GLOBAL LOGISTIC PROP LIMITED
MC0.SI
Global Logistic Properties - Entrenched leadership position
Leveraging on China’s rapidly growing e-commerce sector.
- We maintain BUY on Global logistics Properties (GLP) with TP of S$2.47, pegged at a wider 30% discount to RNAV to reflect ongoing uncertainties in the operating environment.
- 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.
Confidence to achieve development pipeline in FY16.
- As of 9M16, GLP had achieved 55% of its target for development starts in FY16 (US$2.9bn, GLP share of S$1.4bn) with China and Japan lagging behind at 63% and 54% of the full-year target.
- We understand that management is confident of achieving full-year target given strong demand for space currently under negotiation.
- In terms of completions, management expects to achieve its full-year target of US$2.0bn (GLP share of US$880m) despite having achieved only 66% of that currently.
- Regulatory approvals should be obtained soon, which will pave the way for most of projects pending completion.
AUMAUM of fund management platform rose to S$32bn.
- As of end Dec-15, total AUM rose to US$22.3bn, and the group has another US$9.8bn 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 by establishing new funds.
Valuation:
- We maintain our BUY call, with target price revised to S$2.47 pegged at a wider 30% discount to RNAV.
Key Risks to Our View:
- A faster-than-expected ramp-up in competing supply on the back of a slowdown in China's retail sector, impacting on demand for logistics warehouses (unclear).
Derek Tan
DBS Vickers
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Mervin SONG CFA
DBS Vickers
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http://www.dbsvickers.com/
2016-02-05
DBS Vickers
SGX Stock
Analyst Report
2.47
Down
2.73
