GLP

GLP: Strong set of 3Q13 results, in-line with bullish estimates. Rev at US$174m, +20% yoy and net profit at US$113m, +31% yoy. Result brings 9M13 rev to US$517m, +25% yoy and net profit to US$460m, +20% yoy. Strong results driven by lease-up of dev projects and rent growth in China. Rev in China at US$68m, +64% yoy, while Jap rev at US$105m, +1% yoy, as strong fee income growth was offset by the recent depreciation in the Jap Yen. Bottom-line was also boosted by fair value gains from development completions and rent growth in China. Overall fundamentals remains strong, with China’s lease ratio at 90% and rent growth +8.7% yoy, while dev starts in China increased significantly to 850 sqm, +240% yoy. In Japan, the lease ratio remains high at 98%. Going forward, grp note of new opportunities in Brazil, citing that it has partnered with Canada Pension Plan Investment Board (CPPIB), China Investment Corporation and GIC in 2 JV to establish the largest logistics platform in Brazil for US$1.45b. GLP is the asset manager of the two JVs. Going forward, grp remains confident of prospects, noting that demand remains strong in all of its markets. China is seeing growth in domestic consumption, particularly in e-commerce, coupled with a backdrop of continued urbanization. House have seen significant growth in fund fees in Japan, reflecting the strong demand for its modern facilities. Brazil is a fast-growing, underserved market with compelling opportunities for future growth. We note that at current price, grp trades at 1.3x P/B. Ratings as follow: CIMB maintains O/p with $3.06 TP Nomura maintains Neutral with $2.80 TP