Asian Pay TV Trust dances with the wolves?

From IPO price of $0.97 in 2013, Asian Pay TV unit price had plummeted over the years to reach the current dismal level of $0.38.  Investors who had bought into Asian Pay TV during the IPO days and held the units till now would have lost their pants even if the grand total of $0.41 distributions had been factored in.

Apart from punching the wall, investors of Asian Pay TV Trust should certainly do some soul-searching. Even the most ardent supporters of this counter must be having second thoughts and wonder if this business trust can ever stage a rebound. My guess is that shareholders should hope for the best but expect the worst.

When a business trust is trading at such abysmal level, the price level may not represent value. But what is more galling for unitholders of Asian Pay TV Trust is that despite trading at such cheap level, the management did not even bother to carry out any unit repurchases from the market. The lack of action on the management’s part is obviously not inspiring, at least from the perspective of the investors.

However, Asian Pay TV Trust is not a lost cause yet,  because it is backed by the big boys. Temasek Holdings is the biggest shareholder, with 7.93% stake. With such strong backer, it is difficult to imagine Asian Pay TV Trust going down in flames. The key to making money out of this counter is actually to determine the right entry level to minimize the downside risks.

Falling knife?

The purpose of this article is definitely not to throw mud at Asian Pay TV Trust, but to provide a balanced and holistic view of the risks and investment merits of this counter. As usual, this is an opinion article and the information expressed in this article is not meant to be financial advice. Members and readers should do their own due diligence before deciding whether to enter or exit this counter.

At current price level, the DPU yield of Asian Pay TV is indeed at an alluring 17.11%. Is this too good to be true? After all, most yield levels for blue chips are 5 – 6%. StarHub’s yield is 9.41% but this is an exception rather than the norm in the Straits Times Index (STI).

For Asian Pay TV Trust, the massive decline in unit price had caused much value destruction for those who had bought during IPO and held on till today. Given such terrible run, shareholders have every right to be angry with the management.

In my perspective, the problem with [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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