Why KIT?

$KEPPEL INFRA TRUST WEF 2015(A7RU.SI)$

Why Invest in KIT?

 •Yield = 6.8% @ $0.545

 • Stable Distribution, Payout twice a year

 • FCFE > DPU

What Do They Do?

 • Infrastructure like Power, Gas & Water, mostly government concessions for fixed terms & profit margins.

 • Recent acquisitions provide diversification into non-concession based business.

Very Scary, Huge Losses in FY20!!

 • They're asset heavy, Depreciation Expenses are very hefty & Net Losses in their Income statements are not unexpected.

 • As KIT is a Business Trust & are allowed to pay out 100% of available cash flow, we should look at FCF (Free Cash Flow) instead,

 • FCF = OCF - CAPEX

More importantly, we're more interested in DCF (Distributable Cash Flow), which KIT now calls FCFE,

Huge Numbers BUT How Much is that to Me?

 • For FY20, FCFE = 4.52ct / Unit > DPU 3.72ct

 • Basslink FCFE Not Used for DPU Payout

Big Fine @ Basslink, Very Scary!!

 • Yes, A$38.5m or S$0.008/Unit

 • IMO, unlikely to affect DPU as FY20 FCFE is more than enough + Basslink FCFE

 • Potential Upside if they Decide to Sell Basslink (Just Before the Tasmanian Issue, KIT was in Discussions with Potential Buyers)

Anything to Keep Me Awake at Night?

 • The Concession-based businesses, with the first expiry in 2024.

 • Although there's a good chance it'll get renewed, nothing is set in stone.

 • Recent diversification into non-concession based assets ought to provide some cushion (in case of non-renewal of concessions).

Is KIT Good for Trading?

• Sorry! You'll Either Die from Hunger or Die from Boredom.

 • On Both the Buy & Sell Qs, they're usually Millions in Q. Daily Fluctuations Usually within ONE Bid.

Any Last Words

 • The Usual, DYODD!

 • Yes, it's Raining AGAIN!! [黑眼圈]