Mapletree Logistics Trust - Maybank Research 2024-01-25: Taking A Breather, Downgrade To HOLD

• While logistics is a good theme, sluggish recovery in China and competition from new supply make us downgrade Mapletree Logistics Trust (SGX:M44U) to HOLD. We lower estimates but raise Mapletree Logistics Trust's target price to S$1.70, factoring in a lower discount rate.

China headwinds; easing occupancy

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• Organic growth and contributions from newly acquired assets were offset by higher borrowing cost, weaker FX and lower income from its China portfolio.
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• Debt metrics were relatively unchanged.

Steady set of results

• Mapletree Logistics Trust's 3QFY24 revenue and NPI of S$184m and S$159.5m rose 2.1% and 1.5% y-o-y respectively. Organic growth and contributions from assets acquired earlier in the financial year was partly offset by weakness in China and FX depreciation.
• On a constant-currency basis, revenue and NPI was up 4.8% and 4.1% respectively.
• Distribution of gains from divestments more than offset the impact of higher borrowing cost, resulting in 1.2% growth in DPU. On a q-o-q basis, revenue and NPI weakened due to lower contributions from China and a weaker JPY. DPU fell 0.7% q-o-q.
• Mapletree Logistics Trust's gearing (38.8%) and borrowing cost (2.5%) were relatively unchanged from 2Q. Debt cost guide for FY25 is 2.8-3%.

Operating metrics softer

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Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-01-25 SGinvestors.io

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