Today, I divested all my shares in Global Logistic Properties, a warehousing provider in China.
I bought into it as an asset play (very undervalued based on its book value) in November 2016 at SGD 2.05, although I also think that it has a very good business model and earnings power.
At that point of time, my investing thesis was very simple, based on book value (after consideration of the quality of its assets and impact of potential impairment – see GLP – Presentation dated 24 November 2016), and I valued it to be worth at least SGD 2.65 (based on 1x NAV).
Since then, it received a take-private offer of SGD 3.38 from a buyer group (including its CEO and others). In view of the limited potential upside (about 4% for a period of about 7 months – the deal is expected to completed by April 2018) from the current share price, I decided to sell off all my shares (1,500 shares) at SGD 3.25 today, therefore giving me a return of about 60% (including dividends) in 10 months.
Besides that, I am also getting wary of the general rich valuation of assets across the world (especially US) and would like to hold more cash in my portfolio.
As a side note, I have also examined briefly GLP’s competitor, US-listed Prologis, which is the largest warehousing provider in the world, but was put off by its rich valuations. I might revisit it as a replacement for GLP in the future if its price comes down significantly.