CIMB in a Nov 29 research report says: "GLP is the largest modern logistics provider in Asia, with the largest GFA (sq m) in China and Japan. We estimate that core EBIT will rise by 29% to US$520 million by FY14 vs. FY11, backed by stable rents in Japan and a growing portfolio in China.
"Operating cash flows are expected to cover known capex needs; a high cash conversion rate (short development cycle) allows available surpluses to be swiftly redeployed for new investments. A low net gearing of 0.3x implies additional investment capacity of US$1.7 billion, by our estimates.
"Target price/RNAV of $2.24. It trades at a 20% discount to RNAV and at more attractive multiples than its logistics peers. OUTPERFORM (initiating coverage)."
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