Ascendas Hospitality Trust AGM 2019

Nothing new for those who are updated with the results of AHT. 2018 is the transition for AHT to acquire the Japan properties in Osaka and Korea. Some notable tidbits from the presentations by the CEO:

• Financial cost effective interest rate drop to 2%
• NPI increase 3%
• NAV growth 11% 
• DPU increase 2.9%
• 14 out of 15 is freehold
• Average age of portfolio has drop form 23 to 18.
• Gearing 33%, no debt repayment till 2021 except for 2020.
• More diversify portfolio/income (1/3 in Australia, Japan, (Korea+Singapore))
• Australia continue to have headwind with new supplies but still healthy 85% occupancy with full booking during weekends.
• Japan continues to show strong growth (Olympic 2020, 2025 world expo, new Univeral Studio Japan attraction, IR planned for Osaka)
• Korean hotels has been doing quite well, MICE activities

Weirdly nothing is mentioned about Shama Luxe Aurora Melbourne Central that will be finished development soon.

The Merger
The merger is say to be good as the new entity under Ascott will be more diversified portfolio, with higher debt headroom for inorganic growth. The enlarge entity will have higher float and may be included in a index fund with attract institution to invest.The thing is Ascott has been issuing rights to enlarge its AUM for the past years and diluted the shareholders and decreasing DPU. With higher debt headroom, I worry.  Ascott hold 150 million perpetual securities, which mean it has a higher gearing than reported. Apparently not much people care about the merger, like 50% left before the Q&A started on the merger. Think most assume 99% will vote yes.

Q&A 
The Q&A this time is quite poor with silly questions. Thanks the board for their patient to explain and answer the questions posed to them. I decided not to post about the Q&A this time, as it is too much for inexperience me to write them out. There is too much to and fro discussion this time round and information overload. Some highlights are  

If there is a significant change in the NAV on Asccot or AHT side, will there be an adjustment to the Merger offer?
Apparently there is some room for adjstment but It doesnt matter to me as NAV will go up or down. How much can 1Q or 2Q  affect the NAV?

Can the offer units for 1 AHT share to Ascott share be adjusted so that shareholders will not ended up with odd lots? Can consider reducing the cash component so that shareholder can avoid the odd lots to have the share component rounded to 0.8 instead of 0.7942 shares?
The board will take consideration of the shareholders and discuss from the advisers if there is anything to do possible better without comprosimisng on the trasnaction.

One thing I can conclude from the AGM is don't ask the barber whether you need a haircut.