Weekly chart. There was a 4 weeks selldown in Apr/May. Followed by 3 mths sideway accumulation with increasing vol and higher high candles. Floor&Ceiling has also formed. This is what attracted my attention in the first place :)
This week closed with bullish macd divergence above ceiling. Expecting it to visit recent high of RM 0.925.
Salient details:
Listed on 26 February 2007, par value RM 1.00
Currently own 15 properties.
Current DPS around 7.6 sen, or 8.5% gross yield at RM 0.880 entry.
Catalyst:
PKNS injecting 3 properties valued at RM 270M into ARREIT with expected Q410 completion. Partial new share, partial cash payment. Not sure if the 3 new properties are yield accretive, but back of the envelope calculation (which is likely flawed) revealed so much...
New share issue: 122,727,273 @RM 0.880
Existing share issue: 573,219,858
Loan drawdown: RM 162M
*Assumption - new properties yield 8.5%
current market cap: 573,219,858*0.88= RM 504.43M;
market cap increase: (270-162)/504.43= +20.41%;
issue increase: 122,727,273/573,219,858= +21%;
new cap: 695,947,131*0.88= RM 612.43M;
DY accretive: 162/612.43 = +26.45% (assuming 8.5% DY);
--> theoritical target price: 0.88*1.2645= RM 1.11 @8.5% or RM 1.34 @7.0% DY
--> theoritical cap appreciation: 1.11/0.88= +26.1% or 1.34/0.88= +52.2%
--> theoritical new DPS = 7.6*1.2645 = 9.61 sen
Catalyst II:
Further upside potential in dividend and capital play in 2011/12. PKNS plans to further injects around RM 500M worth of properties into ARREIT in 2011 bringing ARREIT asset value to RM 1.8B. Current asset value is RM 1B, RM 1.3B after the 3 properties injection.
Abolition of 10% WHT for local ikan bilis/ big fish investors in budget 2011?
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