MapleTree – DBS

Stable and Resilient

MLT reported their 4Q08 results in line with estimates, mainly due to contributions from its robust acquisitions over FY08. Looking ahead, the trust doed not face major refinancing needs. A low gearing of 38.5% combined with an unencumbered underlying asset portfolio underpins its balance sheet strength. Maintain BUY, TP$0.44 based on DCF. MLT is currently trading at c.14% FY09-10 DPU yield.

Results in Line. MLT reported a 4Q08 topline of S$52.4m (+ 30% yoy, 14% qoq) on top of a 43% yoy growth in distribution income to S$28.3m. DPU was 1.46 Scts, an -18% yoy was due to higher share base from rights issued completed in 2H08. For FY08, the trust delivered a DPU of 7.24cts. Assets were revalued upwards by c. S$94m (+ 3.3%), resulting in an NAV of S$0.89. Gearing is at a low of 38.5%.

No major refinancing needs. We view that MLT does not face major refinancing needs as short-term debt of c. S$218m is just 7% of total portfolio which is currently unencumbered. These assets will form a strong collateral base for further new loans when needed. In addition, the trust has more than sufficient lines to meet its debt obligations. Post recap balance sheet remains robust (38.5% gearing) and is poised to ride out current tough economic times well.

Buy for sustainable yield. We believe MLT is likely to continue to deliver a sustainable yield of c. 14% FY09- 10 fully diluted yield. Our forward earnings estimates reflect a 10% decline in portfolio occupancy over FY09. Rolling forward our valuations, we derive a TP of S$0.44. Maintain BUY.