Sasseur REIT exceeds IPO forecast for FY18, is it a good time to invest?

Hi,

To guage whether the company is good to purchase is not by how they exceed IPO forecast but rather the fundamental of the company and the valuation you are paying.

Here are some of the questions you may want to ask yourself:

1. What property so they own?
2. Are they prime property?
3. How long is their rental lease?
4. Can they increase the rental with inflation?
5. What is the finanical health of the company?
6. What is their valuation to their NAV?
7. Are their property price inflated or understated?
8. What is their property yield?

Sasseur REIT indeed beat forecasts for FY18 by 28.1%.

A few key numbers to consider is its NAV increased by 12.9% to $0.9 from the current share price of $0.73 and its gearing ratio decreased from 36% to 29%. It's easy to be attracted to the rising NAV but if we look closely, this increase in valuation comes from their one mall which contributes 70% of NPI (over-contribution of the ChongQing Mall). This could possible explain why its trading below its book value. On this note, the main risk of investing in Sasseur REIT is the trustworthiness of accounting practices by a chinese company. If I were to invest in, I would demand a higher risk premium since cashflow depends heavily on one asset.