Mapletree Logistics Trust Analysis @ 28 July 2020

Basic Profile & Key Statistics

Mapletree Logistics Trust (MLT) listed on 28 July 2005, which is just nice 15 years ago. MLT invests in logistics properties in various countries like Singapore, Hong Kong, Japan, China, Australia, South Korea, Malaysia, and Vietnam. MLT is sponsored by Mapletree Investments Pte Ltd.

Lease Profile

Both occupancy of 97.2% and WALE of 4.3 years are at healthy level. The highest lease expiry of 24.2% falls in FY21/22. Income in SGD/major currencies is low at 53.7%., which means around 46.3% of income received in non SGD or major currencies. Weighted average land lease expiry is short at 51.41 years.

Debt Profile

Gearing ratio is slight high at 39.6%. Cost of debt is low at 2.3% despite high 90.5% of unsecured debt. Interest cover ratio is high at 4.8 times. WADE of 4 years is long and its highest debt maturity of 22% falls in FY24/25.

Diversification Profile

MLT is very diversified in terms of geographical, property, and tenants. Its top geographical and top property contribute 35.6% and 10.4% respectively. Where its top tenant and top 10 tenants contribute 8.9% and 27.9% respectively.

Key Financial Metrics

Property yield of 5.5% is the SREITs median level, its distribution on capital of 3.8 % is slightly higher than SREITs median level. MLT management fee is at the high side where unitholder receive S$ 5.43 for every dollar paid. Distribution margin of 58.8% is high. Around 3.2% of distribution is from distribution from asset disposal.

Related Party Shareholding

Both sponsor and REIT manager hold a significant stake in MLT while directors of REIT manager shareholding is low.

Trend

All DPU, NAV per unit and distribution are on uptrend, which is very solid .

Fundamental Valuation

Favorable	Less Favorable
Cost of Debt	Income in SGD/Major Currencies
Unsecured Debt	Weighted Average Land Lease Expiry
Interest Cover	Management Fees
WADE
Well Spread Debt Maturity
Top Geographical Contribution
Top Property Contribution
Top 10 Tenants Contribution
Distribution Margin
DPU Uptrend
NAV per Unit Uptrend
Distribution Margin Uptrend

Based on the above table, it is very obvious that MLT fundamental is good. 

Relative Valuation

i) Average Dividend Yield

Apply past 4 quarters DPU of 8.162cents to average value of 6.27% will get S$ 1.30.

ii) Average Price/NAV 

Apply NAV of S$ 1.205 to average value of 1.16 will get S$ 1.40.

Author's Opinion

Solid fundamental is all I could say for MLT. In fact, other Mapletree family REITs are doing well too except for Mapletree North Asia Commercial Trust which is laggish due to Hong Kong situation. For valuation: 

i) Fundamental Intrinsic Value = (Removed)

ii) Relative Valuation - Dividend Yield = S$ 1.30

iii) Relative Valuation - Price/NAV = S$ 1.40

At the current price of S$ 2.11, it looks overvalued. Should we buy a wonderful company at wonderful price? 

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Please always do your own due diligence before any decision is made.