Investing in the Japan Astro Property Group
23/02/16 closing share price: $5.400
52 week high: $5.550
Most recent dividend: 18c Annual dividend yield: 6.39% Franking: 0%
Management recently reiterated its guidance for a distribution of 17.5 cents per share in the first half of 2016. While this is positive, we believe management could still deliver better than expected full-year earnings guidance at the upcoming interim results. The likely catalyst for this would be the recent strength in the Japanese Yen, which has the potential to boost management's current expectations for underlying net profit growth of 5-6% in the 2016 financial year to something closer to 12-15%.
Astro Japan Property Group is currently trading at a circa 30% discount to its prospective net tangible assets and that of its peer group. While foreign currency translation risks do complicate the investment case, they are currently adding to the positive momentum evident in Astro Japan Property Group's property portfolio.
James Lennon is a Senior Analyst at investment research and funds management house Fat Prophets.
Disclosure: Astro Japan Property Group is held in the Fat Prophets Australian Share Income and Small & Mid-Cap models.