Global Logistic Properties Ltd - OCBC Investment 2017-05-19: Healthy Set Of FY2017 Results

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GLOBAL LOGISTIC PROP LIMITED MC0.SI

Global Logistic Properties Ltd - Healthy Set Of FY2017 Results

• FY2017 results in line.
• Healthy operational performances.
• Maintain HOLD with S$2.87 FV.

4QFY17 PATMI up 62% due to higher asset values 

• GLP’s 4QFY17 PATMI increased 62% YoY to US$247.1m mainly due to higher asset values as we saw portfolio cap rates compress over the quarter in Japan, US and Brazil. 
• On a core basis, however, after adjusting for non-recurring items, 4QFY17 earnings fell 5% YoY mainly due to lower contributions from the group’s second US portfolio after its syndication in 2QFY17. As a result, FY2017 PATMI now cumulates to US$793.7m, up 10.4% YoY. In terms of the topline, 4QFY17 revenues increased 14.0% to S$226.9m mostly due to rent growth and lease- up after the completion and stabilization of Chinese development projects, financial services income from China and higher fund management fee income. 
• Overall we judge this quarter’s number to be broadly in line with expectations. 
• An ordinary dividend of 6.0 S-cents per share has been proposed.

FY2018 targets: US$2.2b new developments starts and US$1.7b completions 

• Management reports continued customer demand for its logistic facilities globally, with the group’s average lease ratio at a healthy 91% as at end Mar 2017 (albeit down 1% QoQ due to some weakness in China), and group new and renewal leases up 35% YoY to 13.3m sqm, 6.3% growth in same-property NOI and 8.9% rent growth in renewal leases. 
• In FY2017, the group also exceeded its development targets, starting US$2.2b in developments and completing US$1.6b in projects. 
• The group plans to start US$2.2b of new developments and complete US$1.7b of developments in FY2018. 
• In addition, GLP’s fund management revenues increased 21% YoY to US181m with total AUM up 11% YoY to US$39b as at end Mar 2017.

Remains in discussions with several parties for Independent Strategic Review 

• Regarding the ongoing strategic review, GLP reports that it remains in discussion with several shortlisted parties following its evaluation of non- binding proposals received and the due diligence process is ongoing. 
• Management reiterates that there is no assurance that any transaction will materialize from the review. 
• Maintain HOLD with an unchanged fair value estimate of S$2.87.

Eli Lee OCBC Investment | http://www.ocbcresearch.com/ 2017-05-19

OCBC Investment SGX Stock Analyst Report HOLD Maintain HOLD 2.870 Same 2.870