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Mapletree Logistics Trust - Sluggish growth expected

StockFanatic
Publish date: Sun, 20 Oct 2013, 09:11 PM
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As the M&A-driven growth tapers off, the earnings outlook for MLT appears less sanguine. More than 90% of its distributable income is hedged, shielding MLT's earnings from the yen volatility, but this alone is not a compelling reason to buy the stock.

MLT's 2QFY14 results were in line with consensus and our expectations, with this quarter's DPU accounting for 25% of our full-year forecast and 1HFY14 DPU comprising 50%. Given the lack of growth catalysts (after factoring in the S$150m acquisitions in FY14), we downgrade MLT, based on valuation, to Underperform, with an unchanged DDM-based (discount rate of 8.1%) target price.
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