Tuesday, October 23, 2012
Dynasty Reit/CRCT: Lim & Tan is advising that based on yield alone, investors should stick with well-tested CapitaRetail China Trust rather than subscribe to the Dynasty Reit offering from ARA and Li Ka-shing. House notes CRCT's 3Q12 dividend suggests a 5.9% yield, in line with HK-listed Hui Xian, which was ARA and Li's first Rmb-denominated REIT. Hui Xian is still trading around 20% below its IPO price. Ditto another of Li’s IPOs – S’pore listed Hutchinson Port. Dynasty is tempting investors with an indicative yield of 6.8-7.1% for 2012 and 7.0-7.3% for 2013. But that is because of the rental support which will come from the IPO proceeds (ie investors are being paid their own money). Without the support, the yield would be 3.2% and 4.2% respectively. Dynasty is best-suited for investors sitting on surplus Rmb deposits. It begins trade on Oct 30.