Mapletree Logistics Trust - CGS-CIMB Research 2021-01-26: Acquisitions Underpin Revenue Expansion

MAPLETREE LOGISTICS TRUST (SGX:M44U)

Mapletree Logistics Trust - Acquisitions Underpin Revenue Expansion

Mapletree Logistics Trust's 3Q/9MFY21 DPU of 2.065/6.165 cents was broadly within our expectations.
High portfolio occupancy, positive reversions and inorganic growth prospects to drive outlook.
Reiterate HOLD with a higher DDM-based target price of S$2.10.

Mapletree Logistics Trust (SGX:M44U) reported a 1% y-o-y rise in 3QFY3/21 DPU of 2.065 cents, thanks to an 15.5% y-o-y improvement in gross revenue due to higher contributions from existing properties, accretive acquisitions and income from the recently completed Ouluo P2 redevelopment in China, partly offset by an expansion in unit base following an equity fund raising exercise.
Mapletree Logistics Trust's 9MFY21 DPU of 6.165 cents was broadly in line with our expectations at 73.3% of our FY21F forecast.

Mapletree Logistics Trust’s portfolio saw a slight q-o-q dip in occupancy to 97.1% as at end-3QFY21, dragged by lower occupancy in HK SAR and Japan, partly offset by higher take-up in China and South Korea.
In terms of operations, there was positive rental reversions of 1.6% coming from HK SAR, Malaysia, China and Vietnam properties.
Mapletree Logistics Trust has a remaining 6% and 26.5% of rental income to be renewed in 4QFY21F and FY22F and management expects rental reversion to continue to remain relatively stable.

In 3QFY21, Mapletree Logistics Trust acquired a portfolio of 9 properties in China, Malaysia and Vietnam as well as one property each in Australia and Japan, totaling ~S$1.2bn. These acquisitions were partly funded by a S$644m equity fund raising. As a result, gearing declined to 36.8% at end-Dec 2020.
Looking ahead, management guided that it will continue to explore third-party acquisition opportunities, particularly in South Korea and India. Given its expanded portfolio base, it could also evaluate opportunities to acquire pre-stabilised properties that could provide higher returns.
We anticipate that Mapletree Logistics Trust would be able to conclude more acquisitions in the short-to medium-term. In addition, with greater debt headroom capacity, we believe any further new purchases would likely be accretive.
Mapletree Logistics Trust's balance sheet remains strong with a well-staggered debt maturity profile of 3.8 years and 79% of its debt hedged into fixed rates.

We tweak up our Mapletree Logistics Trust's FY21-23F DPU forecasts to bake in contributions from the new acquisitions. As such, our DDM-based target price is raised to S$2.10.
See Mapletree Logistics Trust Share Price; Mapletree Logistics Trust Target Price; Mapletree Logistics Trust Analyst Reports; Mapletree Logistics Trust Dividend History; Mapletree Logistics Trust Announcements; Mapletree Logistics Trust Latest News.
We like Mapletree Logistics Trust for its pan-Asian logistics asset focus but at a projected ~8.2% total return, our rating remains a HOLD.
Upside risk: more accretive acquisitions.
Downside risk: slow macro outlook that would hamper rental growth utlook.

LOCK Mun Yee CGS-CIMB Research | EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-01-26

SGX Stock Analyst Report HOLD MAINTAIN HOLD 2.10 UP 2.050