GLP

GLP: 1QFY15 EPS declined 13% y/y to US3.58¢, from a surge in non-controlling interests following the investment by the Chinese consortium to own a 24.4% stake in GLP China. Revenue climbed 18% to US$169.3m, buoyed by the completion and stabilisation of development projects in China with increasing rents, inclusion of a newly acquired portfolio in Brazil (Jun 2014) and higher dividend income from GLP J-REIT. Core EBIT slipped 5% to US$105.7m due to FX losses and loss on the mark-to-market values of Japanese Yen forward contracts, compared to gains in the previous period. Group development starts spiked 127% to US$883m, led by China (US$643m)- 39% of FY15 target, and Brazil (US$240m)- 48% of FY15 target. NAV/share of US$1.89 ($2.36). Share price of $2.80 is valued at 1.2x P/B and 15% discount to RNAV of $3.30. GLP: Growth momentum in China is expected to continue, after GLP entered a 49:51 JV with China's largest state-owned warehouse logistics provider, China Materials Storage and Transportation Development Company (CMSTD), to develop modern logistics facilities in China. The JVCO will have the right of first look on all future logistics land and the priority right to partner with CMSTD to develop its existing land and facilities. In turn, GLP will invest Rmb2b (US$324m)- 10% discount to last close, for a 15.3% stake in CMSTD to become its second largest shareholder. CMSTD has land resources of 9m sqm in premium locations across China, twice of GLP's land held for development (4.9m sqm).