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Hidden Gem of e-Commerce REIT related to Alibaba
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Joelton
Supreme |
11-Jul-2022 11:50
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EC World Reit
On Jul 1, EC World Asset Management&rsquo s executive director and CEO Goh Toh Sim acquired 231,100 units of EC World Reit : BWCU +3.23% (ECW) at an average price of 42.1 cents per unit. With a consideration of S$97,406, this increased his direct stake in ECW from 0.10 per cent to 0.13 per cent.
Goh has over 26 years of experience in the management of industrial parks, real estate development and business management in China. Prior to joining the manager, he was the chief representative in China for Keppel Corporation where he was responsible for government relations and business development.
On Jul 6, ECW announced it had extended the maturity of outstanding onshore and offshore facilities to Apr 30, 2023, with the refinancing exercise ongoing. With the announcement, Goh added that unlike the residential sector in China, which is still experiencing headwinds, the e-commerce and logistics sectors in China are resilient.
He added that ECW&rsquo s assets are mature e-commerce and logistics assets that are generating stable returns for investors in terms of regular quarterly distributions since its initial public offering (IPO).
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hongsanrobert
Member |
07-Jul-2022 12:11
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7/7/22: Share price dip from $0.735 in Apr 2022 to 7/7/22 of $0.46 likely due to pushing down by Banker at P/B:0.446 means they used $0.446 to buy $1 asset. They are more interested to buy property than buy share, with successful extension of loan, Bankers have failed their attempt. Now a day, many Security Firm In House Broker also involve in Stock Trading, 0.46/0.735=0.625, with Margin Interest rate of 4.5%, they killed a lot of Margin Trader. |
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Joelton
Supreme |
07-Jul-2022 09:47
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EC World Reit extends maturity of outstanding facilities refinancing exercise ongoing
EC World real estate investment trust&rsquo s (Reit) : BWCU 0% manager said on Wednesday (Jul 6) that it has successfully extended the maturity date of its outstanding onshore and offshore facilities to Apr 30, 2023.
The Reit&rsquo s manager noted that this would give it enough time to complete an ongoing refinancing exercise.
Regarding the repayment of at least 25 per cent of the facilities by the end of this year, the manager said it is studying various options to raise funds, including the potential divestments of non-core assets.
On Jun 13, 2022, the manager entered into a non-binding memorandum of understanding to potentially divest Beigang Logistics Stage 1 and Chongxian Port Logistics, both of which are located in Hangzhou, China.
The Reit&rsquo s sponsor, Shanghai-headquartered Forchn Holdings Group, has also provided assurance through an undertaking to lenders that it will ensure the repayment will be made.
Executive director and chief executive of the manager Goh Toh Sim said that unlike the residential sector in China, which is still experiencing headwinds, the e-commerce and logistics sectors remain resilient. He is also optimistic that EC World Reit&rsquo s assets would be able to generate stable returns for investors.
The announcement comes after EC World Reit' s auditors, PwC, highlighted a material uncertainty in its FY2021 financial statements on the Reit' s ability to continue as a going concern.
At the time, the refinancing of loans due for repayment in May and July 2022 was not completed when the financial statements were issued. The financials therefore reflected that the Reit' s current liabilities exceed its current assets.
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Farmer
Master |
06-Jul-2022 18:54
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Stock price is trying to find a bottom and it may be imminent at ~ 0.40.. Lets see. Prices should move higher as the confident level build-up consider that last week the ceo bot ~ 231K @0.42.1 Having said that, investors are generally concern and will be more caution on this stock going forward Thus, its best for the sponsor to take it private by 30 Apr 23 as its nav & divd will definately fall ~25 to 30% after the divestment and refinancing. |
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marketuncle
Senior |
06-Jul-2022 18:02
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Loan repayment extended to April ' 23. Tomorrow to gap up... along with the another China REITs (e.g. Dasin) with refinancing issues due to ongoing credit winter, looks like getting repeated short extension is a given. The sky is not falling :P | ||||
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ayy002
Member |
01-Jul 11:11
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dumping like crazy. | ||||
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Joelton
Supreme |
01-Jul-2022 09:17
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What' s wrong with EC World REIT?
Probably a dose of dé jà vu, that is master leases, and capital management. The net asset value of EC World REIT as at end-2021 stood at 93 cents. Its unit price closed at 48 cents on June 30, 2022. That values EC World REIT at 0.51x NAV. The market capitalisation as at June 29 was $388 million based on units in issue of 809.49 million as stated in the 2021 annual report, The secured debt outstanding stood at $725 million as at Dec 31, 2021.
On June 29, the Singapore Exchange, questioned the REIT&rsquo s refinancing efforts following the latter&rsquo s announcements on June 1 and June 13. Why were the loan extensions for less than 12 months? Why are the lenders not financing beyond April 2023? Are there difficulties in obtaining onshore facilities?
Among the answers given, it turns out that the offshore lenders requested an undertaking when the manager was negotiating for the extension of the REIT&rsquo s offshore loans. &ldquo If at least 25% of the aggregate principal amount of the outstanding offshore fcilities is not repaid by 31 December 2022, EC World REIT faces an event of default which will trigger mandatory prepayment of the offshore facilities,&rdquo EC World REIT&rsquo s manager says.
The manager confirmed that event of default will trigger cross defaults across EC World REIT&rsquo s other existing facilities such as the onshore facilities and revolving loan facilities.
On June 13, EC World REIT&rsquo s manager signed and announced the entry into a non-binding Memorandum of Understanding (MOU) with the sponsor, to explore the potential divestment of two of EC World REIT&rsquo s assets - Beigang Stage 1 Logistics and Chongxian Port Logistics.
Valuation
In the IPO prospectus, the initial valuation of the properties did not take into account the master lease rents, but instead used underlying rental rates. The master leases were for a term of five years as the manager believed this would have been the optimal length of time required for the underlying rental rates of Chongxian Port Investment, the Stage 1 Properties of Bei Gang Logistics and Fu Heng Warehouse to reach the master lease rental level, the prospectus had said.
Yet, in FY2021, related party rents totalled $105.87 million, or 84% of revenue. This is marginally lower the FY2020&rsquo s related party rents of $93.92 million versus revenue of $109.72 million.
The REIT&rsquo s FY2021 annual report says that gross revenue of the portfolio was $125.5 million and the DPU for the full year was 6.263 Singapore cents. The projected revenue derived from market rent would have been $116.8 million and the corresponding DPU would have been 5.662 Singapore cents.
See also: Jim Chanos' latest big short: data centre REITs
As compared to the projected market rents, the master leases gross rent for Chongxian Port Investment, Bei Gang Logistics, Fu Heng Warehouse and Fuzhou E-Commerce are approximately RMB8.0 million, RMB24.4 million RMB2.4 million and RMB7.8 million higher respectively. The total difference of RMB42.6 million is 7.1% of the portfolio gross rent in 2021, the annual report states.
The difference in rents does not justify the P/NAV of 0.51x. The manager has blamed property market conditions in China for EC World REIT&rsquo s refinancing challenges. Investors are clearly nervous, given that so much of EC World REIT&rsquo s liquidity depends on the sponsor: rents, the valuation of the properties, and the undertaking to raise cash by divesting assets. As indicated in the annual report, $725 million of loans are secured, except for an inter-company loan of $426 million.
Analysts were sanguine about EC World REIT&rsquo s refinancing till June 29, when RHB Research started sounding a lot more cautious. Soochow CSSD Capital Markets says it is reviewing its recommendation. DBS Group Research was relatively upbeat following the June 1 refinancing announcement.
Now, with its loans at almost twice the value of EC World REIT&rsquo s market capitalisation, market watchers are likely to be a lot more concerned.
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Joelton
Supreme |
29-Jun-2022 09:01
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Raffles Infrastructure terminates executive director Ma Zhi after investigation
AFTER EC World Reit : BWCU -2.73%&rsquo s recent &ldquo disappointing&rdquo refinancing outcome, RHB has lowered its target price for the real estate investment trust (Reit) to S$0.55 from S$0.65, citing &ldquo limited catalysts&rdquo in a Monday (Jun 27) report.
This represents a further drop from RHB&rsquo s report in May, where it had previously lowered the target price for EC World Reit to S$0.65 from S$0.76.
RHB has maintained its &ldquo neutral&rdquo call on the Reit. The new target price represents a 0.9 per cent upside from the counter&rsquo s trading price as at 10.50 am. Units of EC World Reit were trading at S$0.545, down S$0.005 or 0.9 per cent, at the time.
EC World Reit has currently secured onshore borrowing facilities of S$300 million and US$87 million, which were due in June. While it was granted a temporary loan extension to Apr 30 next year, this is conditional to a 25 per cent (approximately S$100 million) repayment of loans by the end of 2022.
Furthermore, the Reit has onshore borrowings of 907 million yuan (S$187.7 million) that are due for refinancing this month &ndash except a 64 million yuan portion of debt that expires in July 2029 &ndash and is currently in talks to extend the maturity till April 2023, noted analyst Vijay Natarajan.
These &ldquo onerous refinancing terms&rdquo indicate the Reit&rsquo s concerns over its China assets, despite repeated earlier assurances that banks remain supportive, he said.
Natarajan expects the similar maturity dates of the loans to continue posing risks and limiting the Reit&rsquo s negotiating capabilities. He predicts updated refinancing costs will be 30 to 100 basis points higher than 4.2 per cent per annum, the existing blended interest rate.
With EC World Reit&rsquo s non-binding plans to divest 2 of its Chinese assets &ndash which account for approximately 27 per cent of total asset value and 30 per cent of total income &ndash to a sponsor, it will likely record a dividends drop and size reduction.
This will dry up liquidity and further widen the yield gap vis-à -vis larger Reits, Natarajan said. &ldquo With this news in the price, we see limited catalysts &ndash except for the Reit&rsquo s possible privatisation.&rdquo
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prophetjul
Senior |
24-Jun-2022 10:44
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https://dividendnewb.blogspot.com/2022/06/s-reit-with-100-exposure-to-china_23.html | ||||
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hwbrwong
Member |
20-Jun-2022 18:49
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Lots of reit managers posing as retail investors here | ||||
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prophetjul
Senior |
16-Jun-2022 14:40
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Looks like someone do not like the Truth here. LOL
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hongsanrobert
Member |
16-Jun-2022 12:15
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Dated 16/6/2022: On 12 May 2022 SGX announcement " The REIT has announced a distribution of 1.383 cents (SGD) per unit for the period from 1 January 2022 to 31 March 2022 (the &ldquo Distribution&rdquo )." , 0.01383x4/0.54=0.1024, 10.24% Dividend Yield. P/B =0.612, so after they sell those property, Book Value will increase if buyer is China Local Investor. They sell RMB, buy Sing Dollars to buy this stocks, golden opportunity for them, as they have no problem to get Central Approval. | ||||
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prophetjul
Senior |
16-Jun 11:01
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Badly managed Reit. DPU will fall. NAV will fall. Share price will fall. ALL very bad.
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hwbrwong
Member |
16-Jun-2022 10:55
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I suppose a big chunk of DPU will be gone after sale. The proceeds will be used to repay loan. Deleveraging will badly impact DPU. | ||||
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prophetjul
Senior |
16-Jun-2022 23:38
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Bottom falling out? | ||||
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Joelton
Supreme |
14-Jun-2022 08:39
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EC World REIT enters into non-binding MOU for potential sale of logistics properties in China to related third party
The manager of EC World REIT has entered into a non-binding memorandum of understanding (MOU) with Forchn International to explore the potential divestment of Beigang Logistics Stage 1 and Chongxian Port Logistics.
The potential divestment will be made with an entity controlled or managed by FIPL, a substantial unitholder of EC World REIT and the sole shareholder of the REIT manager.
FIPL is, in turn, wholly-owned by Forchn Holdings, the sponsor of EC World REIT.
The MOU is said to be for the purposes of facilitating negotiations between the parties only.
Under the MOU, the divestment will be completed upon the parties agreeing to the terms of any definitive agreements. The divestment will also be completed should the valuations delivered by independent valuers commissioned by the trustee of the REIT meet the necessary regulatory requirements under the Code on Collective Investment Schemes and the Listing Manual of the SGX-ST.
Unitholders of the REIT will also have to vote in approval of the potential divestment at an extraordinary general meeting (EGM) to be convened.
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prophetjul
Senior |
02-Jun-2022 18:51
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Sold a while back in March. Cannot trust this mangemnt with May 2022 dateline.
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laksaman57
Supreme |
02-Jun-2022 12:44
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Does extension of maturity date automatically mean same interest rate is being charged by lenders ?
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laksaman57
Supreme |
02-Jun-2022 16:41
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Prudent to pare down holding.
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prophetjul
Senior |
02-Jun-2022 16:02
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" At this juncture, the Manager expects that the refinancing exercise will be completed prior to the maturity dates of the term loans." In fact in the last announcement they informed that they were finalising the refinancing and should be completed before the maturity dates! They have misled the investors! " The Manager is in the final stage of negotiation for the refinancing of the term loans due in 2022 and will update the investing community of developments." https://ecwreit.listedcompany.com/newsroom/20220512_174048_BWCU_NUQWAG80FAGXRXYP.2.pdf |
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