What I Learnt from EC World REIT's 2016 Annual Report - Part 1

EC World REIT is a very new Reit that was listed in SGX last year. Their IPO offer price was $0.81. The closing price as at 28 Apr was $0.76. Usually I would not look at a Reit without past few years' track record for reference. Also, I would not invest in a China company. However, as this Reit is riding on the booming of e-commerce, I decide to take a closer look. To be honest, I only just know recently EC refers to e-commerce. It was outside my radar during listing last year once I heard it was a China company. EC for Expensive China? 😀 

Screenshot using My SGX App.

According to their 2016 Annual Report's Financial Highlights, the annualised distribution yield beats forecast by 0.9%. However, the current price is down by 4 cents. Investors who invested during IPO haven't seen a gain yet. If buy at current price is still cheaper than during IPO's price. 

ECW currently owns 6 properties occupied by 35 tenants. The occupancy rate according to the report is 100%. Impressive. The gearing ratio is 27.6%, way below MAS's limit of 45%. There's definitely more acquisitions in the pipeline. It's supposed to be a World Reit, not just China Properties. 😁

Next is the part where I am confused. I don't understand how to derive the 7.5% distribution yield. If we use 2.454/0.76=3.23%. That's for 2 quarters of dividends. If annualised, shouldn't it be 3.23 x 2 = 6.46% instead of 7.5%? Hmm. My Maths got problem? 

FY2020 is a year to watch out for. The lease expiry for that year looks scary and 3 of their properties are master leased. 

To be Continued ...