by: Dean Goh
All examples and stocks quoted here in this article and on the ProButterflyTM and REITScreenerTM site are for learning purposes; it does NOT constitute financial advice or a Buy/Sell recommendation. Contents are reflective of personal views and readers are responsible for their own investments and are advised to perform their own independent due diligence and take into account their own financial situation. If in any doubt about the investment action you should take, you should consult a professional certified financial advisor.
Since plunging to a low of HKD 1.65 a few months after its IPO listing in 2007, Fortune REIT (“Fortune”) has risen steadily to a high of HKD 10.04 at the end of 2016 (a more than 500% increase). However, just last month, Fortune hit a new low of HKD 8.56 since more than a year ago. Fortune has consistently traded below its fair value, and its current trading price (at point of writing) HKD 8.86, makes Fortune an even more undervalued stock.
At first glance, Fortune is an attractive stock to snap up. It boasts steady growth over the past 5 years in the key areas of DPU, NAVPU and NPI. Further, it has a very low gearing ratio at 27% and a healthy interest cover at 5.60 for FY 2017. Thus, it would be apt to look at the risks Fortune REIT may be exposed to going forward.
Fig. 1: SGD to HKD chart
Fig. 2: Tenant Makeup of Fortune’s retail malls
The achievements of Fortune REIT are well-known - high occupancy rates, positive rental reversions et cetera. So this article skips that. This article merely presents the future traps Fortune might fall into for prospective and current investors of Fortune to take note of, amidst the glitzy figures for Fortune. Such risks are influenced largely by uncontrollable global conditions and are often more unpredictable than President Trump’s personality. Thus, it’s good to get a better grasp of such uncertainties by being periodically updated by global news channels.
We really want to appreciate our many readers who trusted and supported ProButterfly throughout the years. It is only with you that we are able to successfully sell-out well ahead of time the January and March 2019 run of our flagship REITs to Riches: Everything You Need To Know About Investing Profitably In REITs workshop!
But there is good news for those who are still interested. We have opened early-bird registration for our June-2019 run taking place on 22/23-June-2019 (Sat/Sun)!
Using the early-bird promo-code EARLYBIRD100 will immediately get you $100-off of workshop price. For just $488 for 2 Full Days, this is by far the most comprehensive REITs investment workshop available in Singapore.
We focus on REITs can deliver both capital appreciation and sustainable dividends. During the workshop, we focus our learning with practical examples of real world REITs case studies both local and overseas. This is to ensure that attendees can immediately apply what they learn.
For more details and registration, check out our EventBrite page:
Meanwhile, do also check out the book REITs to Riches: Everything You Need to Know About Investing Profitably In REITs available at all major bookstores around Malaysia and Singapore. To purchase the eBook (PDF) copy, navigate to http://aktive.com.sg/store/reits-to-riches/.
If this article has really benefited you, then you would certainly love to check out our most popular post related to REITs and Business Trusts. We hope that you will gain much insight from ProButterfly's coverage of this sector:
Subscribe for our exclusive weekly newsletter. We do not share that content on the blog. It includes in-depth analysis on equities, IPO's & REITs. Join our exclusive inner circle today and get an edge in your investing!