Mapletree Logistics Trust Earnings: In Line; Currency Headwinds Persist; Units Fairly Valued

Mapletree Logistics Trust continues to face currency headwinds, with its fourth-quarter fiscal 2023 (ending March) revenue and net property income declining for the third consecutive quarter by 0.7% and 1.8% respectively, on a quarter-on-quarter basis. However, distribution per unit grew 1.8% quarter on quarter due to partial distribution of the gains from the divestment of 3 Changi South Lane. As the results were in line with our expectations, we retain our fair value estimate of SGD 1.66, after rolling forward our model and fine-tuning our assumptions. We expect fiscal 2024’s DPU to decline 3% year on year to SGD 0.0861 due to continued currency headwinds, higher cost of borrowing, and weaker leasing performance for its China portfolio. This implies a fiscal 2024 dividend yield of 4.9% based on its last closing price of SGD 1.75. In our view, the trust is fairly valued presently, and we encourage investors to wait for a better entry point.