MapleTree – CIMB
Keep the assets coming
• Full year below expectations. FY06 DPU of 5.1cts is 2% short of our forecast but in line with consensus estimate. A larger mix of multi-tenanted acquisitions compressed MLT’s NPI margin, which came in below expectations. Gross rental revenue surged 167% yoy to S$26.9m in 4Q06, on account of a larger portfolio of S$1.4bn at end-FY06 vs. S$462m a year ago. Jurong Logistics Hub, MLT’s largest property in Singapore to date, also began contributing in 4Q06. Overall occupancy was 99.6% while renewed rent rates were on average 7.1% higher than the rates in 4Q06. MLT’s gross gearing remained manageable at 55%.
• Portfolio to grow by another S$1bn this year. MLT has announced S$221m worth of acquisitions scheduled for completion by 1Q07. These acquisitions will bring MLT’s assets to S$1.6bn. MLT will have additional debt headroom following the latest round of equity fund-raising (assuming unitholders’ approval is secured today). As such, we believe MLT is financially equipped to meet our portfolio target of S$2.4bn by end-FY07.
• Overseas properties from sponsor. Two overseas properties that sponsor Mapletree is developing – Lingang Free Port (S$39m, GFA 46,500 sq m) in China and the Vietnam Singapore Industrial Park (VSIP 1, GFA 23,600 sq m), are near completion. Pre-leasing activities have begun for both properties, which could be injected into MLT as soon as this year.
• Introducing FY09 DPU forecast. Assuming MLT’s assets grow from S$3.4bn in FY08 to S$4.4bn by end-FY09, with the acquisitions financed by 45% debt and 55% equity, we initiate our FY09 DPU forecast of 7.1cts. Our FY07-08 DPU forecasts remain intact, translating into forward yields of 4.8-5.8%, which are attractive compared with the average 4.5-5% that S-Reits currently offer.
• Maintain Outperform. Our DDM-based target price of S$1.32 remains relevant. At our FY07 DPU forecast of 5.8cts, prospective dividend yield is 4.4%. This is in line with the FY06 dividend yield that MLT trades at. MLT has met its portfolio target in its first full year of operation. Its expansion pipeline remains solid and it remains one of the fastest-growing Reits in Singapore. Maintain Outperform.