SINGAPORE (Aug 1): CIMB Research is maintaining its “add” call on Frasers Logistics & Industrial Trust (FLT) with an unchanged $1.10 target price estimate, after its manager last week declared 3Q results in line with the research house’s estimates.
See: Frasers Logistics Trust beats IPO forecast for fourth straight quarter with 3Q DPU of 1.75 cents
In a Monday report, analysts Yeo Zhi Bin and Lock Mun Yee note that the positive variance versus the trust’s initial public offering (IPO) forecast continued to stem from lower interest savings of 2.8% per annum versus the forecasted 3.4%, whereas its Martin Brower acquisition required lower-than-expected debt.
CIMB is hosting a non-deal roadshow (NDR) for FLT in Kuala Lumpur in the days to come.
A slight upside to their distribution per unit (DPU) estimates and target price can be expected as well, they add, as they have yet to factor in the trust’s proposed acquisition of seven properties in Australia for A$169.3 million from its sponsor.
See: Frasers Logistics acquiring 7 more assets from sponsor for $174 mil
“We note that FLT will be undertaking its first asset enhancement initiative (AEI) since listing. The estimated return of cost for the AEI at Stramit is 8.95%,” say Lock and Yeo.
Update: Units of FLT closed 1 cent lower at $1.08.
