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Post by scg8866t on Oct 9, 2014 21:03:59 GMT 7
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Post by scg8866t on Oct 9, 2014 21:50:26 GMT 7
Feel free to discuss.
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Post by me200 on Oct 9, 2014 21:52:34 GMT 7
IMO, we should exclude the "Change in fair value of investment properties" from earnings to derive net property profit. For example, Fortune reit EPU 1.9HK$ is over stated which resulted unrealistic PE of 3.6 PE is not a good valuation indicator for REIT. |
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Post by scg8866t on Oct 9, 2014 22:08:59 GMT 7
Do you mean PE for foreign currency reits should be excluded? I do agree that we have to treat them separately.
However, I find rolling PE to be a good gauge for the relative price value of reits in comparison. Still boils down to earnings then dpu dont you think?
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Post by me200 on Oct 9, 2014 22:40:45 GMT 7
In the P&L, there is a line item called "Change in fair value of investment properties".
This is to reflect the current properties valuation and thus is not a actual profit (cash generated from rental). The property generally is appreciating due to inflation and market sentiment. However, the flip side is true, ie. the property value is reduce due to economy or recession.
IMO, price/NAV is more appropriate valuation method as the main assets are properties. However, this should be read together with yield and gearing ratio as well.
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Post by scg8866t on Oct 10, 2014 6:37:43 GMT 7
In the P&L, there is a line item called "Change in fair value of investment properties". This is to reflect the current properties valuation and thus is not a actual profit (cash generated from rental). The property generally is appreciating due to inflation and market sentiment. However, the flip side is true, ie. the property value is reduce due to economy or recession. IMO, price/NAV is more appropriate valuation method as the main assets are properties. However, this should be read together with yield and gearing ratio as well. Yes price to book is included and net debt to equity covers the debt portion more specifically than total asset/total debt as it off sets cash with its debt, divide with unitholders' fund. I do find that P/E, Price/Nav and net debt/equity makes for a good cumulative analysis of reits in general. Thanks for the heads up though  |
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Post by me200 on Oct 10, 2014 8:10:23 GMT 7
Yes, no harm to include the PE as complement indicator for valuation.
When we look at REIT's earnings, we must strip off the "earnings increase due to property gain". Most REIT annual report total earnings and this make them look good.
Just emphasize my point:
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