in Blog, Reits, Stocks, 0 comments

EC World Reit – Throwing a spanner in the works

by Augustine // January 12, 2023  

”

Looking for a trusted Stock Remisier?
Augustine works closely with a small group of clients - providing regular market updates, Bazi & astrology wealth insights, and clear guidance to invest with confidence.

📩 Check out my profile here today!

Excerpts from DBS Group Research report

EC World Reit (SGX: BWCU)

  • EC World Reit (ECWREIT) divestments to face potential delay with Purchaser’s failure to obtain Transaction Financing
  • A delay in divestment  to refinance expiring loans
  • Worst case scenario a termination of the divestment and a need for equity fund raising
Downgrade to FULLY VALUED on uncertainties surrounding ECWREIT; lower TP of S$0.40

Fresh doubts cast on its ability to refinance loans

It was recently announced that the proposed divestments of two of its assets may potentially be delayed. A delay in the divestments could lead to a breach by ECWREIT’s lenders to refinance both offshore and onshore loans due on 30 April 2023. We have adjusted our TP and recommendation to account for this uncertainty.

Will the proposed divestment to sponsor pass the shareholder test?

With the manager entering into an MOU with the sponsor for the sale of two assets totalling about S$432.8m (at last valuation), funds received by the REIT will be more than sufficient to pare down its loans (25% by endDec 22) and pay a special dividend to unitholders. Given that it’s an interested party transaction (IPT), we envision unitholders only accepting a deal that is valued close to NAV.

Inherent organic growth in the portfolio underpinned by master leases

Rental escalations ranging from 1.0% to 2.5% built into its master leases ensures organic growth in ECWREIT’s earnings. Moreover, multi-tenanted assets that cater to the fast-growing logistics industry also have the potential to deliver revenue growth.

Valuation/Recommendation

Our TP of S$0.40 is based on a DCF valuation and considers ECWREIT’s historical P/NAV multiple and risks arising from uncertainties in refinancing outstanding loans.  
EC World Reit share price chart
You can find the full report here and the company website here  
 Previous
Next

About the author Augustine

Be A Valued Client of Augustine in Lim&Tan Securities
Receive Augustine’s regular stock updates via Telegram plus full access to his private client hub with exclusive research, astrology and Bazi insights.
(Exclusive Readings for Clients Only)

Leave a Comment

Check Out Our Latest Articles

DBS Group – A Bazi Analysis

Many investors would have known about DBS Group Investors would have make decent gains as the share price has been rising for the past few years. In fact, investors would have gain a total return of 131.93% excluding dividends received if he purchased the share 5 years ago! Many investors would already know about the

Read More

Apple Stock Analysis: Using Fundamentals and Bazi

This is an in depth analysis on Apple stock both using Fundamental and Bazi analysis. Apple remains a cash-generative, platform-centric technology leader with a resilient earnings mix. In fiscal Q4 2025 Apple posted revenue of $102.5 billion and non-GAAP EPS of $1.85, driven by a strong iPhone cycle and record Services revenue. That result reinforced

Read More

3 SGX High Yield Small Cap Dividend Stocks to Watch

Looking for SGX high yield small cap dividend stocks that offer strong passive income potential without relying only on large-cap blue chips or REITs? In Singapore, most dividend investors immediately turn to banks, REITs or government-linked companies for stability, but there are smaller gems that may offer attractive yields while still operating solid business models.

Read More