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GLP.... Make rumor your best friend

Market gossips can be very rewarding if it turned up to be true. Like winning the jackpot provided if you risk to take the bet. All you need are some market analysis and some patience to wait for the Lady Luck to be on your side.

Stephen king once said ' There will be no gain without risk."


Global Logistic Properties (GLP) is a leading provider of modern logistics facilities with a US$38 billion portfolio comprising 53.7 million square meters of logistics facilities across China, Japan, Brazil and USA. Listed in Singapore at $1.96 per share since 2010.



There was rumor started circulating online about possibility of privatization and the share price jumped to $1.90. Since it listed in 2010, it have hardly trade about its IPO price. I read about the rumor and I got very interested about this counter. I begun to study the company's profile and I came to a conclusion that this company was a real value "BUY" even if the rumor turn up to be false. It was way below book value and under appreciated by investors. It should worth at least $2.80 and above per share based on my opinion.

 The positive attributes that I like about GLP:

1. Market leader - huge portfolio of properties with modern logistic, high demands from the blooming e-commerce.
2. Right market trend - Part of the critical components of modern e-commerce, warehousing for semi and finished products, last mile delivery solutions.
3. Below IPO - it was trading below IPO price for many years even as the profit grows over the years.
4. Good sponsor - total 10 cornerstone investors including Singapore GIC during IPO.



So, I initiated my trading plan on GLP. I started buying at $1.96 and continue to accumulate until it hits $2.50. I set my target to sell above $3 or wait until they announce the buyout deal. Waited patiently riding the share price uptrend for many months as the rumors spread like wild fire.

In July, there was a sudden dropped in share price, more than 10% in an hour period due to rumor that the privatization failed. Honestly, I'm really felt the pressure and wanted to run for the exit. I had so much gain from my entry that I felt I need to take some profit out from the table. So, I sold about 10% of my holding before GLP suspended from trading pending announcement just to manage my risk.

The announcements come in 1 week later turned up to be heart lifting event. They announced a record S$16 billion privatization deal offering price at $3.38 per share and the deal closed on Jan 2018.

With this deal concluded, my trade on GLP net about $19,700 not inclusive of dividend paid out for that year. Investment period of 8 months and the investment return rate (IRR) were >30%.


- WILLIAM CHENG

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