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Mapletree Logistics Trust (MLT SP)
3QFY23: Steady Execution Despite Forex Headwinds
DPU growth of 1.9% yoy for 3QFY23 was in line with expectations. MLT achieved broadbased positive rental reversion of 2.9% and portfolio occupancy improved 0.5ppt qoq to 96.9%, driven by Singapore, China and Japan. MLT plans to grow through capital recycling and redevelopments. It has a resilient balance sheet with aggregate leverage of 37.4% and average debt duration of 3.6 years. MLT provides attractive FY23 distribution yield of 5.6% (FLT: 5.9%). Maintain BUY. Target price: S$1.99.
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Automobile – Malaysia
2022 The Best Year So Far
MAA’s Dec 22 TIV recorded 76,657 units (+17.6% mom and +17.5 yoy) as auto players continued to clear backlog orders. Cumulatively, this brought 2022 TIV to 720,658 units (+41.6% yoy). This exceeds our and MAA’s 2022 TIV forecasts of 690,000 and 630,000 units respectively, boosted by the government’s decision to allow registration of new cars until 31 Mar 23. We project 2023 TIV at 550,000 units (-23.7% yoy) due to the end of SST exemption. Maintain MARKET WEIGHT.
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IGB REIT (IGBREIT MK)
4Q22: Within Expectations
IGB REIT posted a strong 4Q22 performance on the back of robust consumer spending amid the festivities. Even with the expected continuation of the decent performance moving forward, our 2023 flattish earnings growth has taken into account rising opex. We opine current share price has priced in the recovery (and potentially less-thanexpected OPR hikes) with forward yield spread to MGS already narrowing to its historical mean. Maintain HOLD. Target price: RM1.75.
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Mapletree Logistics Trust / MLT ($1.61, unchanged) announced its 3Q FY22/23 results and reported that gross revenue for 3Q FY22/23 rose by 8.0% year-on-year (“y-o-y”) to S$180.2 million, mainly due to accretive acquisitions completed in 1Q FY22/23 and FY21/22. In tandem with higher gross revenue, net property income increased by 7.3% y-o-y to S$157.2 million.
MLT’s market cap stands at S$4.8 bln and currently trades at 19.4x forward P/E and 1.1 P/B ratios, with a dividend yield of 5.5%. Consensus target price stands at S$1.73, representing 7.5% upside from current share price. With rising interest rates and limited upside to consensus target price, we remain “neutral” on MLT currently (other challenges include recessionary global economic conditions).
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Suntec REIT / Suntec ($1.37, unchanged) reports distributable income of S$255.5 million for the period from 1 January to 31 December 2022 (“FY 22”), which was 3.4% higher than the
year ended 31 December 2021 (“FY 21”). Distribution per unit (“DPU”) to unitholders of 8.884 cents for FY 22 was 2.5% higher
year-on-year.
Due to the tough and challenging outlook as higher interest rates hurts NPI and DPU as well as recessionary global economic conditions, consensus is negative on Suntec and expects DPU to decline from 8.88 cents to 8.0 cents in 2023, translating to a forward yield of 5.8%. With its PE at a high 20x and consensus
target price of $1.40 implying limited upside potential, we believe investors can afford to “Wait” on the side-lines and look for better
entry levels as fundamentals take a negative turn in the year ahead.
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