GLP

GLP: Good set of results, relatively in-line. 1Q rev at $170.5m +32.1% yoy +11.3% yoy -2.3% qoq with net profit at $153.0m +57.2% yoy. Increase was mainly attributable to the completion and stabilization of development projects in China, contribution from Transfar Logistics Base, acquired in Dec 2011. Other areas which contributed to the increase included early termination fee income from a Japan tenant and fee income from Japan JVs. Co also recorded fair value gains of $44.8m in investment properties. Of note rev from China’s operations grew 75.4% to US$56.6m although Japan still contributes approx 66.8% share of revenue. New and expansion leased area in China also grew 38% from last quarter However, GLP’s China operations are growing at a substantial rate. Stabilised lease ratios for China is approx 91% and for Japan, 99%. Even with the expected slowdown in China’s growth, co still expects domestic consumption to remain robust with China’s retail sector growing 14.2% yoy in the first 7 mths of 2012. This should underpin demand for logistics services. CIMB downgrades from Outperform to Neutral with TP $2.48 down from $2.40