Another week of earning report. Happy with the strong results reported from most of my counters. Let’s begin with the income counters.
REITS
| Counter | Period | Current Yield | 2021 | 2020 | 2019 | 2018 | CAGR (3-yr) |
| Mapletree Commercial Trust | 2H | 4.5% (2.18) | 5.32 (4.93)* | 3.37 | 4.64 | 4.57 | 2.6% |
| Mapletree Industrial Trust | Q4 | 4.5% (2.82) | 3.30 (3.00)* | 2.85 | 3.08 | 2.95 | 0.6% |
The increase in DPU for MCT is largely attributed to the contribution of MBC II. Tenant sales at Vivocity has increased back to about 86%. Not withstanding unforeseen circumstances, its metric should continue to improve. As for MINT, it turned in another stable performance which is likely to continue in the coming quarters.
Ascendas Reit and Capitaland China Trust announced their Q1 business updates. The key positive from AReit is overall 3% rental reversion. An OCBC report forecasts its DPU to be 16 cents for 2021. That will gives a yield of about 5.1%. As for CLCT, its Q1 NPI is already 80% of 20201H NPI. It is probable that its FY2021 distribution will be at about 10 cents, which gives a yield of about 7.2%. With its expansion to industrial properties and possibility data centres, the growth potential is huge. As such, I decided to switch out partly from AReit at $3.13 and buy more CLCT at $1.39 on Thursday.
Non-REIT Income Counters
| Counter | Period | REV (2021) | REV (2020) | REV (2019) | NP (2021) | NP (2020) | NP (2019) | EPS (2021) | EPS (2020) | EPS (2019) |
| DBS | Q1 | $3.85B | $4.02B | $3.55B | $2.00B | $1.16B | $1.65B | $3.14 | $1.80 | $2.58 |
| Micro-Mechanics | Q3 | $17.6M | $16.2M | $14.3M | $4.17M | $3.86M | $2.61M | $0.030 | $0.0278 | $0.0188 |
| Venture | Q1 | $686M | $673M | $928M | $65.3M | $60.3M | $90.9M | $0.224 | $0.208 | $0.315 |
DBS announced a superb quarter with all-time high quarter profit of $2.0B. This is achieved partly due to write back of $190 mil allowance. Excluding this write back, then its net profit would be $1.8B. That’s still a very good number, considering net interest margin has gone down by about 0.4%. This means DBS is likely to return to its previous dividend of $1.32 once MAS relaxes its guideline. That translates to a yield of 4.4% at $30.
Micro-Mechanics reported a stronger quarter year on year but slightly weaker performance compared to quarter 2. The following is management’s take on the lower qoq number,
“Historically the third quarter of the financial year, which follows the busy year-end holiday season for electronics and includes lower industry production related to Lunar New Year observances, is the slowest quarter of the Group’s financial year.“
From the numbers, its growth is decreasing on a quarterly basis. Not too concern about that yet as quarterly numbers do fluctuate but definitely would keep an eye on it. Based on this set of results, strong cashflow and balance sheet, I am confident that it will at least maintain its final dividend of 7 cents, which will bring the total dividend for the year to 13 cents. And that is a 3.9% yield based on current price of $3.33.
Venture provided a business update on its Q1 results. The recovery was not as fast as expected and this is attributed to the current shortage of parts and components.
“Although the Group is seeing a strong pipeline of orders, the main impediment to fulfilment is the ongoing supply disruptions for parts and components.”
Management guided a stronger quarter on quarter Q2 performance. Its balance sheet and cash flow remains good, so it is likely that they can maintain their interim and final dividend of $0.50 and $0.25 this year. That provides a yield of 3.7% at current price of $20.15.
US Growth Counters
| Counter | Period | REV (2021) | REV (2020) | REV (2019) | NP (2021) | NP (2020) | NP (2019) | EPS (2021) | EPS (2020) | EPS (2019) |
| Apple | Q2 | $89.6B | $58.3B | $58.0B | $23.6B | $11.2B | $11.5B | $1.40 | $0.64 | $0.615 |
| Shopify | Q1 | $988M | $470M | $320M | $254M | $22.3M | $7.1M | $2.01 | $0.19 | $0.06 |
| Starbucks | Q2 | $6.67B | $6.00B | $6.31B | $659M | $328M | $663M | $0.56 | $0.28 | $0.53 |
What a blast from Apple. As a trillion cap company, one would expect stable growth and not doubling of EPS. From the conference call, it looks like there’s tailwind for iPhone 12 due to implementation of 5G in various regions and with a larger installed based, services should continue to grow. A speed bump ahead due to shortage of parts for its iPad and Mac, but once this is sorted out at the global stage, their growth should continue.
Shopify continues with its amazing growth as Gross Merchandise Volume doubled, compared to a year ago. Not only are there more entrepreneurs using their platform, large traditional companies are going digital through them. With its expansion to fulfilment centre and payment, Shopify has a long runway ahead of them. In its conference call, management highlighted that they are seeing many opportunities for further growth and will reinvest their earning to fuel these growths. So they are expecting to be in the red for FY2021.
Starbucks’ numbers show that it’s back to pre-covid level. What caught my attention in the conference call is that management is taking action to rapidly transform their store portfolio and optimising them for shifting consumer behaviour. Starbucks also continues to grow in China market and I like that its mobile order is now available on Alibaba, WeChat and JD.com.
I definitely like what I am seeing for the above three companies and am confident that they will continue to grow for the next 3 to 5 years. Among the three, I am most excited about Shopify’s growth prospect and will probably add more if opportunity arises.
Towards Financial Independence 