Thursday, 24 April 2014

Mapletree Industrial Trust

UOBKayhian on 24 Apr 2014

Results in-line as MIT focuses on developing alternative growth avenues with two AEIs and a BTS completed in FY14, and another two BTS and an acquisition due to complete over the next three years. Near-term organic growth will emerge from filling vacant space with further upside from expiry of rental caps in 2H14.

Maintain BUY with a marginally higher target price of S$1.66 (from S$1.65), based on DDM (required rate of return: 7.1%, terminal growth: 1.8%). We raise our FY15-16 DPU estimates by 2-3%, factoring in lower interest costs and higher NPI margins, and also introduce our estimates for FY17. Key risks include occupancy risks for older business park space.

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