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Lippo Mall - selling at a big discount
19 Mar 2020 (72 views)

I bought Lippo Mall Trust at the price of $0.22. It had a dividend yield of 8%. It owns several malls in Indonesia. During the past five years, the average price was $0.35 and the highest was $0.50.

The share price dropped to below $0.11 today. An existing shareholder had a large lot to sell.

I wondered if the company was in financial trouble. I looked at Yahoo Finance website and saw the past four years. The interest expense (to pay the borrowings) was only 20% of the operating income. Even if the rental income dropped by 50%, it could easily cover the interest payment. The debt to equity ratio is 60% (which is acceptable). 

I do not know if they have a large borrowing that is due for re-financing. Even if they have, they should be able to refinance it. 

I do not know why the existing shareholder is keen to sell the shares at such a big discount. Maybe, he need to raise cash to pay off some debt elsewhere.

So, I bought the shares.

You can read more about this share here:
https://finance.yahoo.com/quote/D5IU.SI?p=D5IU.SI

Tan Kin Lian


 


Lippo Mall - selling at a big discount
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I bought Lippo Mall Trust at the price of $0.22. It had a dividend yield of 8%. It owns several malls in Indonesia. During the past five years, the average price was $0.35 and the highest was $0.50.

The share price dropped to below $0.11 today. An existing shareholder had a large lot to sell.

I wondered if the company was in financial trouble. I looked at Yahoo Finance website and saw the past four years. The interest expense (to pay the borrowings) was only 20% of the operating income. Even if the rental income dropped by 50%, it could easily cover the interest payment. The debt to equity ratio is 60% (which is acceptable). 

I do not know if they have a large borrowing that is due for re-financing. Even if they have, they should be able to refinance it. 

I do not know why the existing shareholder is keen to sell the shares at such a big discount. Maybe, he need to raise cash to pay off some debt elsewhere.

So, I bought the shares.

You can read more about this share here:
https://finance.yahoo.com/quote/D5IU.SI?p=D5IU.SI

Tan Kin Lian