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Soilbuild Business Space REIT High Yield but Declining DPU

Soilbuild REIT Logo

For 2 consecutive quarters, the distribution per unit has declined for Soilbuild Business Space REIT. Based on the closing price of $0.72 on 30th June 2017, the annualised distribution yield is 8.2%. I have previously wrote about the investment risks of Soilbuild Business Space REIT here, thus I shall be repeating it again in this post.

I am writing this post just to re-validate my decision to sell Soilbuild Business Space REIT when opportunity arises. The REIT currently makes up 5% of my stock portfolio.

The following are my observations based on its current financials

Declining Distribution Per Unit quarter on quarter (q-o-q)

Distribution Per Unit has been declining. It has proven that we should not solely purchase a REIT based on its high dividend yield.

2nd Quarter 1st Quarter
Distribution Per Unit (“DPU”) (cents) FY2016 1.565 1.557
Distribution Per Unit (“DPU”) (cents) FY2017 1.514 1.539
Variance (6.3%) (1.2%)

Flat Net Asset Value

Flat or stagnant Net Asset Value at $0.72 for the last two quarters. By right after acquisition of Bukit Batok Connection, distribution or property yield should increase but it didn’t.

The Cursed 72 Loyang Way

72 Loyang Way still plagues Soilbuild Business Space REIT. The challenge remains to lease the entire space at 72 Loyang Way due to the subdued marine offshore and oil and gas sector.

Occupancy

Occupancy still at 92.6% which is slightly above the industrial average of 89.4%.

 

Looking at Tai Sin Electric Limited Market Depth

Tai Sin Electric has been on my watch list for quite some time and I have been hesitating to buy it since my last analysis on it as the stock price as been rather stagnant at $0.44. (Read more at My Personal Analysis of Tai Sin Electric Limited).

Today, I learn something new today called “Market Depth“. Above is a screen shot of the Market Depth of Tai Sin Electric Limited on 26th May 2017. On the left hand side of the above picture is the bid price and bid volume or in simple terms we call it as “buyers”. On the right hand side is the ask price and ask volume aka “Sellers”. The green colored cells represent the possible support level at S$0.425 and the red colored cells represents the possible resistance level at $0.460.

From the above picture, it shows that there is higher buy volume than sell volume and thus this stock Tai Sin Electric Limited is still bullish.

Here are some things I personally observed about Market Depth

  1. Market Depth information is dynamic. This means that the information is only valid for a day or maybe a few hours. It is simply based on supply and demand. When I looked at Tai Sin Electric Limited Market Depth this morning, there is asking price of $0.435 but you notice at this moment, it is gone. Someone has scooped up the queue price of $0.435!
  2. The order volume or price may not be accurate. If you see the lowest bid price and highest ask price, you will think how is that possible for the stock price to fluctuate that much within a day. If you place that bid, most like your trade will expire and will not be filled for the day.

In conclusion, if I bid Tai Sin Electric Limited at $0.42, it is unlikely for me to get it today because there is no asking price at $0.42. I should bid at $0.44 if I should decide to add Tai Sin Electric Limited to my stock portfolio.

My Personal Analysis of Tai Sin Electric Limited

This is one penny stock where I see frequent discussion and praises on how good this company is. I decided to do some research and personal analysis on this company to reduce the risk of stepping into a land mine if I decide to add this to my stock portfolio.

Tai Sin Electric Limited, a business with 35 years of history started as a cable manufacturing business in 1980. Tai Sin Electric was listed on the SESDAQ (“Stock Exchange of Singapore Dealing and Automated Quotation”) in 2005 and later transferred to SGX main board in 2005.

With a long business history, Tai Sin Electric Limited businesses were very diversified as it invested in Electrical Equipment, Switchboard, Lamps and Lighting and even Sanitory which deals with plumbing and sewage works. In 2007, Tai Sin Electric  Limited went through a restructure to classify their business into four clusters (Manufacturing, Distribution, Services, Strategic Investment). Read More

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