Saturday, July 25, 2009

Mapletree Logistics by DBS and CIMB

Source: remisiers by DBS
Analyst:
Derek TAN +65 6398 7966
derektan@dbsvickers.com

MunYee LOCK +65 6398 7972
munyee@dbsvickers.com
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Source: remisiers by CIMB
Analyst: Janice Ding +(65) 6210 8609 – janice.ding@cimb.com
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Despite the name Logistics, it is a REIT with portfolio used for logistics.

DBS Valuation Method:
Maintain BUY, TP S$0.70. Current price at 0.7x P/BV is in line to its smaller industrial peers is attractive. With a strong sponsor support and a S$3.0bn- unencumbered portfolio, MLT offers a potential for growth, on top of a stable FY09F-10F prospective yield of 10%. Base on increased earnings and a slight
lowering in equity risk premium (-50bps to 7.0% WACC).

CIMB DBS Valuation Method:
Maintain Neutral and target price of S$0.62. We maintain our estimates and
DDM-derived target price of S$0.62 (discount rate 9.4%). Although the pressure to
maintain occupancy and rents remains, we are encouraged by its relatively high
tenant retention rate of 80% and success in securing refinancing at lower interest
rates. We believe MLT will be able attain our forecast distribution for FY09.

Action:
Just reading how valuation are made

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