Friday, December 30, 2016

Asian Pay Television Trust - from IPO price of $0.97 to $0.38. Dividend yield of 18.4%!

HSYT came to me again to say this motherhood statement: :"The time to buy is when there's blood in the streets.Go buy APTT. Drop a lot! Dividend yield 18.4%,  P/B 0.45!"

Nice, worth a look! Except that this phrase sounds vaguely familiar...Rothschild or something. Anyway, a drop of $0.97 to $0.38 in 3 years is darn huge and it would be very interesting to point the blame at something, interest rate rise, China factor, franchise rights not being able to renew, e,t.c and seriously, this pointing finger is pointless and it is after the FACT that it has dropped. not before the FACT where one can profit immensely with usual all talking heads. Still, its good to know what the risk are, if one were to decide to enter this Asian Pay Television Trust ( a spin off of  the now delisted Macquarie Infrastructure International Trust in 2013). Their only asset is the Taiwan Broadcasting Communications ( TBC)

Is there any catalyst for this drop in share price?

Proposal to Replace National Cable TV Rate Caps due to digitisation
From 2013 IPO Prospectus
Has this proposal been set in stone by the National Communication Commission? If yes, what is the digitization proportion of TBC in 2016?

If TBC fails to meet the timeline, it has a cap in the amount it can charge which could reduce its earnings going forward.

Splitting of 100 channels to four packages A,B,C and D in 2017
From 2013 IPO Prospectus
The proposal is that from 2017, TBC has to split its 100 channels into four packages. Customers can then choose to buy what they need instead of paying for some channels which they don't watch. Will this cause a reduction in their earnings?

Material licenses held by TBC due for renewal in 2017 and 2018

2 out of 5 of their cable licenses are due for renewal in 2017. The other 3 are due for renewal in 2018.
Now the questions is will they be renewed ? If yes, is it expensive to renew or else more debt or rights needs to be undertaken to fund this renewal?
Anyway, it has an existing debt of SGD$1.2 billion dollars currently ( gearing of 47.2%).

I have emailed the investor relations for the above and hope they answer.

1 comment:

  1. WOW! your headline caught my attention... Dividend yield of 18.4%! That's crazy and too good to be true?


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