Monday, December 23, 2013

Mapletree Industrial Trust : Low Risk, High Returns (DBSV)

Mapletree Industrial Trust
BUY S$1.285
STI : 3,067.57
Price Target: 12-Month S$1.44
Low Risk, High Returns

• Organic growth uptrend remains intact
• Completions of development projects to contribute positively over FY14F-16F
• BUY, TP S$1.44 maintained

Earnings uptrend remains intact. At DPU growth of c.5% CAGR over FY14F-16F, Mapletree Industrial Trust (MINT) is expected to deliver one of the strongest earnings growths among peers. Growth is largely organically driven from positive rental renewals, as its portfolio of under-rented flatted factories progressively marks up its rents to current market levels. Based on our understanding, expiring rents are still at c.10% below market transaction levels, which implies that reversionary trend is expected to be strong.

Completions of development projects to contribute over 2014-2015. MINT has also committed c.S$198m in various built-to-suit projects and asset enhancement works - Kulicke & Soffa (72% precommitted), Equinix (100% committed) and Toa Payoh North 1 (20% pre-committed), which when completed over the coming quarters, will contribute positively to earnings. Coupled with a steady organic growth profile, these initiatives are likely to more than compensate for the loss in income from the relocation of Credit Suisse and Lucasfilms at The Signature (c.2% of revenues).

BUY maintained, TP S$1.44. BUY maintained, TP S$1.44. We like MINT for its growing and attractive FY14-16F yields of 7.6%-8.3%, which we believe carry minimal risks at this point.

Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 19/12/13

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