Mapletree Logistics Trust - DBS Research 2020-06-12: Structural Tailwinds

MAPLETREE LOGISTICS TRUST (SGX:M44U)

Mapletree Logistics Trust - Structural Tailwinds

COVID-19 the catalyst to drive the acceleration of e-commerce sales in the region.
Mapletree Logistics Trust is well placed to ride the trend with 75% of its revenues from consumer-related sectors; 25-30% in the e-commerce space.
Entering the virtuous cycle of accretive inorganic growth.

We remain positive on Mapletree Logistics Trust (SGX:M44U) despite the recent share price rally. Expected increased adoption of e-commerce post COVID-19 is the catalyst for the REIT to accelerate its growth plans in the medium term. With supportive structural tailwinds in place, we believe Mapletree Logistics Trust remains well placed to also acquire accretively.
We raise our Target Price to S$2.05 as we lower our discount rate assumptions.

A coordinated response from the Singapore government to infuse liquidity and support businesses mitigates downside risks for its Singapore exposure, which contributes c.35% of revenues.
Looking ahead, with c.75% of its revenues focused on the consumer-related sector (of which 25-30% in the e-commerce space), we anticipate Mapletree Logistics Trust to see accelerating demand riding on the back of increased consumer adoption of e-commerce sales in the longer term.

We retain our optimism that Mapletree Logistics Trust can deliver acquisitions. We priced in S$350m worth of acquisitions in FY21 funded by 40% debt/60% equity. Opportunities will likely come from its Sponsor which has an extensive pipeline of properties.

Derek TAN DBS Group Research | Dale LAI DBS Research | https://www.dbsvickers.com/ 2020-06-12

SGX Stock Analyst Report BUY MAINTAIN BUY 2.05 UP 1.850