Daiwa upgrades GLP to Outperform vs Hold

Stock Name: GLP
Company Name: GLOBAL LOGISTIC PROP LIMITED

Research House: Daiwa

Price Call: BUY

Target Price: 3.09

Daiwa upgrades Global Logistic Properties (MC0.SG) to Outperform from Hold and raises its target price to $3.09 from $2.70, after using a new model to value the warehouse developer.

Believing that the across-the-board NAV approach undervalues GLP’s development business, the house now values GLP’s stable capital--backed by matured assets--at parity to book value while valuing its high-growth development portions at a higher P/B ratio of 2.51 times, which better “reflects the expected returns and hurdle rates.”

Daiwa says it upgraded ratings because “we believe [GLP] is only at the early stage of realizing the potential of its development model, and think its unwavering focus on developments paves the way for strong EPS growth from FY15.”

The stock is up 0.7% at $2.74.