Mapletree Industrial Trust -
Price at 21 Jan 2014 (SGD) 1.32
Price target - 12mth (SGD) 1.48
3Q results ahead on strong reversions; raising estimates & TP
Mapletree Industrial Trust reported 3Q FY14 DPU of 2.51cts (+1.6% QoQ +8.2% YoY), above our forecast of 2.23cts on account of stronger-than-expected rental reversions and lower-than-exp ected operating expenses. Revenue and NPI rose 9.3% and 12% YoY respectively , driven by positive reversions and higher occupancies for Flatted Factories. Passing rents rose 7%YoY to S$1.73.
Occupancies dip, strong rental reversions
Portfolio occupancy fell slightly QoQ to 92.5% (vs. 93.9%), on the back of a decline occupancies for Hi-Tech Buildings following the completion of the K&S corporate headquarters, and Light Industrial Buildings, which fell to 96.9% vs. 100% in 2QFY14. MLT’s tenant rete ntions remained solid at 66%. Approximately 5% of leases by income are up for renewal in 4Q and 27% for FY15. Overall, MINT achieved positive reversions of between 10-27% across all property segments. The company noted that it believes that industrial rents will remain stable in the near term. However, it believes that a large pipeline of supply may put downward pressure in th e medium term. AEIs at Toa Payoh (25% pre-committed vs. 20% in 2Q) are slated to complete in 1Q14.
Balance sheet firm, DRP to fund development projects
Net gearing was stable at 36.3% as of 3Q. Funding costs also remained constant at 2.3%, with 81% of total de bt hedged. In line with 1Q, proceeds of S$16m from 2Q DRP were used to fund developments costs for AEI’s and BTS projects, and management intends to re peat this for the 3Q DRP. While the domestic acquisition environment remains challenging, offshore opportunities, especially where its sponsor has a presence such as Malaysia, Japan, China and Vietnam could provide a pipeline for growth.
Raising FY14-16 DPU estimates +2-6%, Main tain Buy, target price of S$1.48
Taking into account the late st results, we revise our DPU estimates up by 2-6% for FY14-16. As a result, we raise our target price by 3%. We believe that valuations remain attractive for MINT, wh ich is currently yielding 7.4%, 491bps vs. the 10-yr bond, and 1.2xP/B br oadly on par with LT average.
Source/Extract/Excerpts/来源/转贴/摘录: Deutsche Bank
Publish date: 22/01/14