GLP

GLP: Daiwa maintains O/p with TP $3.32. Note that since late August, GLP’s share price has risen strongly, reaching a 12- mth high of $3.13 on 15 Nov. Although the company announced the launch of a US$3b China logistics fund along with its 2Q FY14 results on 14 Nov, believe the rally was probably not related to any expectations about its results. Rather, the buying interest could have been related to the broad reform outlines articulated at the Third Plenum of the 18th CCP Central Committee, which concluded on 12 Nov, and its implications for GLP (China comprised 59% of its NAV [as at 30 Sept13]). With the largest network of modern logisticsproperty space in China (6.2m sq m), GLP is likely to benefit from a restructuring of the economy and a greater role for the market in allocating the country's resources. Overall, the house makes minor revisions to its earnings forecasts to factor in the 2Q14 results. View the China logistics fund announcement positively, as it should help the company to maintain the pace of its market-leading expansion plans while still controlling the investments. In view of the 6% depreciation of the Yen against the US Dollar since October, also our earnings forecasts to incorporate new exchange-rate forecasts of USD1:JPY101 (from 98.5) for FY14 and 103 (from 99) for FY15-16.