Monday, December 23, 2013

Mapletree Logistics Trust : Strength in diversity (DBSV)

Mapletree Logistics Trust
BUY S$1.015
STI : 3,067.57
Price Target: 12-Month S$1.16
Strength in diversity

• Steady earnings growth from an expanding portfolio
• Ready acquisition opportunities from sponsor
• BUY, TP S$1.16

Steady earnings growth from an expanding portfolio. Supported by a diversified portfolio located across Asia offering resilient income streams, Mapletree Logistics is expected to continue to deliver growth through a myriad of initiatives. Firstly, the manager expects rental reversions to remain positive, albeit at a more moderate rate in the coming year, given robust demand for space. In addition, MLT will start recognizing income contribution from the completed Mapletree Benoi Logistics hub (S$100m investment, ROI of 8%).

Acquisition opportunities from sponsor. The manager sees limited 3rd party acquisition opportunities, given the strong competitive environment. However, the trust stands ahead of peers from a visible pipeline of assets available from is sponsor, Mapletree Investments. A low gearing of 34% implies a debt-funded headroom of up to S$500m (up to 40%), although we believe the trust is unlikely to approach that level. We have assumed S$100m in acquisitions in our forecasts, fully funded by debt.

BUY maintained, TP S$1.16. At 1.1x P/BV, both forward yields of 6.7-7.1% and current entry levels are attractive.

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

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