Wednesday, 3 July 2019

Analysing the lost of Ascendas Hospitality Trust

This is the first equity I had blogged about and also my gem, being more than 24% of my Mum's income portfolio. In my eyes, Ascendas Hospitality Trust (AHT) is the only Hospitality S-Reit that is worth buying as others are plague with dropping DPU for years and yearly rights issue (The acquirer).

The market has adjust according to the offer. As AHT price gap up to $1.04 - $1.05, Ascott Reit (ART) price plunge to $1.27 -$1.28. From the table below, you can see that at $1.28, the value  from the scheme of arrangement is about the same that of AHT if I hold to the completion of the merger.

Table 1.AHT Dividend base on 2HFY2018
I do not own ART because I think it is not cheap, pro forma yield is 5.73% and the DPU has been dropping. I wonder if AHT properties can save their DPU. My aim is to acquire good Reit at 7% and premium Reit at near 6% yield. If you remember my first post on AHT, all other Hospitality S-Reit performed badly. So there is no reason for me to acquire ART at current price of $1.28 if I am not even acquiring off the market.

Base on current price of AHT and ART, the yield is 5.8% and 5.73% respectively. A slight drop in yield. In terms of yield, it may be similar, however in term of value I am not getting that. Simply put, it is as I have to force sell my AHT (which better than ART)  and  BUY ART at a high price.

Including fees, if I want to sell my shares now, from table 1, I would have a little more than $1300 less profits (if AHT DPU increase again and forgo the coming dividend)) or I can wait until I get the dividend. Going through the scheme also come with odd lots which some people dislike, some brokerage may not offer a easy way to offload them.

I will hold on to them for now till I have something to buy. It won't be easy getting a substitute currently. 


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