MapleTree – DBS

Acquisitions to drive growth


Comment on Results

MLT reported 2Q07 results in line with our expectations. Gross revenue increased 83% y-o-y to S$34.1m, mainly due to the 30 new properties acquired during the year. Cost efficiencies and economies of scale have also resulted in higher net property income margin. Net distributable income grew 84% y-o-y to S$17.7m.

DPU increased by 33.6% y-o-y to 1.59 cents.

Outlook

To date, MLT has a portfolio of 67 properties with a total value of S$2.2bn(including properties pending completion). Moving forward, MLT is expecting to see more growth coming from outside Singapore. With a ready development pipeline from the sponsor in Vietnam, China and Malaysia, MLT is set to expand its footprint in Asia. In the medium to long term, MLT would also be exploring emerging markets such as South Korea, India, Thailand and Taiwan.

Recommendation

With nine announced acquisitions pending completion (worth around S$166m), there is still an acquisition target balance of around S$200m to S$300m. MLT is on track to achieve its target acquisition pipeline of S$1 bn to reach S$2.4bn by year-end.

Maintain Buy recommendation and target price of S$1.46 (based on DCF Valuation).