MapleTree – CIMB

Conducive growth environment

• Expect higher distributable income in 3Q07. MLT will be releasing its 3Q07 results on 25 Oct. We expect increased distributable income of S$20m, up 87% yoy and 13% qoq, powered by the acquisition of 32 properties totalling S$883m YTD. This includes the completion of acquisitions made in FY06 as well as acquisitions announced in FY07. DPU is expected to reach 6.4cts, 10% above our previous estimate of 5.8cts for the whole of FY07.

• DPU upgrade. In view of higher distributable income expectations for 2H07 with more completed properties, we have increased our DPU forecasts for FY07-09 by 10-13%.

• Low interest rates good for acquisitions. As long leases in MLT’s existing portfolio limit rental reversions and escalation, MLT’s income growth would be mainly driven by acquisitions, we believe. The downtrend in US interest rates is therefore a positive for MLT, which is highly leveraged.

• Maintain Outperform with a higher target price of S$1.65. Following our DPU upgrades, we have raised our DDM-derived target price from S$1.43 to S$1.65. We have also rolled over our valuation basis to CY08, with an unchanged cost of equity assumption of 6.9%.