DBS Group Research has maintained its "buy" call and $1.88 on Mapletree Logistics Trust M44U , following its set of "resilient" 2QFY2024 earnings that came in within expectations, despite the tough operating environment.
For the three months to Sept 30, MLT, which runs a $12.8 billion portfolio of logistics assets, reported distribution per unit of 2.268, up 0.9% y-o-y, partly helped by divestment gains. This brings 1HFY2024 DPU to 4.539 cents.
If the divestment gain is excluded, MLT's core DPU would be down 5% y-o-y, no thanks to higher financing costs and unfavourable forex.
Nonetheless, DBS continues to like MLT, calling it a "citadel of stability", with weak operating performance in China, a key market, already priced in.
DBS notes that MLT has been "fairly resilient" year to date, with its unit price down 5.7% in 2023, vs FSTREI index dip of c.14%.
At current levels, valuations are attractive at 1.03x P/B and a FY24F-25F yield of 5.8%, which is close to historical mean and close to its peers Mapletree Industrial Trust ME8U and CapitaLand Ascendas REIT A17U .
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"Given the overall market slowdown, we expect increased positioning into sectors that can weather through economic downshifts and MLT remains well placed to deliver attractive total returns at current levels," says DBS.
Separately, OCBC Investment Research has kept its "buy" call on this counter, but with a lowered target price of $1.72 from $1.85 previously.
The 2QFY2024 earnings met OCBC's expectations but with potentially "higher for longer" interest environment, it has raised its cost of equity assumption to 6.6% and lower the terminal growth rate to 1.5%.
