LINK REIT starts to become clever | Cheng Zhi Hua

In Hong Kong, there are several stocks held by a large number of local investors, such as CLP Holdings (002), Hong Kong and China Gas (003), MTR Corporation (066), Hong Kong Exchanges and Clearing (388), and of course, Link REIT (823). All of these are closely related to the lives of Hong Kong citizens, as everyone uses their services and has an emotional connection, coupled with confidence in the quality of the companies, thus feeling secure in buying and holding them. However, buying stocks does not equate to guaranteed profits. When companies face adverse situations, their stock prices will drop. For example, CLP faced investment losses in Australia; Hong Kong and China Gas announced no bonus shares; HSBC's relocation overlooked its Hong Kong business; MTR encountered a downturn in the real estate market... Moreover, Link REIT, which is most widely held by citizens, also saw its business outlook deteriorate due to soaring interest rates, declining rental values, and poor land purchases in Anderson, leading to a drop in its stock price. Listed 21 Years Ago, Strongly Encouraged to Buy Link REIT was listed 21 years ago. At that time, I thought it was a mistake by the government to sell assets at a low price, as they packaged valuable shopping malls and parking lots for listing, selling at only HKD 10 per share. Considering the value of shopping malls and parking spaces in the same area at that time, this stock was definitely worth at least HKD 20, meaning there was more than a 100% upside potential. Therefore, I strongly encouraged small investors on the radio to buy quickly, as global big players would definitely rush to grab the stock. Indeed, the fastest to act was The Children Investment Fund (TCI), which swept up over 380 million units, making a fortune. As Link REIT's stock price rose, I kept urging everyone to buy whenever they received their salaries. Of course, I also took action, stopping only when it reached over HKD 50. Above HKD 55, I did not buy anymore and stopped encouraging others to buy, as I felt it was saturated. However, the market went crazy, and under citywide enthusiasm, it soared to nearly HKD 100 in 2019! Looking back, those who bought above HKD 50 and did not sell are now all stuck. The objective situation has changed dramatically. Link REIT has experienced global high interest rates, excessive expansion, and declining rental values, dropping to a level of HKD 30 by July 2024, and finally had to issue new shares. I fully subscribed at HKD 44.2. Subscribing was not a problem, but what angered small shareholders the most was the former CEO, Wong Kwok Lung, who "called for subscriptions while relaxing himself," which was very unethical. At that time, someone asked, "Should we jump ship?" I did not answer, as I had never sold a single share and had decided early on not to take dividends but only bonus shares. Over the 21 years, my average holding price for Link REIT became HKD 28, and because I had received dividends for many years, I had fully recouped my investment. Today, I mention Link REIT because I see it performing well again. After Wong Kwok Lung left, it has clearly bounced back. Last week, it sold a property in Singapore, making a profit of over 40%. Cheers! Senior Media Person: Zeng Zhi Hua