30-11-2011, 01:39 AM
not a big fan of preferreds or perpetual bonds (which accounting wise, act as equity) especially in SGD. Cheung kong got away with 5 1/8% cost of equity and even hyflux got away with a 6%/8% cost of equity. At such low levels of cost of equity, if the business is right, it makes so much more sense to purchase the equity of the company.
On this vein, GLP's business model is starting to look a little more interesting to me. yes, it is a property company and no, it doesn't pay any dividends but those assets do generate a decent amount of profits/cash per year. I don't totally buy into the whole China growth story yet and may come back to this when their portfolio is more stable.
Possible short-term catalysts could be spinning of their Japanese assets into a REIT but this is unlikely in the near future seeing that many/(most/all?) reits in Japan trade below book value and it would be a stretch for GLP to justify selling their assets at/above book.
So not vested at the moment
On this vein, GLP's business model is starting to look a little more interesting to me. yes, it is a property company and no, it doesn't pay any dividends but those assets do generate a decent amount of profits/cash per year. I don't totally buy into the whole China growth story yet and may come back to this when their portfolio is more stable.
Possible short-term catalysts could be spinning of their Japanese assets into a REIT but this is unlikely in the near future seeing that many/(most/all?) reits in Japan trade below book value and it would be a stretch for GLP to justify selling their assets at/above book.
So not vested at the moment