GLOBAL LOGISTIC PROP LIMITED
MC0.SI
Global Logistic Properties - Trading at attractive levels
- Core FY16 earnings increased 20% y-o-y, in line
- Management turns cautious and lowers development targets
- Looking to US and potentially Europe to grow AUM
Bad news priced in.
- We maintain BUY on Global logistics Properties (GLP) with TP of S$2.47, pegged at 30% discount to RNAV to reflect ongoing uncertainties in the operating environment.
- Trading at a trough level of 0.8x P/BV, we believe the cautious outlook is priced in.
Underlying business remains stable despite lower development pipeline.
- Despite a lower development pipeline in FY17, the underlying business remains stable with a high lease ratio of 92% and decent growth in rents on renewals.
- Its dominant position in the respective markets and modern facilities is an advantage in a competitive market.
AUM of fund management platform rose to US$35bn.
- As at end-FY16, total AUM rose to US$35bn, and the group has another US$11bn of uncalled capital to be deployed.
- Given that this business is a highly scalable and an 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 and target price of S$2.47, pegged at 30% discount to RNAV.
- Despite a weaker outlook, we believe the current share price, which is trading at a trough level of 0.8x P/BV, is attractive.
Key Risks to Our View:
- Faster-than-expected ramp-up in competing supply on the back of a slowdown in China's retail sector would impact demand for logistics warehouses.
Rachel Lih Rui Tan
DBS Vickers
|
Derek Tan
DBS Vickers
|
http://www.dbsvickers.com/
2016-05-20
DBS Vickers
SGX Stock
Analyst Report
2.47
Same
2.47
