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What Investors Should Know About EC World Real Estate Investment Trust’s Latest Earnings and Valuation

EC World Real Estate Investment Trust (SGX: BWCU) is the first China-focused logistics REIT in Singapore’s stock market. It was listed in July 2016 and owns six properties in China that are mainly used for e-commerce, supply-chain management, and logistics purposes.

There are two things about EC World REIT that investors may want to know about right now: Its latest financial performance and valuation.

Financial performance

Here’s a table showing important items from EC World REIT’s actual financial performance for the second quarter of 2017, and the forecast given in its IPO prospectus for the same period:


Source:
EC World REIT 2017 second quarter earnings presentation

We can see that EC World REIT delivered a better performance in the second quarter of 2017 as compared to its forecast.

The better-than-expected net property income was driven by a strong operating performance from the REIT’s underlying asset portfolio, and lower finance costs and other trust expenses.

The REIT also achieved a committed occupancy rate of 100% as at 30 June 2017.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows EC World REIT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 39 REITs that are in Singapore’s stock market.


Source: S&P Global Market Intelligence

We can see that EC World REIT is trading at a discount to the market average given its low PB ratio and higher distribution yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.