Dividend Magic

Saving and Investing towards Financial Independence in Malaysia

Dividends

Malaysian REITs and their Tax Treatment

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Filed Under: Dividends 21

Malaysian REITs

Special Tax Treatment of Malaysian REITs

The taxation of a Real Estate Investment Trust (REIT) in Malaysia depends on the amount of income that is distributed to shareholders.

Two different important conditions affect a Malaysian REITs’ tax treatment:

  1. If a Malaysian REIT distributes at least 90% of its taxable income, it will not be subject to corporate income tax;
  2. If the 90% threshold is not met, the REIT would be subjected to the prevailing corporate tax of 24%.

As such, Malaysian REITs generally always pay out at least 90% of its taxable income in dividends. And as a dividend investor, REITs are especially attractive to me and feature heavily in my portfolio.

Tax Credits for Resident Shareholders

I’ve received numerous queries regarding a REIT’s withholding tax as well as tax credits applicable to resident Malaysian unit holders. Firstly, you have to be a tax resident for any tax credits to be applicable.

The withholding tax is a final tax and it comes into play when Malaysian REITs reach that 90% threshold in distribution (Condition 1 above). Individuals and non-corporate investors are not required to declare REIT dividend income in their tax filing/returns. And no, you have no tax credits to claim if the REIT doesn’t pay any corporate tax. Distribution made to shareholders will only be subjected to a final withholding tax. For residents and individuals, that rate is 10%.

So when do you get tax credits? When Condition 2 is in effect and the REIT doesn’t meet the 90% payout requirement.  This is when you are allowed to set off those tax credits against your own payable tax. However, a REIT almost always pays out at least 90% of their income (this is when tax transparency is achieved) to take advantage and not pay any corporate tax.

End.

So, the short answer to whether or not we as individual investors are entitled to tax credits: almost (99%) never. No sensible REIT manager would miss out on the huge corporate tax cut.

I would actually like some feedback from you guys if you know of any Malaysian REITs that have opted not to distribute that 90% income. 

For a more comprehensive understanding of Malaysian REITs, please divert yourself to The Complete Guide to REITs in Malaysia.

 

Investing in AirAsia – Now Everyone Can Fly

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Filed Under: Dividends, Companies in the News 0

Update: 2024

AirAsia, a prominent Malaysian low-cost airline, has demonstrated significant growth and resilience in recent years. As of 2023, the airline reported a revenue of approximately RM14.69 billion, a substantial increase from RM6.44 billion in 2022.

This growth reflects a strong recovery in passenger demand and strategic operational enhancements.

In the fourth quarter of 2023, AirAsia’s parent company, Capital A Berhad, reported a revenue of RM4.2 billion and an EBITDA of RM448 million, indicating impressive year-on-year increases of 153% and 384%, respectively.

This performance underscores the company’s effective strategies in navigating the post-pandemic aviation landscape.

AirAsia X, the long-haul subsidiary of AirAsia, also reported robust financial results. For the full year 2023, the company achieved a revenue of RM2.5 billion and a net profit of RM366.5 million, attributed to the recovery of its scheduled passenger flight operations and significant improvements in ancillary income.

As of December 2023, AirAsia X maintained a core fleet of 18 A330-300 aircraft, with its associate, Thai AirAsia X, operating an additional eight A330-300 aircraft.

This fleet supports a network spanning various destinations across Asia and Australia, contributing to the airline’s extensive reach.

In recognition of its service excellence, AirAsia was named the World’s Best Low-Cost Airline by Skytrax for the 15th consecutive year in 2024.

This accolade reflects the airline’s commitment to providing affordable and quality air travel.

Looking ahead, AirAsia continues to expand its services and network. In December 2024, the airline launched fixed fares to reunite Malaysians for the upcoming Lunar New Year celebration in January 2025, demonstrating its dedication to meeting customer needs during festive seasons.

Overall, AirAsia’s financial performance and strategic initiatives indicate a positive trajectory, reinforcing its position as a leading low-cost carrier in the region.

Update : 2019

AirAsia – The Pride of Malaysia

AirAsia Special Dividend

We’ve really got a gem of a company to be proud of right here in Malaysia. AirAsia has been voted World’s Best Low-Cost Airline for 8 years running and the company is dominating the skies with their exceptionally low fares and unmatched talent displayed by the management.

How it all started

Established in 1993, AirAsia was founded first by DRB-Hicom. You’ve all heard the tale of how Tony Fernandes purchased the airline for RM1. Here’s how it happened: On 2 December 2001, the almost bankrupt airline was purchased for a token sum of RM1 WITH RM40 million worth of debts. Within just one year,  Fernandes managed to turn the company around, producing a profit in 2002.

With all sorts of promotional fares, some as low as RM1, AirAsia managed to eat into former monopoly airline MAS. Malaysia Airlines will eventually decline to the point where they delisted from the KLSE. Fast forward to 2008, the company added a whopping 106 new routes to its list of 60. As they say, the rest is history. AirAsia is now an RM10 billion company with huge, HUGE growth potential.

AirAsia Annual Report 2016

Financial highlights

The airline reported an RM6.846 billion revenue and RM2 billion profit after tax in 2016. Shareholders’ equity also increased to RM6.628 billion. The company has also significantly reduced its net debt to just under the RM8 billion mark. This is an immense sum but it is typical in the airline industry.

Another key factor is the airline’s growth in passengers and it’s capacity every single year, maxing out at a total of 26 million passengers and a 30 million capacity in 2016.

AirAsia has one of the most interesting and engaging annual reports out there. Give it a read: AirAsia Annual Report 2016

AirAsia’s Special Dividend?

[UPDATE] 23 February 2017 – RM2.70
AirAsia Tony Fernandes

There has been a frenzy over AirAsia the past few days due to the potential special dividend that will be declared.

Market experts predict the special dividend to range from RM0.50 to RM1.10 per share. The most recent information is that it could be as high as RM1.50 per share. That’s a 50% dividend yield based on the current market price. The one-time special dividend comes from the sale of an 80% stake in Asia Aviation Capital (AAC) which is said to garner a valuation of at least RM3.5 billion.

Want more good news? With my analysis, and excluding this special dividend, AirAsia underlying value is roughly RM2.90 per share. Another food for thought, as of last month, CEO Tony Fernandes and Kamarudin Meranun have both raised their combined stake of 32.3% in the company which was largely funded by loans. I believe they will declare a large amount in the form of special dividends which would enable them to settle the aforementioned loans.

That being said, there are of course the ever hovering external risks associated with airlines ie. jet fuel prices and airport charges. Let’s not forget our weak Ringgit and the competition from MAS and Malindo.

Previously, I sold my AA shares at RM2.95, making a handsome 79% gain in the process.

AirAsia to Establish LCC in China

[UPDATE] 15 May 2017 – RM3.40
AirAsia China JV

AirAsia Bhd has signed a memorandum of understanding (MoU) with China Everbright Group and Henan Government Working Group to establish a low-cost carrier (LCC) in China.

It outlines how the parties will incorporate a joint-venture to be known as AirAsia (China) for the purposes of operating a low-cost aviation business based in Zhengzhou, the capital of Henan province in central China.

In addition, AirAsia (China) will invest in aviation infrastructure, including a dedicated LCC terminal at Zhengzhou airport and an aviation academy to train pilots, crew and engineers, as well as maintenance, repair and overhaul (MRO) facilities to service aircraft.

The MoU was exchanged between AirAsia Group Chief Executive Officer, Tan Sri Tony Fernandes, Everbright Financial Investment Holding Executive Director and President, Wang Weifeng and Henan Airport Group General Manager, Li Weidong at China World Hotel here on Sunday.

The ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Razak who is on a five-day working visit to China.

AirAsia was the first foreign LCC to enter China and has carried more than 40 million guests since its inaugural route to China in April 2005. AirAsia and AirAsia X currently fly to 15 destinations in China and is the largest foreign LCC operating into the country.

(Bernama)

This is huge news for AirAsia and will translate to a big slice of the pie in China’s aviation market for the company if the deal materializes. China has 1.37 billion vs Malaysia’s 30 million. Malaysia is only 2% of China. Think of the possibilities!

With this latest piece of good news, I’m pretty sure the counter will go past the RM3.50 per share mark. Please be aware that the deal has yet to materialize and even if it does, it’ll be a few years before it adds to the company’s bottom line. But again! Think of the possibilities and growth potential AirAsia has. We’ve conquered ASEAN and we’re establishing ourselves and gaining a strong foothold in the world’s most populous nation.

AirAsia is looking to become one of THE long term stocks to hold on to.

AirAsia’s Special Dividends

[UPDATE] 29 August 2019 – RM1.75

Tony Fernandes and gang have so far declared and paid out two rounds of special dividends during my tenure so far as an AirAsia shareholder.

Round 1 – 28 December 2018

The first round was back in December 2018.

The company declared a 40 sen dividend per share and I received a total of RM5,320 in dividend income then.

Round 2 – 29 August 2019

This year, AirAsia again declared 90 sen in dividend per share. Giving me a total of RM11,970.

Total AirAsia Special Dividends

In total, I’ve received RM17,290 in special dividends from the airline.

Total dividends received – RM22,462.00
Gross Investment – RM41,481.37

That’s about 54% of my capital back in my pocket in dividends alone. The average bought price for me, however, is at RM3.1189, today it is at RM1.75. That’s a 43% drop.

End.

In pure numbers, AirAsia is still positive in the Freedom Fund.

Can’t wait to see where the budget airline goes from here. I am especially excited about its role in the logistics industry.

As always, invest at your own risk.

A Review of 2016

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Filed Under: Dividends 26

The Year 2016

I achieved a huge milestone during the year 2016. For the first time ever, my annual dividends surpassed the RM10,000 mark.

As most already know, I received a total of RM11,429.55 in dividends last year giving me a yield of 3.84%. In 2015, I received RM7,544.14 in dividends. Guess what? That’s a whopping 51% increase in passive income for me!

That being said, I did increase my gross investments by RM43K.

No.StockQuantityGross Investment (RM)Dividends (RM)Div. Yield
1AXREIT1423624,313.661,049.064.31%
2BONIA3370026,990.33421.251.56%
3CBIP1400022,304.801,280.005.74%
4CYPARK820017,681.66410.002.32%
5ECOWLD900012,960.00--
6HOMERIZ2445014,127.211,100.757.79%
7IGB REIT2280029,986.561,673.075.58%
8MAYBANK316825,723.211,070.004.16%
9NESTLE20013,376.00540.004.04%
10PBBANK60011,100.00156.001.41%
11SCICOM840017,472.00168.000.96%
12SCIENTX380022,267.24950.004.27%
13SUNCON360586.8023.404.06%
14SUNREIT1360019,839.681,172.025.91%
15SUNWAY360011,264.04396.003.52%
16TAANN26009,282.00130.001.40%
17TUNEPRO1080018,503.64540.002.92%
18SOLD STOCKS (Air Asia & AFG)350.50
297,778.8311,429.553.84%

Capital Gains & Dividend Payout

Dividend Magic - Capital Gains

Gross Investment: RM297,777.83
Market Value: RM345,955.92
Dividends (2016): RM11,429.55
Total Gain: 14.69%

For 2016, the unrealized gain for my Freedom Fund was RM41,416.19 giving me a 10.85% yield. Couple that with my 3.84% dividend yield, total gains for 2016 totals up to 14.69%. Total market value of my portfolio now is RM345,955.92.

The year 2016 has been pretty awesome if I do say so myself. However, my main focus has and will always be on that 3.84% dividend yield. My main aim is to increase that yield every year.

REITs

Last year in terms of dividend payments, all the REITs did well for me. The top ones would still be Sunway REIT as well as IGB REIT for me. Somewhat of a disappointment would be Axis REIT but their refurbished properties should be bringing in higher income in 2017.

Banks

My purchase of Maybank as well as Public Bank has been fruitful. They’ve each given me a 4.16% and 1.41% yield respectively. (Public Bank’s is low here because I only received 1 dividend payment).

I also disposed of Alliance Bank’s shares in December as the shares have had a lackluster few years and I don’t see any changes being made. I took a painful 16% loss on that. The funds will be put to better use.

My Favourites

Homeriz and Scientax, the two golden eggs in my basket have been providing not only in the form of dividends but in capital gains as well. Scientax has continued to soar in 2016, as of today (8 Jan 2017), I have an unrealized gain of 130%.

Disappointments

Thankfully, last year the only major disappointment came from none other than Bonia Corp. I was previously up by more than 100% but currently making a loss of 22%. I’ll continue to maintain my position with Bonia because they do have sound management and I foresee a big increase in sales in the next few years. It might be time to top up early this year to average down.

Goals for 2017

Moving forward, 2017 will be the year I achieve RM12,000 in dividends. Even without adding to my portfolio, the magic of compounding will see me achieve that target. And I’m sure everyone knows what RM12K a year in dividends mean.

Yes! That’s an average of RM1,000 cash for me. It has always been a long term goal of mine and finally it is within grasp.

With additional funds being reinvested, I hope to achieve RM15,000 in dividends next year while at least maintaining my 3.84% yield. Hopefully increasing it to 4%? A long shot I know.

4% Dividend Yield

That coveted 4% yield. I’ll be focusing more on REITs this year whose high yields will help me achieve this target.

For the readers

For you guys and girls, I’d like those of you that hasn’t started investing to make it a point to do so this year. The first step is always the hardest but let me assure you it will be rewarding. Let 2017 be the year you get your finances in order.

I’m here to assist you. If you have any questions, no matter how trivial you feel they are, please fire away!

End.

So here’s to an awesome 2017 to everyone! Onwards and upwards!

Thanks for reading!

Dividend Magic - We can do it!

 

Dividend Income Update 2016

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Filed Under: Dividends 7

A list of my past dividend income and updates can be found below:

December

2016 Dividend Income

First off, the Freedom Fund has been updated as of 31 December 2016. The full list of dividend yields from my share holdings can be viewed there.

Last month, I hit RM10K in dividend income for the year. For the last month of the year, I added another RM1,037.75, bringing the grand total for the year to RM11,429.55. The total has been adjusted slightly due to a slight miscalculation on my part. Would have liked the total to hit RM12K but it fell short. Having RM12K in dividends would’ve meant I was receiving RM1K exactly in passive income every month.

We shall start off with the dividends received in December and then move on to the year 2016 as a whole in my next post. So bear with me.

Nestle Malaysia

December Dividends – RM140.00

Total 2016 Dividends – RM540.00

Dividend Yield – 4.04%

Weight – 4.47% of the Freedom Fund

Scicom Bhd

December Dividends – RM168.00

Total 2016 Dividends – RM168.00

Dividend Yield – 0.96%

Weight – 5.16% of the Freedom Fund

I’ve been looking at Scicom for about a year and I purchased the company’s shares back in October 2016 at RM2.08 per share.  Their dividend yield of 0.96% doesn’t reflect the full year’s as I bought the shares only in October.

Bonia Corp

December Dividends – RM421.25

Total 2016 Dividends – RM421.25

Dividend Yield – 1.56%

Weight – 5.55% of the Freedom Fund

TAANN Holdings

December Dividends – RM130.00

Total 2016 Dividends – RM130.00

Dividend Yield – 1.40%

Weight – 2.88% of the Freedom Fund

As with Scicom, the dividend yield for Ta Ann only takes into account the dividends received this month.

End.

Total dividends received for the year 2016 is RM11,429.55. That’s the final number, the dividend yield – 3.84%.

Some may consider this low but don’t forget I have yet to factor in my capital gains. So come back in a few days for a grand summary of the year 2016.

Thanks for reading! 

November

sticker-anonymous-visage

Remember remember, the 5th of November! The 11th month of the year is usually a quiet occasion for me as a dividend income investor. However, there is cause for celebration this November because it is official – I’ve finally hit RM10K in dividend income for 2016.

RM10,531.80 to be exact.

I received a total of RM547.48 from both Axis REIT and Sunway REIT the past month.

Axis REIT

November Dividends – RM263.65

Total 2016 Dividends – RM1,049.06

Dividend Yield – 4.31%

Weight – 6.78% of the Freedom Fund

Axis REIT netted me RM263.65 in November, bringing the grand total for the year to RM1,049.06.

The dividend yield for Axis REIT for 2016 was a pretty disappointing 4.31% for me. Axis hasn’t been doing too well especially last year as they had to refurbish some of their old properties. Hopefully, the long term benefits start rolling in now.

Sunway REIT

November Dividends – RM283.83

Total 2016 Dividends – RM1,172.02

Dividend Yield – 5.91%

Weight – 6.72% of the Freedom Fund

The next contributor to my November dividends is Sunway REIT, bringing in RM 283.83. The total annual dividends came up to RM1,172.02. SunREIT’s dividend yield is at a much more commendable rate compared to Axis’ at 5.91% for me this year.

The REIT has been acquiring strategic properties the past years and will definitely continue to perform.

My average purchase price of SunREIT is at RM1.46 with my purchases over the years. I’ve been looking at ‘investors’ discussing the share price recently as it increased about how they are making 1-2% gains buying and selling (speculating). What they don’t mention is the time’s they’ve lost with this method. It really cheeses me off when people brag about the good times they’re having but when the share price falls, you don’t hear a thing from them. I’m here to show that long term value investing will pay off in the long run, at RM1.72 now, I’m up by 18%!

End.

Total dividends for the year currently stands at 3.45%. I consider this a little on the low side as our risk free rate is around 4% this year. We shall see what the last month of 2016 brings in and strategize accordingly.

RM10,531.80 everyone! I’m going to relax and let that sink in over the weekend.

Sekian terima kasih. Thanks for reading!

October

Happy Halloween! It might have been fright night with costumes for some of you. Or perhaps like me, you spent your Halloween at a small party at a close friend’s house. Whichever it is, with dividend income investing, your dividends trickle in no matter what. It really feels good to be able to sum up your dividends at the end of the month and watch your hardworking money work for you.

Without further ado, my October dividend update: RM800

The companies that contributed to this RM800 are only two: Malayan Banking Berhad (better known as Maybank) and Sunway Berhad.

Malayan Banking Berhad – Dividend Income

As mentioned in my earlier post, I opted to forego my dividends from Maybank and instead traded it for shares. This is known as a dividend reinvestment plan. Through the DRP, I received 68 units of Maybank shares and the remaining RM127. However for yield calculation, we will just say I received RM620 in dividends.

Since my last post on Maybank, I’ve added quite a bit to more to my portfolio. My average purchase price is now RM8.12, market price is at RM7.81.

Yes I am currently making a loss with Maybank. However, I still believe in the bank and will continue to purchase more shares should it drop further. The total dividends received from Maybank currently stands at RM1,070 giving me a yield of 4.16%. Here’s to a better 4Q and 2017 moving forward.

Sunway Berhad – Dividend Income

From the conglomerate that is Sunway Berhad, I received RM180 for October 2016. The dividends received in 2016 and 2015 stayed the same (not taking into account the one-time special dividend received last year). This is actually good news because Sunway Berhad actually listed their construction arm last year and this would’ve led to some loss in revenue.

Total dividends received for the year is RM396 translating to a 3.52% yield.

End.

I have no plans to dispose of any shares in both Maybank and Sunway. If the opportunity presents itself, I might even find myself adding shares to my portfolio.

As of now, the total dividends received in the year 2016 stands at RM9,844.32. My dividend yield comes in at 3.22%. I am 99% certain that I’ll be able to achieve RM10,000 in dividends this year. Maybe even RM12K, which would give me an average of RM1,000 a month.

As always, thank you for reading and for all your support. Onwards and upwards!

September

First and foremost, I’m delighted to report that I’ve officially achieved my 2016 goal of RM8,500 in dividend income. I’ve raked in a total of RM9,044.32 this year from dividend income alone. In fact, it is entirely possible that I may be able to shatter the RM10,000 mark this year. I’ll keep my fingers crossed.

The total dividend income received for the month of September crossed the one thousand ringgit mark at RM1,172.15. The five companies that generously contributed to this amount are: Axis REIT, Sunway REIT, Homeriz, Sunway Construction and Nestle. Their individual amount and yields for the year so far are as below:

Axis REIT – RM263.65 (3.23% yield)

SunREIT – RM270.50 (4.48% yield)

Homeriz – RM489.00 (7.79% yield)

SunCon – RM9.00 (4.61% yield)

Nestle – RM140.00 (2.99% yield)

Unfortunately I’m unable to get to my mail the past few weeks so the relevant pics will be updated in due time. I know some of you can’t wait to see more of my Iron Man collection but please bear with me (Yes there are several more models to be revealed!).

Moving onto the total yield of my Freedom Fund – Total dividend yield for the year stands at 3.14%! Yes we’ve yet again crossed an important milestone – the 3% fixed deposit mark. I know some of you may argue that FDs under promotion offers way higher interest rates, but lets agree to stick to 3% shall we?

How is the Freedom Fund doing so far?

With it being the third quarter and all, I guess I should let everyone know that the Freedom Fund is doing good. For the year so far, unrealized capital gains of the portfolio stand at 9.75%. This preliminary figure is pretty good considering the volatile year we’ve had so far. With the end of 2016 so close, I will hope for a good 4th and final quarter to conclude the year. There will be a more comprehensive summary come December.

Thanks for reading.

P.S. A good number of you have reached out to me on financial planning since my last post. I would like to offer my apologies to some of you whom I’m unable to meet yet due to my schedule. Hope to meet up with you guys soon over the next few weeks!

August & July

First of all, my apologies again for missing the dividend income update for the month of July. Now, on to more important matters.

I received a total of RM1,938.99 in dividend income for both July and August, as detailed below:

July

CBIP – RM420.00 (5.74% yield)

August

Scientex – RM456.00 (8.53% yield)

PBBank – RM156.00 (1.41% yield)

IGB REIT – RM906.99 (5.58% yield)

*Note that at the time of purchase, PBBank shares had already paid out their first trench of dividends.

Final Dividends

This will be the final dividend paid by all the companies mentioned above for 2016. I’m pretty satisfied with the yields from all 4 companies. Hope to see them continue to grow in the coming years and see my yields increase as the share price go up.

Also, I’m currently waiting on more opportunities to add Scientex and more REITs to my Freedom Fund.

Some Short Term Gain

In August, I’ve also been busy making some quick profit from the market. As most of you know, I’m mostly a long term investor and have generally stuck to my principles. However, I’ve been known to dabble in short term investing ie. trading when I’ve done my due diligence and research. I’ve made a RM900 or 13% gain in a short span of 6 days by trading in DESTINI.

I will not encourage average investors to pursue this highly risky branch of investing without first knowing everything about it and then some. So, with this trade, I’ve added an additional RM900 to my war chest which I hope to make use of in the near future.

Conclusion

Total dividends received currently stands at RM7,872.17 with a yield of 2.74%.

As an early comparison between 2016 and 2015’s dividend yields, I’ve already surpassed last year’s dividend yield of 2.7%. Looking forward to a bountiful final 4 months of 2016.

Finally, I hope everyone’s investments have been doing well and continue to. Thanks for reading, Cheers!

PS: I’ve been away from home for a bit and therefore haven’t had the chance to snap the dividend voucher from IGB REIT. Will be adding them when I get back.

June – Half Year Report

June, marking the first half of the year 2016 has come and gone. The year 2016 has seen its ups and downs but overall, it has been good to me. With that, I present to you the dividend update of my Freedom Fund so far. I will be trying my best to update the page every quarter so bookmark that and drop by from time to time to follow my progress.

No.StockQuantityGross Investment (RM)Dividends (RM)Div. Yield
1AXREIT1423624,313.661,049.064.31%
2BONIA3370026,990.33421.251.56%
3CBIP1400022,304.801,280.005.74%
4CYPARK820017,681.66410.002.32%
5ECOWLD900012,960.00--
6HOMERIZ2445014,127.211,100.757.79%
7IGB REIT2280029,986.561,673.075.58%
8MAYBANK316825,723.211,070.004.16%
9NESTLE20013,376.00540.004.04%
10PBBANK60011,100.00156.001.41%
11SCICOM840017,472.00168.000.96%
12SCIENTX380022,267.24950.004.27%
13SUNCON360586.8023.404.06%
14SUNREIT1360019,839.681,172.025.91%
15SUNWAY360011,264.04396.003.52%
16TAANN26009,282.00130.001.40%
17TUNEPRO1080018,503.64540.002.92%
18SOLD STOCKS (Air Asia & AFG)350.50
297,778.8311,429.553.84%

If you would recall, I set myself a goal of RM8,500 in dividends this year. So far, at the half year mark, I’ve received a total of RM5,933.18 in dividends, this represents close to 70% of my target. Now that doesn’t necessarily means I’m certain to achieve my target this year because different companies pay dividends at different times of the year. However, based on historical data, I should be able to surpass my goal and then some.

I invested a total of RM274,340.82, my portfolio is now worth a little over RM321K. Dividends received as at June 2016 stands at RM5,933.18, giving me a yield of 2.16% so far.

Thank you 2016!

I leave you with this: Investing is a long term game and I hope I’ve shown most people out there that it can be a very rewarding venture. Most may say the 16-17% gains I’ve made over the course of 3 years isn’t much, which I will agree, but these gains are not inclusive of the dividends I’ve received over the years as well.

Thanks for reading!

PS: I’ve decided that I will have a consolidated 5-year statement posted here when the time comes which will include all dividends received. So wait for it!

Dividend Update
Vintage image of Rosie the Riveter by J. Howard Miller. Courtesy National Museum of American History, Smithsonian Institution

June & May

If April was a slow month for dividends,  May is infinitely slower as I did not receive a single dividend. Hence my failure to procure a post for the month – more on that later.

June however, proved to be one of the most bountiful months so far with a total dividend of RM1,852.37.

Sunway REIT

The first company to hand out its dividends in June was Sunway REIT with RM297. This effectively brings SunREIT’s total dividend for the year to RM617.69, its yield currently stands at 3.11%.

I recently paid a visit to the newly refurbished Sunway Putra Mall in Kuala Lumpur and was happy with the new vibrant and colorful look. The mall is surrounded and jam packed with high rise apartment towers all around it, giving it a sort of permanent consumer base already. I look forward to the REIT performing superbly in the future, with shrewd and shareholder oriented decisions by the management.

Nestle Berhad

Nestle Malaysia paid out RM260 in dividends this time around, its first for the year 2016, bringing its yield to 1.94% for the year. The recent rise in consumer product stocks has seen Nestle become a really strong performer in my portfolio.

I’ve held this stock for 2 years now and it has been rising steadily even managing to maneuver itself past certain crippling events such as the implementation of GST. The goody bags given out by the company every year to shareholders is something I look forward to every year. Nestle will be the blue chip dividend producing defense I will continue to rely on in the coming years.

*Note: The dividend vouchers from both SunREIT and Nestle did not arrive by mail unfortunately and I fear it may be lost in transition.

Maybank

Maybank paid me RM450 in dividends, bringing the yield to 3.61%. I missed out on the company’s earlier dividends this year which would’ve brought my yield for the year to 5-6% easily.

Dear readers, this is a great example of why one should be investing in shares of solid companies. I know most of you are placing your funds into fixed deposits which gives you a yield of what? 3%? 3.5%? Maybe topping out at 4.5% for those promo rates (which you don’t get every year and comes with tonnes of T&C). Instead, if you had invested in  company like Maybank when its shares dropped to a low, you’d get a cool 5-6% per annum.

Alright alright, I can already hear some of you muttering ‘but not all of us know when the shares are at a low’. Fine, let’s say you invest when the share prices are high, the yield would still be in the 3% region. And guess what? You get the potential that the stock will increase in price, giving you more gains.

I bought into Maybank earlier this year when the stock declined to RM8.3, it seemed a good decision for the next few months as I saw the stock climb past RM9. The company’s stock then fell to a low of RM8.1 of which I was really tempted to add more to portfolio, I am currently waiting for a bit before deciding. The current dividend yield (if maintained by the management) is very attractive.

Cypark Resources Berhad

Cypark handed me RM410 in dividends so far this year, giving me a yield of 2.32%. The company’s core business is a unique one and I liked its venture into the solar business last year. Will continue to hold onto this stock for the foreseeable future.

Axis REIT

I received RM263.37 from Axis REIT for June bringing the total dividends received this year from Axis to RM521.76 with a current yield of 2.15%. Nothing new with the company so far except its ongoing refurbishment of assets.

AirAsia Berhad

Air Asia, one of the most traded stock in Bursa for the past month has been making headlines for all the right reasons in June. I bought the stock at RM1.67 and its recent surge has made me a lot of money. The dividend paid out was a surprise as Air Asia was a company that retained most of its earnings for growth. The 2.41% yield came as a pleasant surprise for me.

Tune Protect

I received RM540 from Tune Protect this year, giving it a yield of 2.92%. The share has not been doing well an has been on a steady drop, not one of my best buys but I’m still holding on to the stock because of the huge potential it has in the travel insurance industry.

Conclusion

Total dividends for the year stands at RM5,933.18 giving me a 2.16% dividend yield so far. We are now halfway through the year and in my Review of 2015, I set myself a goal of RM8,500 in dividends this year. I hope to surpass that goal in the coming months.

I would like to apologize for the absence recently, as I’ve been busy with a new business venture which I will be posting about soon if all goes well. Thanks for reading!!

On an unrelated note, you may notice the new Celcom sim in my pictures. To answer your question – Yes I’ve made the jump to Celcom because of their awesome phone plans. I’ve also looked hard at Axiata as a company and maybe purchasing the stock soon.

April

April has been a slow month for dividend income compared to the first quarter of the year. I only received a total dividend of RM230.40 from two companies: Sunway Berhad (RM216) and Sunway Construction Group Berhad (RM14.40). The vouchers have yet to arrive by mail, will be updating this post with pictures when I receive them soon.

The same time last year, Sunway Berhad paid out the same amount of dividends, this is somewhat of a disappointment but not totally unexpected as their earnings have not increased significantly. They’ve also listed their construction arm recently, further diluting earnings from the holding company. So I guess I should count my blessings that there hasn’t been a reduction in dividends. With my gross investment of RM11,264.04 in Sunway Berhad, RM216 in dividends translates to a 1.92% return so far.  There will be another round of dividends in October to be declared in October later this year which should bump the return past 3% per annum.

As for Sunway Construction Group Berhad (“SunCon”), if you’ve been following my posts you’d know that I received a special dividend from Sunway Berhad together with 360 shares of SunCon back in July 2015. The company just got its order book replenished with various jobs in the country recently and should be doing very well in the future. I will be considering topping up soon if an opportunity arises.

Total dividends for the year stands at RM3,540.81 giving me a 1.29% dividend yield so far. We are only in April and in my Review of 2015, I set myself a goal of RM8,500 in dividends this year. I seem to be on track and maybe I’ll even surpass it. On that note, thanks for reading!

A side note: RM15,300 was added to my warchest on 13 April 2016. This figure will be reflected in the Freedom Fund when I update it in June.

March

The month of March this year is a bountiful one with a total of RM880.69 in dividend income from two companies – Sunway REIT and CBIP Holding Berhad. The end of March also marks the beginning of the second quarter for 2016, and as I’ve promised to update my portfolio – The Freedom Fund every quarter, I have duly done so. However, dividend growth updates will only come next year as 2016 will be the year where I organize the dividends received into months and its subsequent quarters.

Now, on to them dividends.

Compared to the dividends received in February 2016 which totaled RM1,635.72, March’s bounty doesn’t really come close at RM880.69. Moreover, the dividends received from CBIP Berhad is a special dividend and I cannot expect it to continue every year.

Sunway REIT

Sunway REIT Dividend Income

RM320.69 was paid out in dividends by one of my favorite REITs (the other being IGB REIT) compared to RM145.60 in March 2015. This is more than a two-fold increase in dividends for me this year and I hope to see the next 3 dividends this year double as well.

As I recall from memory, SunREIT has been performing well, with positive contributions from the new Sunway Putra Mall in KL. Their office tower, The Pinnacle however has seen a low vacancy rate which I hope the management is able to overcome this year. Otherwise, I declare myself satisfied with the REIT’s performance, it has given me a yield of 1.62% for 2016.

CBIP Holding Berhad

CBIP Bhd Dividend Income - March 2016

CBIP has been generous this year – RM300 in dividends was paid out to me back in January 2016. And this month, a special dividend of RM560 was declared and paid out, bringing the dividend yield from my investment in CBIP to a sweet 3.86%. The Company’s final dividend will be paid out later in July and I expect it to be higher than the RM300 received last year.

Positives from CBIP include its ever growing and strong order book and the recent regaining of its pioneer tax status which should contribute positively to its future earnings.

Dividend Yield

The total yield of my investment portfolio currently stands at 1.27% for the year 2016.

Do you have an investment portfolio of your own? If so, what is its current yield and what is your targeted yield for 2016?

Thanks for reading.

February

Another month has passed by and it’s time for me to post an article on my favorite subject: Dividend Income. The reason why I love to publish articles updating my dividend income is because it’s pure numbers. It’s hard to argue the success of long-term dividend growth investing when you can slowly and surely see dividend income rise over time, getting closer to covering one’s expenses. So, without further ado – dividends received in February 2016.

For February, I received a grand total of RM1,635.72 in dividends from three different companies – Homeritz Corporation Berhad, IGB REIT, and Axis REIT. The dividend voucher from IGB REIT has yet to arrive by mail, unfortunately. (EDIT: IGB REIT’s voucher has just arrived together with their 2015 Annual Report. Read about IGB REIT’s 2015 financial performance HERE.)

Axis REIT Dividend Income

Homeritz Corporation Berhad

Homeritz has been in my portfolio since the early days. As of this month, the stock has been up by almost 80% and the RM611.25 I received is already translating to a yield of 4.3%. What’s more, this is only the company’s first of two dividends for the year and I still have August’s dividends to look forward to, which should bring the total yield to more than 8% for 2016 (I hope).

The stock currently makes up 9.01% of my total portfolio. With the further weakening of the Malaysian Ringgit in the future, I might be picking up more of this stock, provided the fundamentals are right and in place. For now, I’m happy to just hold onto Homeritz and reap the sweet rewards.

Axis and IGB REIT

Both Axis and IGB REIT make up around 20% of my total investment portfolio, which is a good indicator of how important dividends are in my style of investing. The dividends received are RM258.39 and RM611.25 respectively from Axis and IGB REIT.

Axis REIT focuses mainly on large parcels of industrial and commercial properties which they lease out as opposed to IGB REIT, as most of you will know, manages Mid Valley Megamall and The Gardens Mall which makes it a retail REIT. Axis REIT has been in my portfolio since May 2014 and IGB REIT since March 2015.

Going with my current strategy of chasing those dividends, I will be adding more of both stocks to my portfolio when the price is right.

Dividend Yield

Total yield of my investment portfolio currently stands at 0.97% for the year 2016.

Do you have an investment portfolio of your own? If so, what is its current yield and what is your targeted yield for 2016?

Thanks for reading.

January

The dividend income I received for the first month of 2016 came from two companies: Scientex Berhad and CBIP Berhad. I received a total of RM794 (RM494 and RM300 respectively). The total weight of both companies represent almost 22% of my entire portfolio.

(Note: CBIP’s dividend voucher has yet to arrive by mail.)

The dividends received translates to a yield of 2.22% from Scientex and 1.35% from CBIP based on the initial investment. This is only the first batch of dividends and both companies will pay dividends again in later in July. I expect both companies to do really well in the future as I see only an increase in demand of their products in the years (hopefully decades) to come.

Total yield of my investment portfolio currently stands at 0.32% for the year 2016.

A summary of my investments for the year 2015 can be found HERE for a rough comparison.

Do you have an investment portfolio of your own? If so, what is its current yield and what is your targeted yield for 2016?

Thanks for reading.

Disposal of Shares – AirAsia Berhad

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Filed Under: Dividends, Portfolio - Freedom Fund, Recent Buy / Sell 4

AirAsia

AirAsia

Earlier today I disposed off my holdings in AirAsia Berhad at RM2.95 per share. I had purchased 4,300 units of AirAsia mid June 2015 for an average price of RM1.66 per unit. Factoring in dividends and brokerage fees, I made a gain of RM5,669.75 which is a 79% capital gain.

Why Air Asia?

As most of you know, the Company’s share price took a tumble for the past year and only recently sky-rocketed. Ever since Tony Fernandes and co took over the Company, I’ve always seen AirAsia as very well managed. With the Company’s slump back in 2015, I saw an opportunity to purchase one of the most well known company in Malaysia if not South East Asia.

AirAsia Tony Fernandes
AirAsia CEO – Tony Fernandes (Source: Time Magazine)

So, the big question was and still is – Why Air Asia? A simple approach to investing would be to just take a step back and look around us, what product do we as consumers use every day? As for travel, which airline does the average Malaysian consumer fly every single time they travel? The answer is without the shadow of a doubt – Air Asia.

‘World’s Best Low Cost Airline’ has been on every flight I’ve been on with Air Asia, that got me thinking on one such trip – they must be doing something right. Immediately, I got to looking into the Company’s financials after my holiday.  Despite some heavy debts which was typical of a young growing company, I liked what I saw. I then only had to wait for the opportune time to purchase the stocks of the World’s Best Low Cost Airline.

Dividends or Capital Gain

As Air Asia was a young and rapidly growing company, I in turn as a shareholder did not expect a high dividend to be paid out but instead for the Company to retain those earnings for further expansion.  I received a dividend of RM172 back in June this year, translating to a 2.41% yield for me.

Why Sell?

I would’ve loved to have held on longer to Air Asia but the stock is way overvalued at its current price and I felt it was time for me to take profit. After holding the stock for close to 14 months, I made a 79% profit, a pretty good investment if you ask me.

Conclusion

I will continue keeping tabs on Air Asia further down the road and if the opportunity comes, I will not hesitate to buy more of the airline’s stock provided the fundamentals remain.

A little sidebar here –  I’m currently looking closely at Axiata and Spritzer as potential companies to invest in. With the sale of AirAsia stocks, I am currently sitting on a war chest of close to RM30K.

As always, thank you for reading.

Maybank – My Best Dividend Stock

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Filed Under: Dividends, Companies in the News 2

Maybank – 2024 Update

Face: Tigress

Source

Update for Maybank (2024)

As of 2024, Malayan Banking Berhad (Maybank) continues to lead as Malaysia’s largest financial services provider. Key developments include:

  1. Financial Performance: Maybank achieved robust growth in revenue and profit, driven by strong regional contributions, particularly from Indonesia and Singapore.
  2. Digital Banking Initiatives: Enhanced digital offerings through its MAE app, focusing on seamless customer experiences and financial inclusion.
  3. Sustainability Goals: Significant progress in ESG commitments, including green financing.
  4. Dividend Consistency: Maintains a strong dividend payout ratio, appealing to long-term investors.

Malayan Banking Berhad (Maybank) is still the largest bank in Malaysia and also the largest and most valuable company in Malaysia by market cap. RM121.88 billion as of December 2024.

My dividend yield for 2024 from Maybank is 7.46% (link to my portfolio). This is based on my initial investment price.
They’ve been steady increasing dividends every year (apart from the year when Covid hit).

Maybank – 2015 Update

Some of you may have noticed my purchase of 1,500 units of Malayan Banking Berhad stocks back in January 2016. I managed to snag the units at a very low price – RM8.30 per share at the time during a brief loss of confidence in Malaysia’s banking industry then. The price of Maybank has since risen to RM9.12 as at 7 April 2016 which translates to a 9.88% unrealized profit for me in 3 months. What’s even more amazing is that at RM9.12, Maybank’s dividend yield is at a cool 5.9% per annum (based on previous dividends), even higher than some of the REITs out there.

Annual Report

Maybank Annual Report 2015

I’ve had Malayan Banking Berhad in my sights for awhile and when the opportunity came this year due to some minor turbulence, I did not hesitate and pounced when the price dropped back in January 2016. Maybank’s annual report came in the mail recently and I’ve uploaded it here for your convenience. I’ve had a brief stint working for Maybank Investment a few years back in the research department. I learnt a lot from them and I’ve been reading their reports every week without fail. I especially like the analysts who cover the airlines industry, develepoers & construction, banking and gaming.

In terms of assets, Maybank is the largest in Malaysia and 4th in ASEAN. I don’t see them catching up to the likes of UOB, OCBC and DBS any time soon though. I’m fine with Maybank being the largest in Malaysia, they are the most recognized and widely used bank in Malaysia, with most government institutions as well as MNCs using their services, for that reason alone the company is worth looking at.

Maybank’s foothold in Indonesia is getting stronger by the year, their branches there outnumber branches in Malaysia. Profits from Indonesia also increases y-o-y. Provided that Maybank is allowed to do business in Indonesia uninterrupted by the government there, I strongly believe Indonesia will be a major cash generator for Maybank. With the huge population there, the banking fees alone will be mind numbing.

Maybank_AR2015

Maybank_AR2015 Maybank_AR2015-Financial_Statements

I will be brief and summarize simply the Annual Report and let you go through it in your own time. Key items to note in regards to Maybank’s 2015 financial performance:

  1. Increased net profit;
  2. Increased deposits from customers;
  3. Increase in net assets; and
  4. Increased shareholder’s equity.

I do believe that the bank did not do as well as expected for the year 2015. I will continue to monitor the quarterly reports as well as compare 2016’s annual report next year.  The other outstanding bank in the country is Public Bank headed by very experienced leaders and managers. Observant readers will notice that I recently added Public Bank to my portfolio – The Freedom Fund. I will be writing on Public Bank in the near future.

For now, thank you all for reading.

Do you own shares in any banks or financial institutions in Malaysia? How do you like them how did they perform in 2015?