Asian Pay Television Trust (APTT)

[CY09]

hi CY09,

APTT's share price in 2020 = 0.13cents
APTT's share price in 2024 = 0.08cents (loss of 5cents or ~40%)
APTT's total dividends paid in the last 5 years = 0.05cents
APTT's TSR over the last 5 years = (0.08-0.13)+0.05 = 0

If we assume a WACC of 2% per annum, it means we would have lost 10% (or we can think it as opportunity costs)

On hindsight, Mr Market has been remarkably correct over the last 5 years. In the absence of an external crisis and very clear numbers for all to see (ie. the low payout ratio), it is puzzling that Mr Market continues to give it a 12-13% yield.

What are things that Mr Market may have seen but remains unseen by OPMIs like us?

It is the refinancing risk Mr market is worried about where debt facility ends 2025. 

I don't view this as a too high of a risk as compared to what the market perceives, let's see the answer 1 year from now. Till then APTT pricing will remain depressed

[weijian]

hi CY09,

APTT's share price in 2020 = 0.13cents
APTT's share price in 2024 = 0.08cents (loss of 5cents or ~40%)
APTT's total dividends paid in the last 5 years = 0.05cents
APTT's TSR over the last 5 years = (0.08-0.13)+0.05 = 0

If we assume a WACC of 2% per annum, it means we would have lost 10% (or we can think it as opportunity costs)

On hindsight, Mr Market has been remarkably correct over the last 5 years. In the absence of an external crisis and very clear numbers for all to see (ie. the low payout ratio), it is puzzling that Mr Market continues to give it a 12-13% yield.

What are things that Mr Market may have seen but remains unseen by OPMIs like us?

It is the refinancing risk Mr market is worried about where debt facility ends 2025. 

I don't view this as a too high of a risk as compared to what the market perceives, let's see the answer 1 year from now. Till then APTT pricing will remain depressed

Hi CY09,

As previously mentioned, I have observed that good companies tend to make you money even though you may be wrong, while the not-so-desirable ones tend to make you lose money even though you may be right.

You are probably right that the refinancing risk is low. And I also believe so, because since I held APTT back in 2005 (under MIIF), it never managed not to (refinance). But been right and making money are another tings.

Is Mr Market actually pricing in another rights issue to further pay down debt? Or will the refinancing be on very different terms (ie. the loan will be more amortizing then the previous one/s)?

On paper, the dividend payout wrt to FCF "looks conservative" because the bulk of FCF is been used to pay down debt. But if we look at it from another standpoint -  Because the amt. of dividends is small wrt to debt payment, any debt refinancing condition change will have a big impact on amt. of dividends been paid out.