REIT-TIREMENT - REITs Investing & Personal Finance

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Thursday, April 01, 2021

EC World REIT Review @ 1 April 2021

Basic Profile & Key Statistics

EC World REIT (ECW) is a pure logistics REIT that owns 8 properties in China.

Performance Review

Gross revenue and NPI increased YoY by14.2% and 11.1% respectively mainly due to organic rental escalations and appreciation of RMB against SGD. Distribution to unitholders and DPU decreased YoY by 5% and 5.5% respectively due to higher retention amount for general working capital. 


Related Parties Shareholding

  • REIT sponsor's shareholding is high at 44.63%
  • REIT manager's shareholding is low at 0.74%
  • Directors of REIT manager's shareholding are high at 44.8%

Lease Profile

  • Occupancy is high at 99.3%
  • All income is received in RMB
  • WALE is short at 3.4 years
  • Highest lease expiry within 5 years is high at 75.4% which falls in 2024 and beyond, with more than 70% falls in 2024.
  • Weighted average land lease expiry is short at 37 years


Debt Profile

  • Gearing ratio is moderate at 38.1%
  • Cost of debt is high at 4.3%
  • Fixed rate debt % is low at 61.5%
  • All debts are secured debt
  • WADM is low at 1.6 years 
  • Highest debt maturity within 5 years is high at 85.3% which falls in 2022
  • Interest coverage ratio is low at 2.6 times


Diversification Profile

  • Top geographical contribution is high at 98.5%
  • Top property contribution is high at 27.3%
  • Top 5 properties contribution is high at 87.6%
  • Top tenant contribution is high at 36.4% 
  • Top 10 tenants contribution is high at 98.3%

Key Financial Metrics

  • Property yield is high at 6.2%
  • Management fees over distribution is low at 11.5% in which unitholders receive S$ 8.70 for every dollar paid 
  • Distribution on capital is moderate at 3.1%
  • Distribution margin is low at 39.3% 

Trends

  • Flat - Property Yield
  • Slight Downtrend - DPU, NAV per Unit
  • Downtrend - Interest Coverage Ratio, Distribution on Capital, Distribution Margin


Relative Valuation

  • Dividend Yield - Past 4 quarters DPU @ 5.359 cents / average yield @ 8.08% = S$ 0.665
  • Price/NAV - NAV @ S$ 0.89 x average P/NAV @ 0.82 = S$ 0.73


Author's Opinion

 Favorable Less Favorable
High Sponsor's ShareholdingLow Manager's Shareholding
High Directors of REIT Manager's ShareholdingAll Income in RMB
High OccupancyShort WALE
High Property YieldConcentrated Lease Expiry
Competitive Management FeesShort Weighted Average Land Lease Expiry
 High Cost of Debt
 Low Fixed Rate Debt %
 0% Unsecured Debt
 Short WADM
 Concentrated Debt Maturity
 Low Interest Coverage Ratio
 High Top Geographical Contribution
 High Top Property & Top 5 Properties Contributions
 High Top Tenant & Top Tenants Contributions
 Low Distribution Margin
 Interest Coverage Ratio Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

ECW performance has improved slightly as compared to the previous quarter. Note that I have excluded retention in the above analysis. I assume ECW would not distribute this amount because it is mentioned as retained for general working capital purposed in the latest result.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support as a Patron and get SREITs Dashboard PDF or Data Excel

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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