Company Name: GLOBAL LOGISTIC PROP LIMITED
| Research House: Nomura | Price Call: BUY | Target Price: 2.80 |
Nomura downgrades Global Logistic Properties to Neutral from Buy. “Notwithstanding GLP’s leading market share in China and Japan where we remain sanguine on demand for high quality logistics space, further upside to the current share price in the near term is likely to be more modest.”
It adds, one of the reasons for the stock’s outperformance is the potential monetisation of Japan assets; the house estimates spinning off 30% of GLP’s Japan assets into a property fund would add US$0.07/share to NAV.
Nomura raises its target to $2.80 from $2.48 after rolling its valuation forward to FY14, ascribing a 15x P/E multiple to the fund-management business, vs 10x previously, and imputing a 5% NAV premium, vs parity previously, on potential accretion from any asset-monetization exercise.
The house tips possible upside risks from better-than-expected gains from any asset-monetisation or a higher-than-expected dividend payout, with potential downside risks if logistics-space demand is below expectations, especially in China, where most of GLP’s growth is projected. The stock is flat at $2.51.
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