Global Logistic Properties - DBS Research 2017-05-17: ‘Bids’ Closing Soon…

Global Logistic Properties - DBS Vickers 2017-05-17: ‘Bids’ Closing Soon… GLOBAL LOGISTIC PROP LIMITED MC0.SI

Global Logistic Properties - ‘Bids’ Closing Soon…

  • According to latest media reports, bidding process could close soon.
  • Limited upside to target price after share price rerated further to above S$2.90.
  • Only 11% upside at the higher-end of historical takeover premiums.
  • Downgrade to HOLD rating.

Downgrade to HOLD; TP of S$3.00. 

  • We downgrade GLP to HOLD given the limited upside to our current target price of S$3.00.
  • Despite the ongoing corporate activity possibly involving various bidders for the company, we believe its current share price at close to 1.2x P/NAV which in our view is fair when compared to former transaction multiples.

Where we differ. 

Limited upside to fair value pegged to historical takeover premiums. 

  • We have a street high target price of S$3/share. In view that the bidding process could close soon as reported in the latest news and assuming a takeover happens, we believe GLP's share price which has rallied to above S$2.90 is close to our estimate of its fair value price of S$3.00 based on CMA’s takeover at a P/BV multiple of 1.2x. 
  • At our target/fair value price, this implies a c.36% 12-month VWAP todate for the company (which includes 6-month VWAP before the announcement of a strategic review). 
  • At the higher end of the historical takeover premiums of 1.32x, the fair value price could be at a high of S$3.23, implying only a 11% upside.

Potential catalyst. 

  • Bids are more competitive than expected/revaluation of assets at end-FY17.
  • What could derail our thesis? Scenarios that could derail our thesis include 
    1. partial disposal of the assets instead of a full takeover, 
    2. further delays in the process, and 
    3. higher-than-expected revaluation of the assets from potential completion of developments.


  • Our target price of S$3.00 is based on 15% discount to RNAV.
  • This implies 1.2x P/NAV in view of a potential corporate development on the horizon.

Key Risks to Our View

  • Key risks to our view are bids that do not result in a takeover of the company, which means that its share price could drop back to S$2.50-2.60, close to 1.0x P/NAV.

Rachel Tan DBS Vickers | Derek Tan DBS Vickers | 2017-05-17
DBS Vickers SGX Stock Analyst Report HOLD Downgrade BUY 3.000 Same 3.000