Global Logistic Properties Ltd - OCBC Investment 2016-12-02: Reviewing strategic options

Global Logistic Properties Ltd - OCBC Investment 2016-12-02: Reviewing strategic options GLOBAL LOGISTIC PROP LIMITED MC0.SI

Global Logistic Properties Ltd - Reviewing strategic options

  • Strategic review of options.
  • Request from largest shareholder.
  • No definite transaction entered.

Undertaking independent strategic review of options 

  • GLP announced that it is undertaking an independent strategic review of options to enhance shareholder value, after it has received a request from its largest shareholder, GIC Real Estate Private Ltd, which holds a 37% stake in the GLP. 
  • The group has appointed JP Morgan as a financial advisor to assist on the strategic review and has also set up a special committee, comprising four independent directors, to oversee the strategic review.

Making preliminary approaches to various parties 

  • We understand that the group, through JP Morgan, is in the process of making preliminary approaches to various parties to evaluate the viability of options for its business. 
  • Management emphasized that no definite transaction has been entered into with any party. 
  • Overall, we see this as a positive development that underscores the fact that the GLP's share price has been persistently undervalued but caution against speculating on a near-term sale of the company, which is uncertain.

Significant long term fundamental value in GLP shares 

  • We continue to see significant long term fundamental value in the group's shares at current prices, given its business portfolio and leading positions in its key markets. 
  • We believe the outlook for advanced logistic facilities remains firm with the growth of e-commerce globally, particularly in the group's major market China where online shopping is undergoing vibrant growth. The group manages over US$12b of assets in China and enjoys significant operating leverage with its scale and network of key clients. 
  • Maintain our BUY rating with a fair value estimate of S$2.37.

Eli Lee OCBC Investment | 2016-12-02
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 2.370 Same 2.370