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Global Logistic Properties - A leader in its field
Leverage into China’s rapidly growing e-commerce sector.
- We maintain BUY on Global logistics Properties (GLP) with TP of S$2.73, pegged at 20% discount to RNAV.
- With the largest portfolio of modern logistics warehouses in China, GLP remains on the front seat to benefit from China’s rising consumerism and thriving e-commerce outlook.
Robust development pipeline in FY16 and beyond
- The group is targeting US$3.4bn in development starts in 2016, which is 30% higher y-o-y.
- The group is also expecting US$2.3bn of development completions, which is almost 92% higher y-o-y.
- For development starts, c.64% will be in be China, 28% in Japan and the remainder in Brazil. In total, the group has a development pipeline of US$6.5bn (GLP’s share: US$2.9bn) to drive earnings over the next 3 years.
AUM of fund management platform rose to S$20bn
- As of end Mar-15, total AUM rose to US$20bn, and the group has another US$3.5bn of uncalled capital to be deployed. Given that this business is a highly scalable and ROE enhancing business arm of the group, management is focusing on driving returns and operational scale through establishing new funds.
- In the immediate term, GLP has recently launched a new US$7bn China development fund (CLF II) primarily looking at development opportunities in China. This will further entrench its market leader position within the logistics warehouse space in China.
Valuation:
- We maintain our BUY call, with target price maintained at S$2.73, based on a 20% discount to RNAV.
Key Risks to Our View:
- A faster than expected ramp up in competing supply on the back of a slowdown retail sector in China, impacting on demand for logistics warehouses.
Derek Tan
DBS Vickers
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Mervin SONG
DBS Vickers
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http://www.dbsvickers.com/
2016-01-06
DBS Vickers
SGX Stock
Analyst Report
2.73
Same
2.73