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Last year I started to buy # 0823. Gradually it becomes my major holding. Originally I was parking my money to a safe stock due to the market situations. Now it becomes my major holding, so I have to convince myself if it is a right choice. Thus I start to develop the theory for this stock.
The growth of REIT shall be coming from:
1. Economy growth
2. The improvement of the quality of their asset by attracting more customers for their tenants.
3. Replace their tenants by more efficent/willing-to-paid/profitable ones.
4. Asset injection or acquistion.
Due to historical reasons, # 0823 has a big room of improvement for point 2 and 3 (unlike other REIT that they have been dressing up before listing). Not until the gap of these points are closed and fully matching the market standard. Before the balance point is reached, # 0823′s growth will be stronger than the rest in the sector.
Also, the quality of REIT in Hong Kong tends to be low as it is a traditional tools for the major shareholders to inject average asset. The performance of the REIT in the first few years of listing is made up by financial arrangement to support a higher valuation for IPO. # 0823 is not playing this game and more trustful.
# 0823 is also the ultimate beneficiaries for the recent lowest wage policy and low unemployment rate. It is expected the coming new government will push more policy for the lowest income tiers which will indirectly benefit # 0823.