@@joshconsultancy bought abt 43-45c/share back then, the dividend pay out was really consistent, think it is a cash cow no reason to sell for now. The only issue about this share is that it’s pretty stagnant in price.
As an KIT unitholder, you are absolutely right. Every five years, I received about 20 cents in DPU in turn I need to come up 50 cents to subscribe to the preferential offering. I believe this cycle will continue indefinitely. Thank you for sharing your insight. I had suspected the business model is not sustainable and you help me to reinforce my thought.
I was shocked that earnings per unit was 0.02 cent for FY22 as compare to 0,66 cent for FY21. All the while, we got 3.8 cents annual DPU is from capital distribution.
Agreed. About their most recent investment, I was also informed. This brought to mind the old KIT-City Spring incident. Since last December, I have been taking profits and reducing my positions. Currently, I have 28% of the stock and 72% of the cash, and I intend to further cut my position during this market upturn.
KIT is utility trust - utility is recession proof but trust distribute from profit and cashflow .. so drawdown on equity. So is Netlink Trust and Citispring. Logistics n Industrial reits have lower lease year left, similar to retail pty in China n HK
Logistics assets yes could also be 30+years lease left. This sharing was to highlight KMC which is until 2027 with new loan amortization kicking in 2023 and SENOKO WTE which is until 2024 only unless extended by NEA
@Josh Thanks for putting out this video on KIT. I’m also puzzled by this trust for a long time. My take is market seems to be mispricing industrial trusts as REIT like but they shouldn’t be. Suppose an asset or fixed contract has a WACC of 7%, 40% is financed by a loan eg 3%, equity holders should get a return of close to 10%. As the assets remaining life gets shorter, the trust price should decline because trust holders should demand 10% return while the DPU is only 6-7%. As you’ve a large following, I’ll put a disclaimer that I do not hold any long/short positions on KIT. I hope your video can spark some good discussion about not just KIT but all other industrial trusts.
Hi Zikai, its considered a "business trust". For anyone not sure, REITs have a tighter max leverage 50% and must pay out 90% income. "Business trust" have more flexibility. I agree that as the asset life is shorter (be it concession/license or asset useful life), equity holders should be compensated way higher. Even a bond pays back principal but if I understand this trust correctly, some asset/concessions are worthless at end of tenure. #disclaimer
I sold all my KIT which was yielding me 7-8% pa primarily after watching your video on it about a year ago. Been collecting it since it was called K Green Trust many years ago. Of course I'm aware that you don't ask anyone to buy or sell, just present your research, so I appreciate it and act on my own volition. Anyway I bought Mapletree Commercial Trust with the proceeds. Regretted like mad as I lost the KIT dividend and then suffered a substantial (paper) capital loss on MCT. Hope that your opinion is right. Time will reveal the truth, in line with the Warren Buffett quote you cited.
If we cover up share price and I have to pick between Mct then or kIT, I will still pick Mct. Every time… Even today… It’s freaking vivo city you own fatcamper :)
Best decision ever made: sold all sg stocks last year around this time, made zero losses, wake up my idea to the fact that sg stocks sucks and move on to long term index funds.
Maybe not all sg stocks suck. Or rather sucky stocks exist every where agree. Index investing is a totally different approach. But global index are still heavy US allocation
@@joshconsultancy yea i might have made a sweeping statement. however, i do think growth is quite stagnant for sg stocks. again, its just my opinion. nontheless, i wish you all the best in your allocations. to the moon!
Who is paying the concession end of the day? Who benefit from KIT end of the day? Their management style seem familiar to benefit who the most? hehehe what the name of this trust again?
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Collected dividend from KIT for the longest time, almost 10years. One hell of a cash cow.
Is it time to relook at it moving forward but congrats nonetheless
@@joshconsultancy bought abt 43-45c/share back then, the dividend pay out was really consistent, think it is a cash cow no reason to sell for now. The only issue about this share is that it’s pretty stagnant in price.
Thank you again Josh Tan. Supremely great in-depth research.
Thank you for the high praise =)
As an KIT unitholder, you are absolutely right. Every five years, I received about 20 cents in DPU in turn I need to come up 50 cents to subscribe to the preferential offering. I believe this cycle will continue indefinitely. Thank you for sharing your insight. I had suspected the business model is not sustainable and you help me to reinforce my thought.
I was shocked that earnings per unit was 0.02 cent for FY22 as compare to 0,66 cent for FY21. All the while, we got 3.8 cents annual DPU is from capital distribution.
No problem Hock chuan. See you around the channel
I do not how you compute that, if you hold more than 5 years, i am sure it can cover your preferential offering
Agreed.
About their most recent investment, I was also informed. This brought to mind the old KIT-City Spring incident.
Since last December, I have been taking profits and reducing my positions. Currently, I have 28% of the stock and 72% of the cash, and I intend to further cut my position during this market upturn.
KIT is utility trust - utility is recession proof but trust distribute from profit and cashflow .. so drawdown on equity. So is Netlink Trust and Citispring. Logistics n Industrial reits have lower lease year left, similar to retail pty in China n HK
Logistics assets yes could also be 30+years lease left. This sharing was to highlight KMC which is until 2027 with new loan amortization kicking in 2023 and SENOKO WTE which is until 2024 only unless extended by NEA
ithink what the PAP is now is also disturbing to me ...
@Josh Thanks for putting out this video on KIT. I’m also puzzled by this trust for a long time. My take is market seems to be mispricing industrial trusts as REIT like but they shouldn’t be.
Suppose an asset or fixed contract has a WACC of 7%, 40% is financed by a loan eg 3%, equity holders should get a return of close to 10%. As the assets remaining life gets shorter, the trust price should decline because trust holders should demand 10% return while the DPU is only 6-7%.
As you’ve a large following, I’ll put a disclaimer that I do not hold any long/short positions on KIT. I hope your video can spark some good discussion about not just KIT but all other industrial trusts.
Hi Zikai, its considered a "business trust". For anyone not sure, REITs have a tighter max leverage 50% and must pay out 90% income. "Business trust" have more flexibility. I agree that as the asset life is shorter (be it concession/license or asset useful life), equity holders should be compensated way higher. Even a bond pays back principal but if I understand this trust correctly, some asset/concessions are worthless at end of tenure. #disclaimer
I appreciate interesting and insightful analysis.
Thank you for the high praise
I sold all my KIT which was yielding me 7-8% pa primarily after watching your video on it about a year ago. Been collecting it since it was called K Green Trust many years ago. Of course I'm aware that you don't ask anyone to buy or sell, just present your research, so I appreciate it and act on my own volition.
Anyway I bought Mapletree Commercial Trust with the proceeds. Regretted like mad as I lost the KIT dividend and then suffered a substantial (paper) capital loss on MCT.
Hope that your opinion is right. Time will reveal the truth, in line with the Warren Buffett quote you cited.
If we cover up share price and I have to pick between Mct then or kIT, I will still pick Mct.
Every time…
Even today…
It’s freaking vivo city you own fatcamper :)
@@joshconsultancy How about MLT? Do you think the business is managed well?
@@AhWing89 I havent tracked MLT much. On surface, I think they are ok
Best decision ever made: sold all sg stocks last year around this time, made zero losses, wake up my idea to the fact that sg stocks sucks and move on to long term index funds.
Maybe not all sg stocks suck. Or rather sucky stocks exist every where agree. Index investing is a totally different approach. But global index are still heavy US allocation
@@joshconsultancy yea i might have made a sweeping statement. however, i do think growth is quite stagnant for sg stocks. again, its just my opinion. nontheless, i wish you all the best in your allocations. to the moon!
There are some which went parabolic like AEM, ifast, samudera… not that parabolic is good. It’s just less covered I guess
Thanks for the information. I will not buy more KIT.
Hope it was useful
Who is paying the concession end of the day? Who benefit from KIT end of the day? Their management style seem familiar to benefit who the most? hehehe what the name of this trust again?