Mapletree Logistics Trust - DBS Research 2020-04-27: A Shield Against The Storm


Mapletree Logistics Trust - A Shield Against The Storm

  • Strong end to FY20F; maintaining 100% payout a positive.
  • Seeing emerging cautiousness amongst 10% of its tenants due to COVID-19 impact; but majority of tenants are seeing growing volumes.
  • Payout ratio in FY21F assumed at 100%; however, a reduction likely if outlook remains downbeat by 2H20.
  • Acquisitions to drive earnings but likely back-end loaded.

Cautiously resilient

Mapletree Logistics Trust's 4Q20 DPU of 2.048 Scts (+1.2% y-o-y); YTD DPU of 8.14 Scts in line.

  • Mapletree Logistics Trust (SGX:M44U) reported a 5.5% and 9.3% rise in revenues and net property income (NPI) to S$128.1m and S$114.76m respectively.
  • The better performance was mainly driven by stronger revenues from its existing properties and newly acquired additions from Malaysia, Vietnam, South Korea and Japan. This more than offset the contribution from its five divested properties from Japan in 1Q20. Top-line growth also more than offset the weaker foreign currency which was mitigated by currency forwards.
  • On a full-year basis, Mapletree Logistics Trust's revenues and NPI rose by 8.0% and 12.6% to S$490.8m and S$438.5m respectively.
  • Distributable income rose by 6.2% y-o-y to S$77.8m, translating into a DPU of 2.048 Scts (+1.2%). This represents a payout ratio of 100%. On a full-year basis, Mapletree Logistics Trust delivered a 2.5% rise in DPU to 8.142 Scts, in line with estimates.

Balance sheet leverage inches higher; but ample capacity noted.

  • Mapletree Logistics Trust's gearing rose to 39.3% due to additional funds raised to part fund recently completed acquisitions with interest marginally lower at 2.5% (vs 2.7% in March 2019).
  • Asset valuations rose to S$8bn on acquisitions and net appreciation in values for its existing properties, driving NAV to rise by 3.4% to S$1.21. Mapletree Logistics Trust has a long weighted average debt expiry of 4.1 years.

Operating metrics remain resilient.

  • Mapletree Logistics Trust reported a stable occupancy rate of 98.0% (vs 97.7% in 3QFY20) due to higher take-up rates from its Hong Kong and China operations which offset a dip in occupancy rate in South Korea (96.0% in 4QFY20 vs 96.4% in 3QFY20). During the quarter, Mapletree Logistics Trust renewed or replaced leases at an average rental reversion of 2.0%. This mainly came from its Hong Kong, Vietnam and Malaysia properties.

A more cautious outlook due to COVID-19.

Derek TAN DBS Group Research | Dale LAI DBS Research | https://www.dbsvickers.com/ 2020-04-27
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