ACCORDIA GOLF TRUST
ADQU.SI
Accordia Golf Trust - A yen for yield
- AGT’s sponsor is the top golf course operator in Japan and has injected 89 golf courses into AGT.
- Bloomberg consensus puts forward dividend yield at 10.0% and forward P/BV at 0.75x.
- Loan-to-valuation ratio of 28.9%. Management targeting accretive acquisitions from sponsor.
- Targeting ¥50bn worth of acquisitions by end-Mar 17.
- Dividends are derived in yen and paid in S$. Company does not hedge exchange rate.
Sponsored by number 1 golf operator in Japan
- AGT is a business trust comprising investments in golf course assets in Japan. Its initial portfolio (IP) consists of 89 golf courses located across Japan. 86.4% of the IP is located in the three largest metropolitan areas in Japan, which have better developed transport infrastructure and can be conveniently accessed by customers.
- Its sponsor, Accordia Golf Co Ltd is the number 1 golf course operator in Japan.
Attractive yield, trades below book value
- Based on Bloomberg consensus expectations, AGT trades at a forward dividend yield of 10.0% and a forward P/BV of 0.75x. Dividend payouts are in yen and are converted into S$ at the exchange rate on the payment date.
- Currently, AGT has no plans to hedge the exchange rate exposure.
Accretive growth opportunities from sponsor
- AGT’s sponsor is the number one golf operator in Japan and has a stabilised portfolio of some 26 golf courses available for acquisition. AGT’s target is to acquire 50bn yen worth of golf courses by end-Mar 17.
- Its loan-to-valuation (LTV) ratio currently stands at 28.9%. The maximum LTV ratio that AGT can leverage up to is 60.0%.
Operates only in Japan
- AGT derives all its revenue and expenses in Japan in JPY. Its debts are also entirely denominated in yen. About 81% of its debts have been swapped into fixed rates. AGT’s average effective interest rate is 3.40% per annum. There are three term loans maturing in Aug 17, Aug 18 and Aug 19, respectively.
Risks highlighted by AGT
- Other than the exchange rate translation risk from yen into S$ for the dividend distributions, the other key risks highlighted by AGT include
- poor weather which affects revenue,
- ownership, registration and land-related issues, and
- lack of organic growth opportunities.
William TNG
CIMB Securities
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http://research.itradecimb.com/
2015-09-17
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