AusNet Services (formerly: SP Ausnet)

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#21
(16-05-2012, 08:48 AM)KopiKat Wrote: SPAusNet : 2H12 Results cum Fund Raising

Guidance for FY13 : DPU = A8.2ct (up from A8ct)
Dividend Breakdown for 2H12 : A4ct = A1.333ct (Franked) + A2.159ct (Interest - subject to 10% Tax to be deducted) + A0.508ct (Capital Returns)

Presentation

Financials

3-for-20 Rights @ S$1.25 (A$1)

Will resume trading today, I wonder why they need to halt for 2 days? For the Institution Offer? Extracts from SGX,

Strong Institutional Support for SP AusNet’s Entitlement Offer

The Institutional Entitlement Offer received strong support from both existing and new institutional investors. Approximately 96% of Entitlements offered to eligible institutional securityholders were taken up. In addition, significant demand from new institutional investors as well as existing institutional securityholders for allocations in excess of their Entitlement resulted in full subscription of the Institutional Entitlement Offer.

Hmm... 96%... Even offer excess to NEW Institution Investors! Huh
Will be interesting to watch the market reaction today since they were halted during the past 2 days of STI weakness. Will it stay strong like many other Hi Dividend Yield Stocks? Or face a battering cos' of the Rights Issue (Not a very big one)?

<Not Vested>
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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#22
SP Ausnet should be analysed in the context of an Aussie utilities.

In the face of falling Aussie interest rates, many investors have been flocking to high yield defensives in recent months - no different from that in Singapore except that there are wider selection (there is basically telcos on SGX).

SP Ausnet has for first time since FY 09 raised guidance and that is notwithstanding a rights issue - very positive outlook for a regulated sleeping co.

While the straight yield of 7.7% based on ASX closing of A$1.06 appears a little tight relative to risk free A$ deposits of around 4%, its regrossed (similar to Singapore's defunct section 44 tax credits) yield of around 8.7% is very enticing for investors down under - which helps in explaining to strong insti demand for the counter.

Relative to Cheung Kong linked competitor, Spark Infrastructure's yield of around 7.1%, the yield differential is simply too huge.

Light on light, both companies are expecting a regulated asset base (RAB) growth of 8% pa over the next few years. SP has a lower gearing of closer to 70% vs Spark's targeted 75% (both against RAB). Only difference, Spark's DPU guidance of 3-5% is higher than SP's 2-2.5% over the next few years.

The one overhang on outstanding litigation - has been partially resolved with one more pending to be heard in Jan 2013. Even then, Sp has always maintained that they have sufficient insurance coverage to meet potential liabilities.

In any event, judging from the day reversal price pattern on ASX today, SP is expected to reap the benefits of defensiveness with decent low growth once market finds its nerves.
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#23
Some interesting articles on Australian utilities:

http://www.businessday.com.au/business/p...1yerv.html

http://www.businessday.com.au/business/i...1qvix.html

http://www.businessday.com.au/business/r...1nuyn.html
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#24
In my case, as I don't invest in ASX due to my fears of direct FOREX exposure, I looked for the closest comparables to SPAusNet in SGX. I know it's not a going to be a good comparison but that's the best for me.

The closest I can find would be those in the Infrastructure biz and I used CitySpring & KGT. MIIF was also considered but their Infrastructure assets are no where close, so I'll leave it out. I'm a Yield freak and not very sophisticated in my analysis, so I simply looked only at their Yields.

SPAusNet
- Gross Div = A8ct
- Dividend Breakdown for 2H12 : A4ct = A1.333ct (Franked) + A2.159ct (Interest - subject to 10% Tax to be deducted) + A0.508ct (Capital Returns)
- To estimate the Nett Div, I used 0.9 * A2.159ct for the Interest Component & Exchange Rate from Yahoo @ 1.2527
- Nett Div = S4.7403ct => Yield = 7.21% @ $1.315 (Friday close)

CitySpring
- Div = 0.82ct/Q
- Yield = 8.865% @ $0.37

CitySpring is my closest comparable as it also has a massive asset in Australia ie. A$ FOREX exposure and both their Gearing are similarly high in the 60% region.

KGT
- Div = 7.82ct (FY11)
- Yield = 8.06% @ $0.97

KGT has zero debts and can increase their yield further via acquistions funded by debts. But, it's not a very close comparable as all their biz are in Singapore. That can be a plus tho' as no FOREX risk.

Warning : My comparison is overly simple as I only looked at Yield & Gearing. So, in my case, the choice is very clear (if I really want to invest in any of the above 3). Even with the Gross Div raised to A8.2ct, it'd only add ~0.2% to the Nett Yield ie. 7.4%.

Warning-II : Some of the experts in this forum had shared on why KGT Yield is not attractive when computed using DCF (using their assets concession life span). Do go read the other threads on KGT & CitySpring for more info
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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#25
Anybody taking up your allotment of the new units at $1.25? Current unit price is $1.285 cum distribution.
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#26
(26-05-2012, 03:58 PM)VestedInterest Wrote: Anybody taking up your allotment of the new units at $1.25? Current unit price is $1.285 cum distribution.

xd @ $1.245 and now $1.245 / $1.25. Not easy to decide for shareholders. Key dates to watch,

Thursday, 31 May 2012 : Settlement of Institutional Entitlement Offer and early acceptances of the Retail Entitlement Offer

I'm not sure if Institutional Investors can still decide not to accept even though they'd indicated their interest to subscribe earlier on. Should be interesting to watch if they do announce and mkt price remains at current level.

Tuesday, 12 June 2012 : Retail Entitlement Offer closing date

Not vested, just watching and learning...
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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#27
see if ml can help any buddies here


Attached Files
.pdf   spn-ml.pdf (Size: 263.68 KB / Downloads: 19)
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#28
Index inclusion - huat?

http://asx.com.au/asxpdf/20120601/pdf/42...twb2fd.pdf
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#29
(01-06-2012, 07:44 AM)greengiraffe Wrote: Index inclusion - huat?

http://asx.com.au/asxpdf/20120601/pdf/42...twb2fd.pdf

I was curious if there'd been any immediate impact at ASX side even tho' changes to the S&P/ASX 100 Index will be effective only from 15-Jun after mkt close. Current price changes at ASX,

AUT (Addition) : A$3.33, -9ct
SPN (Addition) : A$1.01, Unchanged
AQP (Removal) : A$1.075, -12.5ct
CSR (Removal) : A$1.61, -4ct

Hmm... interesting! Looks more like ASX is having a bad mkt day! Went to chk, S&P/ASX200 = -30.3 @ 4046 (-0.75%). Only SPN is unchanged, the other 3 fellow affected component stocks are all down, whether to be added / removed.

Note : As ASX is still active (mkt not yet close), the prices / figures above will likely be different

PS. SPN liquidity is a lot more at ASX than SGX, so for me, I'd usually check at ASX 1st before making any buy/sell decision.
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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#30
Old article but may still be relevant as RBA (central bank) lowered rates by another 0.25% again, only 0.5% away from GFC low's. Hence with lack of visibility on growth companies, defensives may yet benefit from stable DPU's and possible yield compression (capital gains)


http://www.businessday.com.au/business/r...1qvo2.html

Resilient stocks refuse to yield to economic storm
February 3, 2012
Duet and Spark should appeal to investors chasing dividend yields, writes Brian Robins.
Infrastructure stocks should be one of the most defensive areas for investors to have an exposure to during times of financial upheaval, thanks to their steady returns.
But that did not help during the global financial crisis when they, too, were sold off in 2007 and 2008.
Even so, unlike property trusts, which have also been traditionally favoured by conservative, yield-conscious investors, regulated infrastructure stocks such as SP AusNet, Spark Infrastructure and Duet have come through the downturn largely unscathed, with their balance sheets intact.
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In contrast, many large property investors were forced to raise billions of dollars in fresh capital, with returns suffering as a result.
Each of these three regulated utility investors controls a spread of infrastructure assets - primarily electricity and gas distribution - where underlying demand is resilient and typically not affected much by the economic cycle.
And falling interest rates help to heighten the potential attractions of this sector of the sharemarket for yield-conscious investors.
''It may be negative for operating earnings but … as yield stocks they come into their own,'' Matt Chambers, an analyst with Legg Mason Equities, said of the sector.
But even with their insulation from the economic cycle, problems can still emerge.
SP AusNet, for example, has been caught up in litigation surrounding Victoria's devastating 2009 bushfires amid allegations its power lines may have caused one of the fires, raising an element of risk that will take some time to resolve.
Spark raised $295 million in 2010 at $1 a share as it shored up its balance sheet before a large capital spending program and, last year, it brought its external management ''in-house'', with both moves helping to increase investor support for the stock.
It has subsequently enjoyed a steady share price rise of more than 30 per cent, prompting some analysts to downgrade their recommendation on the stock, given the decline in the yield and the prospect of better value elsewhere in the sector.
''Duet has a superior yield and growth profile at present,'' an analyst who did not wish to be identified said. ''It also has an unregulated asset, the Dampier-Bunbury gas pipeline, which helps to differentiate it from others in the sector'' which mostly hold regulated assets.
Other analysts are not so sure.
Ian Myles, at Macquarie Bank, favours Spark and Duet, but with Spark preferred at present levels.
''The valuation remains relatively robust,'' he said of Spark. ''It has won the points of contention in its dispute with the Australian Energy Regulator, and there is the margin for dividend upgrades.''
He has a price target of $1.43 for Spark. ''There's the potential of another 8¢ upside for the share price on our valuation, plus a dividend to come,'' he said.
With regard to Duet, he said it ''is fair value at these levels''. It closed at $1.81 yesterday.
SP AusNet shares the defensive aspects of the other regulated utility stocks but ''at this point we prefer Duet or Spark,'' Mr Myles said.
''There are some issues to resolve [for SP AusNet] - the smart meter roll-out in Victoria and the bushfire civil suit.''
Declining government bond yields are also positives, since they will help drive dividend growth.
''All have strong organic growth with large capex [capital expenditure] spends,'' Mr Chambers said. ''M&A [mergers and acquisitions] hinges on whether the NSW government ever gets around to privatisation, but most have their hands full … for the time being.
''With SP AusNet, we're looking for clarity over any possible bushfire liability,'' he said.
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