- 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
- Read more at SGinvestors.io.
