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01-08-2014, 04:15 PM
In this long overdue correction, APTT stand out strong, I believed is due to the defensive yield of the counter.
At 85 cents, it still yield almost 10%.
The tax settlement with Taiwan tax bureau is settled within expectation as lied out in the prospectus.
When the tax announcement is made, I made a bid at 77.5 cents but got it at 77. Why is market so pessimistic about it?
1) competition is set to increase
2) growth at Taichung is highly uncertain, since they are unlikely to hit out at Kbro (to prevent retaliation at home turf) so the untapped market is relatively small.
But with the short term spanner gone, dividend at 10% for 2014 is all but assured. With capex within lower limit of my calculation for the next 2 years. 80 million instead of 120 mio, it is also highly unlikely that 2014 will see a drastic fall in distribution.
In the longer run, sustainability of distribution depends on the growth and how well they hold off competition. Will need to scrutinized the churn rate and the ARPU over the next 2 quarters beside subscription numbers.
But with 1.5 years of clear sky, could APTT benefit further with the movement to defensive yield?
It has already risen about 10% without declaring a 4 cents dividends, (they keep their distribution guide of 8.25 cents for 2014 when they announce tax settlement. Could APTT test 90 cents with the coming CD?
Volume is improving too, since the announcement. Finger crossed.
At 85 cents, it still yield almost 10%.
The tax settlement with Taiwan tax bureau is settled within expectation as lied out in the prospectus.
When the tax announcement is made, I made a bid at 77.5 cents but got it at 77. Why is market so pessimistic about it?
1) competition is set to increase
2) growth at Taichung is highly uncertain, since they are unlikely to hit out at Kbro (to prevent retaliation at home turf) so the untapped market is relatively small.
But with the short term spanner gone, dividend at 10% for 2014 is all but assured. With capex within lower limit of my calculation for the next 2 years. 80 million instead of 120 mio, it is also highly unlikely that 2014 will see a drastic fall in distribution.
In the longer run, sustainability of distribution depends on the growth and how well they hold off competition. Will need to scrutinized the churn rate and the ARPU over the next 2 quarters beside subscription numbers.
But with 1.5 years of clear sky, could APTT benefit further with the movement to defensive yield?
It has already risen about 10% without declaring a 4 cents dividends, (they keep their distribution guide of 8.25 cents for 2014 when they announce tax settlement. Could APTT test 90 cents with the coming CD?
Volume is improving too, since the announcement. Finger crossed.
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance