Added more Raffles Medical and initiated a position in Daiwa House Logistics Trust

Continue buying in May after my earlier purchase this month. Click on the image below if you would like to find out more about my previous purchases.

Raffles Medical Group

Let’s start with the easy one. Buy reason is simply because I am convinced by the growth trajectory shared during the AGM.

  • On the local front, while healthcare segment might see less activities post-covid, the return of foreign patients means more activities for the hospital segment.
  • The group is gaining traction in China and Dr. Loo is happy with what he is seeing.

So though there is no Q1 business update, I think they will continue to do well for the next few years.

Daiwa House Logistics Trust

Thanks to GokuSan and Sporeshare from InvestingNote, I got to know about Daiwa House Logistics Trust. Only after googling (yup, I am not on ChatGPT yet), that I realised it was only listed on Nov 2021. As I normally don’t buy IPO, it did not appear on my radar till now.

The numbers from the latest annual report and Q1 results look pretty decent. Reminded me of Parkwaylife REIT with its long WALE and high interest coverage rate. Of course besides the point that both operate in Japan and hence benefitted from its low interest rate, they are totally different.

Looking at the numbers, I do wonder why the price has dropped by 30% since its IPO and why market is valuing it cheaply.

It could be due to the strengthening of SGD against JPY that caused a drop in its revenue and net property income. However, that has not affected the distributable income and DPU, and it was able to keep to its IPO forecast.

Maybe, it could be due to the change in key personnel within this short period where CFO resigned within a year of listing. And just last Friday, they announced of change in CEO.

Or maybe it’s just a general lack of confidence towards overseas listed REIT.

I don’t know.

Further reading

Further googling led me to the more articles. I found an interesting information on the management fees from The Smart Investor’s article Better Buy: Daiwa House Logistics Trust Vs Digital Core REIT. It’s good to know that the performance fees of the REIT is linked to the year-on-year increase in DPU!

Vince did a through review of DHLT of its FY2022 results in his article Daiwa House Logistics Trust Review @ 28 February 2023 by REIT-TIRMENT. He also shared his opinion on what’s favourable and less favourable about the REIT.

10 in 10 – Daiwa House Logistics Trust (DHLT) by SGX Research provided a good overview of the REIT and finally I agreed with DBS analysts’ view that things might look brighter going forward in their article DBS maintains ‘buy’ call for Daiwa House Logistics Trust, raises TP to 80 cents.

Initiated a small position

There is much to like about DHLT but the key risk to me is that it is really new. With little track record on how the management deals with renewing of leases, acquisition, rights and other possible issues, I do not know how things might work out going forward.

However, given that it is only trading at $0.565 which translates to a yield of 10% if it can sustain its dividend, I decided that it is worth the risk to take a small stake in it.


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