reverse before loading more.
GuavaXF30 ( Date: 20-Dec-2016 09:50) Posted:
Thanks Jeremyow for this very detailed explanation. It' s very helpful for the uninitiated.
What will be interesting is how long APTT can maintain their dividend payments without going to the market or banks for more cash. If they can do this without additional funding, the price may shoot up quite fast.
After all, where else can you get such high dividend payout these days ?
jeremyow ( Date: 19-Dec-2016 21:17) Posted:
Hi nngeeh, we do not compare profit directly with cashflows. Profit is a reported non-cash item on the profit and loss statement and does not represent the company has received that amount of profits in real hard cash. This is a common misunderstanding by many people who see profit directly as real physical cash the company has obtained.
The actual real movement of physical hard cash is shown in the cashflows statement. That is why the profit and loss statement is the easiest to be subjected to accounting manipulation and possible frauding in some cases since it is difficult to audit the profits as there is no physical cash to count here. Everything is recorded in the book-keeping records of transactions related to sales and all these records may also be manipulated since no physical cash to count and ascertain every transaction is as true as recorded and signed by all parties involved.
However, it does not mean profit and loss statement is not relevant and not important. Most companies are not fraud cases so we can assume their financial statements should be as true as there is still regular auditing and checking of accounts.
All three financial statements have their own importance and use in the way we interpret a company' s profitability (which is shown by profit and loss statement), snapshot of a company' s financial health (which is shown by balance sheet statement) and finally a company' s ability to continue to perform which is its lifeblood (shown by cashflows statement that tracks real the amount of physical cash that has moved in and out of a company).
For Asian Pay TV Trust, if we look at its cashflows statement, its net cash and cash equivalents at the end of the statement has always been a decrease for the past close to 3 years since 2013 until latest 9 months financial results. It started off with around $96 million in cash and cash equivalents in 2013. And every year from 2013, there is always a net decrease in its cash and cash equivalents from its cashflows statements. The latest amount of cash and cash equivalents it has is about $48 million. If you ask me, it is pretty obvious that 50% of the Trust' s initial $96 million in cash and cash equivalents in year 2013 has decreased to $48 million as of current latest financial results which is like half of its initial amount of cash and cash equivalents have flowed/ drained out from the Trust over a period of close to 3 years.
The net increase or decrease in cash and cash equivalents is a net off from all its cashflows from operating activities, investing activities and financing activities. Thus, the Trust seems to be seeing cash outflows over the past close to three years. If it does not improve over this current net cash-outflow situation and return to positive net cash-inflow, it is just a matter of time that the Trust has to reduce its cash outflows such as reducing dividends or increase borrowings to pay its dividends if it still wants to keep up the same amount of dividends paid and also maintain its current operations.
If we look at the Trust' s balance sheet, we see a similar story there. If we look under the section on equity in its balance sheet, we see an item accumulated deficit there which the amount is around $181 million. What accumulated deficit means is that the company has either paid out more dividends and/or generated more net losses than net profits over the life of its business. If we follow the Trust' s past three years financial performance, it has not made any net losses yet, thus the total amount of dividends it has paid out is certainly more than the net profits it has generated over the past close to three years. Interestingly, if we compare the accumulated deficit amount in its latest balance sheet statement with the previous year' s amount, it has increased and not decreased. This again confirms the story that cash has been definitely draining/ flowing out of the Trust.
Thus, the cashflows statement, balance sheet statement and profit and loss statement used together will help one see a clearer picture/ story of what is currently happening about the company. In this case, it seems cash has been draining/ flowing out of the Trust but yet it can still continue to remain profitable. Does that mean one should bail out of the Trust now? It really depends also on how much one knows about the Trust what are its current plans and future plans? If things change in future due to certain actions undertaken by the Trust, then the Trust could also easily return back to a net cash-inflow position.
For me, I do not know about the Trust' s businesses and plans. What I see here is only a limited part of the story taken from its financial statements. It is always best to know as much as possible about a company to have a complete unbiased and objective view and financial statements only tell part of the story and often is an outdated story since financial statements always come after a company has completed all its business activities for the reporting period.
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Yes, your analysis is in line with the actual development. Very good work since you probably didn' t know the history. Thanks for your generous sharing.
jeremyow ( Date: 20-Dec-2016 09:46) Posted:
Thanks pinkowl for the updated news of the company. It will tie in with our assessment of its financials to give a much clearer picture what the company is now undergoing. I have also read about the current high capex of Asian Pay TV Trust which will last until 2017. Thus, we know high capex has been an ongoing concern. Thanks again. 
pinkowl ( Date: 20-Dec-2016 00:36) Posted:
Guys, APTT price started plunging when Taiwan announced the compulsory requirement for industry to upgrade to digital TV. Hence, they have increased their expenditure significantly on infrastructure. The upgrade (if i remember correctly) will take place till 2017. Separately, they are awaiting for content approval before implementing expansion to Taichung (or something like that). =)
U can visit their website to read up more.
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BBs want to earn money.
investshare ( Date: 20-Dec-2016 09:18) Posted:
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Seems like you have been stalking and taunting him due to whatever happened in hyflux? Why not keep the discussion in hyflux? Thanks.
amandayoung ( Date: 20-Dec-2016 01:34) Posted:
evil qanghoo vested in DBS too ? Ahhhhh i see
Qanghoo ( Date: 15-Dec-2016 12:12) Posted:
I think they call it knee-jerk reaction (to FED). I call it manipulation. A lot will mock my cynicism. But I stick by what I say.
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You are adorable.
leeshihui1986 ( Date: 19-Dec-2016 23:14) Posted:
Whoever bought at 0.995 good luck ( although I' m one of them hahaha )
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Guys, APTT price started plunging when Taiwan announced the compulsory requirement for industry to upgrade to digital TV. Hence, they have increased their expenditure significantly on infrastructure. The upgrade (if i remember correctly) will take place till 2017. Separately, they are awaiting for content approval before implementing expansion to Taichung (or something like that). =)
U can visit their website to read up more.
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Those in orchard road are mostly established companies. Closing outlets doesn' t necessarily mean going bankrupt. Could be a strategic move to make better use of capital.
investshare ( Date: 16-Dec-2016 13:46) Posted:
if business cannot repay, bank will takeover collateral, and biz close shop. And if collateral value cannot meet the liability, then bank suffer loss. If bank suffer big loss, then bank also close shop.
lionking ( Date: 16-Dec-2016 13:30) Posted:
Question : under slow economy growth, what happen if many business borrowers are unable to service their loans ? i was looking at some empty shops in Orchard Road, if they close down due to poor business, what will happen to the loans?
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Hoping this is " Sell on rumours. Buy on News" . Hehe.
spore1 ( Date: 14-Dec-2016 22:07) Posted:
| 4th telco . Be prepare for another price slashing .. Gd fit consumer. Lesser meat for operator . Tmr Up or Dw |
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Same thought. Based on the timeline or deadline given to TPG to provide coverage, it is clear it would take some time before TPG pose a threat (if any) to incumbents.
People may also have brand loyalty or inertia to switch. Will happily stay with m1 as customer and investor as of now till something more solid is presented.
Qanghoo ( Date: 14-Dec-2016 18:23) Posted:
Thx for the post. Seems like the new Telco is given a timeline of up to 4.5 yrs to provide compreshnsive nationwide coverage. Qn - will we have the patience to wait that long for satisfactory coverage? Sporeans (n maybe by now people resident in spore), who are often perceived to be impatient, complaining type, have the patience to bear with them for so long? Of course the new entrant is likely in its best interests to roll out full comprehensive coverage much faster. Still, my preliminary thought, based on the guided timeline, is that the threat posed to incumbents might be over-exaggerated, at least for the initial 1-2 yrs.
pinkowl ( Date: 14-Dec-2016 18:02) Posted:
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TPG is Singapore' s fourth telco
http://www.businesstimes.com.sg/companies-markets/tpg-is-singapores-fourth-telco
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But it' s a good thing for us to reload at low for this gem. =)
Love such " bad news" .
Qanghoo ( Date: 14-Dec-2016 12:23) Posted:
I think so too. The " reward" appears attractive n control measures are difficult to enforce in my view. So, cld be quite widespread.
pinkowl ( Date: 14-Dec-2016 10:56) Posted:
Luckily reloaded yesterday. This will surging again.
The HK thing no big deal lah....i think, since DBS not the only bank involved. Could be an industry " practice" .
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Just signed up to 1 year mySIM 20 plan. Got extra 1GB. Now 4GB for $20.
Guess that's how m1 is trying to retain her customers. Does starhub or singtel offer something similar?
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Looks promising. It has broken out - upwards. Uptrend now.
FreedomAngelz ( Date: 14-Dec-2016 11:09) Posted:
Hope it recover back to $0.60
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Wonderful! Oil effect.
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Luckily reloaded yesterday. This will surging again.
The HK thing no big deal lah....i think, since DBS not the only bank involved. Could be an industry " practice" .
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