{"id":17302,"date":"2024-06-28T07:00:56","date_gmt":"2024-06-27T23:00:56","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=17302"},"modified":"2026-06-08T19:52:37","modified_gmt":"2026-06-08T11:52:37","slug":"mapletree-logistics-trust-downside-limited","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hans\/mapletree-logistics-trust-downside-limited\/","title":{"rendered":"Mapletree Logistics Trust &#8211; Downside Limited"},"content":{"rendered":"<p><em>Excerpts from UOBKayHian report<\/em><\/p>\n<h2>Mapletree Logistics Trust (SGX: M44U)<\/h2>\n<ul>\n<li>Mapletree Logistics Trust (MLT) eked out positive rental reversions of 2.9% in 4QFY24 driven by Singapore (+11.1%), despite the drag from China (-10.0%).<\/li>\n<li>Portfolio occupancy was stable at 96.0% as of Mar 24. MLT\u2019s properties in Tier 1 cities, such as Shanghai and Guangzhou, are well located and resilient.<\/li>\n<li>Properties in Tier 2 cities suffered negative rental reversion at low teens and the weakness is expected to persist.<\/li>\n<li>MLT provides FY25 distribution yield of 6.2% (FLT: 6.7%).<\/li>\n<\/ul>\n<p>Maintain BUY. Target price: S$1.89.<\/p>\n<h2>Hampered by strong SGD<\/h2>\n<p>Mapletree Logistics Trust (MLT) reported DPU of 2.211 S cents for 4QFY24 (-2.5% yoy), which is in line with our expectation. The results included divestment gains of S$12.0m.<\/p>\n<p>Gross revenue and NPI increased by 1.2% and 0.6% yoy in 4QFY24 as contributions from overseas assets were curtailed by a strong SGD (JPY: -11% yoy, CNY: -2% yoy, MYR -5% yoy and KRW: -2% yoy).<\/p>\n<p>On a constant currency basis, revenue and NPI would have grown by 3.6% and 3.0% yoy respectively. Higher contribution from existing properties and new acquisitions were offset by weaker performance in China.<\/p>\n<h2>Persistent weakness from China<\/h2>\n<p>MLT achieved positive rental reversion of 2.9% in 4QFY24 (Singapore: 11.1%, Vietnam: 4.0%, Malaysia: 3.1%, South Korea: 2.6% and China:<br \/>\n-10.0%).<\/p>\n<p>Excluding China, positive rental reversion would be 7.1%. Portfolio occupancy was stable at 96.0% as of Mar 24. Vietnam and India maintained full occupancy.<\/p>\n<p>Occupancies for Australia, Japan and Malaysia were maintained at above 98%.<\/p>\n<h2>Translation loss from overseas properties<\/h2>\n<p>MLT incurred net fair value loss of S$1.8m due to properties in Australia (cap rate expanded 75-100bp and rental growth) and China (lower occupancy and rental decline), which is partially offset by gains in Japan \u00a0and rental growth) and Hong Kong (rental growth).<\/p>\n<p>There was currency translation loss of S$470.9m as 80.6% of MLT\u2019s AUM reside overseas. NAV per unit declined 4.2% yoy to S$1.38.<\/p>\n<h2>Resilient balance sheet<\/h2>\n<p>MLT\u2019s aggregate leverage was healthy at 38.9% as of Mar 24. Its average debt duration was 3.8 years. Its average cost of debt was 2.7% for 4QFY24, compared with 2.5% in 3QFY24. Adjusted interest coverage ratio was healthy at 3.1x.<\/p>\n<h2>Stability from geographical diversification<\/h2>\n<p>Outlook is clouded by geopolitical uncertainties and potential trade conflict. Rental rates across most of MLT\u2019s markets are expected to remain stable despite economic slowdown.<\/p>\n<p>Unfortunately, negative rental reversion in China is likely to persist. Management also sees continued headwinds from weakness of regional currencies against the SGD.<\/p>\n<p>Cost of debt could trend higher as loans are refinanced and hedges are replaced at higher interest.<\/p>\n<h2>Repositioning towards modern logistics properties near population centres<\/h2>\n<p>MLT will focus on rejuvenating its portfolio towards modern high-specs logistics properties. Management intends to expand in growth markets, such as Malaysia, Vietnam and India.<\/p>\n<p>Hong Kong and Japan are attractive due to tight supply. Australia and South Korea have experienced cap rate expansion but capital values remain elevated.<\/p>\n<h2>Valuation\/Recommendation<\/h2>\n<p>We roll over our valuation to the next financial year. Our target price of S$1.89 is based on the Dividend Discount Model (cost of equity: 7.0%, terminal growth: 2.8%).<\/p>\n<p>Accretive acquisitions to rejuvenate and reposition towards modern specifications logistics facilities, domestic consumption and e-ommerce and positive contributions from redevelopment projects in Singapore and Malaysia will provide catalyst for Singapore.<\/p>\n<figure id=\"attachment_17307\" aria-describedby=\"caption-attachment-17307\" style=\"width: 1527px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/06\/MLT-1.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-17307 size-full\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/06\/MLT-1.jpg\" alt=\"Mapletree Logistics Trust share price chart\" width=\"1527\" height=\"492\" \/><\/a><figcaption id=\"caption-attachment-17307\" class=\"wp-caption-text\">Mapletree Logistics Trust share price chart<\/figcaption><\/figure>\n<p>You can find the full report <em><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/06\/MLT1.pdf\">here<\/a> <\/em>and the company website <em><a href=\"https:\/\/www.mapletreelogisticstrust.com\/Investor-Relations\/Overview.aspx\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here<\/a>.<\/em><\/p>\n<p>[thrive_leads id=&#8217;15712&#8242;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excerpts from UOBKayHian report Mapletree Logistics Trust (SGX: M44U) Mapletree Logistics Trust (MLT) eked out positive rental reversions of 2.9% in 4QFY24 driven by Singapore (+11.1%), despite the drag from China (-10.0%). Portfolio occupancy was stable at 96.0% as of Mar 24. MLT\u2019s properties in Tier 1 cities, such as Shanghai and Guangzhou, are well [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":17309,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[3053,3051],"tags":[144,1576,1898,1925,1930,2819,2820],"class_list":["post-17302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-reits-dividend-stock-coverage-singapore","category-singapore","tag-reits","tag-stable-reits","tag-logistics-reits","tag-mapletree-logistics-trust","tag-mapletree-logistics-trust-share-price","tag-dpu-growth-reits","tag-reits-singapore"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/comments?post=17302"}],"version-history":[{"count":5,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17302\/revisions"}],"predecessor-version":[{"id":17305,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17302\/revisions\/17305"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media\/17309"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media?parent=17302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/categories?post=17302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/tags?post=17302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}