Company Name: GLOBAL LOGISTIC PROP LIMITED
| Research House: Religare Capital | Price Call: HOLD | Target Price: 2.61 |
Religare is neutral on GLP’s plan to team up with Singapore and China sovereign wealth funds and Canada Pension Plan Investment Board to buy Brazil properties worth US$1.45 billion ($1.77 billion); GLP is funding its portion with a share placement.
“Brazil investments are minimally accretive (+2.3% to RNAV), but placement of shares could signal share being fully-valued, given US$1.4 billion cash on balance sheet and low 24% net debt/assets. Moreover, investors’ unfamiliarity with Brazil could be an overhang.”
The house notes the stock is up around 55% year-to-date. It raises its target to $2.61 from $2.46 after rolling forward to par with end-2013 RNAV and incorporating recent divestments and investments. The house says 1H13 core net profit of US$181 million, up 27% on-year, was in line with expectations. It keeps a Hold call. The stock is down 3.3% at $2.63.
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