MAPLETREE LOGISTICS TRUST (SGX:M44U)
Mapletree Logistics Trust - Stabilising Logistics Markets Add Optimism
- MAPLETREE LOGISTICS TRUST (SGX:M44U)’s 3Q/9M20 DPU of 2.044/6.094 Scts was in line at 26%/77% of our FY20 forecasts after completing seven acquisitions in 3QFY20.
- Occupancy improved to 97.7% from 97.5% in 3QFY20 due to stronger occupancy in Singapore while rental reversions were +1.2% for the portfolio.
- Maintain HOLD. Our DDM-based Target Price edges up slightly as we account for acquisitions and divestments as well as roll forward our valuations. See Mapletree Logistics Trust Target Price.
3QFY3/20 results in line at 26%/25% of our/consensus forecasts
- Mapletree Logistics Trust's 3Q/9M20 DPU of 2.044/6.094 Scts (+2.1%/3.0% y-o-y) was in line at 26%/77% of our FY20 forecasts due to stronger contributions from its existing portfolio but partially offset by the divestment of five Japanese properties in 1QFY3/20.
- 3Q/9M20 NPI margins also improved y-o-y due to the adoption of the new FRS16 for leases, though this also resulted in higher borrowing cost due to recognition of interest expense on lease liabilities.
Occupancy and rental reversions saw an uptick
- Portfolio occupancy improved from 97.5% in 2Q20 to 97.7% in 3Q20 due to higher occupancy in Singapore but partly offset by lower occupancies in South Korea and China. The portfolio also achieved an average rental reversion of +1.2% mainly from Hong Kong, Vietnam and Malaysia.
- While China experienced a rental reversion of +1.1%, we note that assets in Tier 1 cities performed better than Tier 2 cities as a result of tighter supply.
Gearing lowered post-quarter end
- Mapletree Logistics Trust’s aggregate leverage inched up to 37.5% from 37.0% as a result of the S$234m debt drawn down to fund the acquisition of seven logistics properties in China, Vietnam and Malaysia. This was partially offset by lower translated foreign currency loans due to the depreciation of the Hong Kong dollar, Aussie dollar and Japanese yen against the Singapore dollar.
- Mapletree Logistics Trust also disclosed that gearing was lowered to 37.1% at end-3QFY3/20 due to repayment of loans from net divestment proceeds from Mapletree Waigaoqiao.
- See Mapletree Logistics Trust Share Price; Mapletree Logistics Trust Analyst Reports; Mapletree Logistics Trust Dividend History; Mapletree Logistics Trust Announcements; Mapletree Logistics Trust Latest News.
Maintain HOLD.
- Our DDM-based Target Price is adjusted as we account for the divestment of Mapletree Waigaoqiao Logistics Park, completion of acquisitions in Malaysia, Vietnam and China and roll forward our valuations to FY21F resulting in a 1.88-3.15% increase in FY20-22F DPU estimates. See Mapletree Logistics Trust Target Price.
- We like Mapletree Logistics Trust for its diversified portfolio of high quality logistics assets and we expect a q-o-q rise in DPU for 4Q20 due to full contributions from its acquisitions completed in 3Q20, partly offset by the absence of income from the divestment of Mapletree Waigaoqiao.
- Our HOLD call on the stock is maintained due to elevated valuations (4.4% FY20F yield and 1.6x P/BV, more than 2 s.d. above historical mean).
- Upside risks are accretive acquisitions and stronger-than-expected rents.
- Downside risks include further depreciation of foreign currencies and escalating trade tensions.
LOCK Mun Yee
CGS-CIMB Research
|
Ervin SEOW
CGS-CIMB Research
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https://www.cgs-cimb.com
2020-01-21
SGX Stock
Analyst Report
1.56
UP
1.550
