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Mapletree Logistics Trust - DBS Research 2020-04-08: Essential & Resilient

MAPLETREE LOGISTICS TRUST (SGX:M44U) | SGinvestors.io MAPLETREE LOGISTICS TRUST (SGX:M44U)

Mapletree Logistics Trust - Essential & Resilient

  • Value emerging after recent price decline.
  • Operations should remain relatively resilient in the midst of COVID-19 outbreak in its key markets.
  • Acquisition momentum unlikely to be derailed in the medium term; confident that acquisitions will feature sometime in 2020.
  • BUY with Target Price of S$1.85 as we adjust our cost of equity assumptions.



A safe harbour, upgrade to BUY, Target Price S$1.85.

  • We see value emerging for Mapletree Logistics Trust (SGX:M44U) after its recent share price correction, bringing valuations to a more palatable 1.3x P/NAV, yield of 5.2%.
  • We remain comfortable that Mapletree Logistics Trust’s pure logistics exposure is least impacted by the COVID-19 outbreak and Singapore’s tightening restrictions on workspaces (logistics is less impacted) will imply that its earnings profile will remain more stable than peers.


Where we differ: COVID-19 may impact operations albeit marginally.

  • We understand that the COVID-19 outbreak has indirectly impacted operations for some of its tenants, especially in the consumer space in China, Singapore and Hong Kong.
  • While we anticipate some rent relief to tenants, the gradual relaxation of restrictions in China implies that the initial worries of a widespread rebate is unlikely to materialise. Our earnings estimates are moderated by -4 % to conservatively assume negative reversions (SG/HK) and slower acquisition assumptions.


Structural growth drivers in place; moderate acquisitions assumptions.

  • We retain our optimism that Mapletree Logistics Trust can deliver acquisitions, but likely towards the end of 2HFY21 onwards. We moderate our forecast to S$350m worth of acquisitions in FY21 funded by 40% debt/60% equity, and this has not been priced in by consensus at this point. Opportunities will likely come from its Sponsor which has an extensive pipeline of properties.






Derek TAN DBS Group Research | Singapore Research Team DBS Research | https://www.dbsvickers.com/ 2020-04-08
SGX Stock Analyst Report BUY UPGRADE HOLD 1.85 DOWN 1.900



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