Mapletree Logistics Trust - Maybank Research 2023-10-26: Keeping The Faith

• Mapletree Logistics Trust (SGX:M44U) reported 2QFY24 DPU of S$0.02268, -0.1% q-o-q and +0.9% y-o-y. 1HFY24 DPU of S$0.04539 was 51.5% of our full-year target.

Continued China headwinds, DPU supported by divestment gains

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• Occupancy and reversions softened mainly due to China. Management remains focused on capital recycling and keeping leverage below 40%.
• We lower our DDM-based target price for Mapletree Logistics Trust to S$1.60 (-11%) after factoring in higher cost of equity but maintain BUY due to focused execution and Mapletree Logistics Trust’s regional network of assets.

Resilient operations marred by FX and China

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• On a constant currency basis, 2QFY24 revenue and NPI would have grown by 6.1% and 5.7% y-o-y respectively.
• Coupled with higher interest expense, distribution from operations fell 1.5% y-o-y. However, this was more than offset by top ups from divestment gains.
• On a q-o-q basis, Mapletree Logistics Trust's 2QFY24 revenue and NPI rose 2.5% and 2.4% respectively. However, higher borrowing cost resulted in a slight fall in DPU by 0.1%. China accounts for ~20% of revenue and its contribution fell 0.1% q-o-q and 12.2% y-o-y in S$.

Stable operating metrics, focus on capital recycling

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Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-10-26 SGinvestors.io

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