share offer, page-18

Yes ATA that's right. Although high gearing, its rated well as it has certainty of income because it's a monopoly, unlike property trusts for example with vacancy risk. But there are reasons to be careful here imo.

The income is regulated and "reset" each 4 years or so. The regulator looks through their figures with a fine tooth comb over a period of months, then picks some numbers that it decides they will be paid. The regulator basically doesn't want them making large profits but wants them to keep them safely providing the service to the community.

The companies usually get a rude shock from the draft decision, then appeal etc, to maybe get a slight improvement. So this is an ongoing game. This is probably why Singapore Power sold half at 1.40 a few years back. The stock has been in a steady downtrend since.

imo you will get your 10% next year but they already warned in the latest prospectus that the year after will be reviewed. The question is that in the future do you think the regulator is going to tend to be generous to a half foreign owned company, or tend to try and keep utility bills down for all the "battlers". I hope I'm not sounding like a wet blanket but analysing this company is very hard because it's profit lies in the hands of the govt regulator. I don't trust govts, especially in these times.