Analysts from CGS-CIMB Research, DBS Group Research, Maybank Kim Eng, OCBC Investment Research (OIR) and UOB Kay Hian have all maintained their “add” or “buy” calls on Mapletree Industrial Trust (MINT).
With the exception of OCBC which has kept its fair value estimate of $3.41, the rest of the analysts have upped their target price estimates.
To the research team at OCBC, the REIT’s 1QFY2022 results stood in-line with its expectations.
Distribution per unit (DPU) in the 1QFY2022 grew 16.7% y-o-y to 3.35 cents, which accounted for 25% of its FY2022 forecast.
CGS-CIMB analysts Lock Mun Yee and Eing Kar Mei have upped their target price on the REIT to $3.16 from $3.05 previously. They have also lowered their DPU estimates for the FY2022 by 1.7% due to the possibility of tenant rental reliefs. On the other hand, Lock and Eing have raised their DPU estimates for the FY2023 to FY2024 by 2.5% to 3.7% to factor in the divestment gains from the completion of the sale of 26A Ayer Rajah Crescent.
“With an estimated post [US] acquisition gearing of 40%, we believe MINT is well-placed to continue to tap into acquisition growth opportunities. Meanwhile, the redevelopment of Kolam Ayer Cluster 2 is under way and is
scheduled to be completed in 1HFY2023,” write the analysts.
To DBS analysts Derek Tan and Dale Lai, MINT is fast becoming a play for the data centre sector.
The REIT, with its long weighted average lease expiry (WALE) and compound annual growth rate (CAGR) of 7% in terms of DPU over FY2022 to FY2023, should “continue to trade like a data-centre proxy”, note the analysts.
On this, Tan and Lai have upped their target price estimate on MINT to $3.35 from $3.25 previously.
The new target price has not assumed acquisitions in the estimate, but it does assume a target yield of close to 4.0%.
“We like its improved earnings visibility of 7.0% CAGR anchored from acquisitions and the completion of planned developments. In addition, we see debt funded capacity to pursue growth in the data centre space will keep valuations at a premium,” they write.
“We believe investors have not priced in the value in MINT’s portfolio. The redevelopment of its land bank of older flatted factories will drive portfolio gross floor area (GFA) and medium-term growth in distributions and net asset value (NAV), keeping valuations at a premium,” they add.
Maybank Kim Eng’s Chua Su Tye has increased his target price to $3.35 from $3.24. He has also raised his DPU estimates by 3% to 4% amid the REIT’s 1QFY2022 results.
“[We] see further DPU-accretive deals, as management advances diversification efforts to deepen data centre concentration to 50-67% of assets under management (AUM),” writes Chua.
“We forecast data centres in Singapore and the US to generate 59% of MINT’s net property income (NPI) in FY2022, up from 31% in FY2020,” he adds.
Compared to the other analysts, UOB Kay Hian analyst Jonathan Koh has upped his target price estimate slightly to $3.63 from $3.62 previously as MINT’s results for the 1QFY2022 stood in line with his expectations for the FY2022 as well.
“MINT’s hi-tech buildings, business park buildings and flatted factories are less affected by the Covid-19 pandemic and rental relief is not expected to be substantial. Acquisition of the remaining 50% stake in
13 data centres in North America (second JV) could materialise in 2HFY2022,” he writes.
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Units in MINT closed 3 cents lower or 1% down at $2.97 on Aug 2, or 1.1 times P/NTA, according to Maybank Kim Eng’s estimates.
Photo: MINT
