GLP

GLP: Deutsche notes that the establishment of the US$7b China Logistics Fund II (CLFII) was larger than anticipated. The research house had assumed a US$6b fund with a longer investment period would be established.

To recap, GLP announced the establishment of the opportunistic development together with seven other partners. GLP will hold a 56% stake in the fund that has a total committed equity of US$3.7b. CLFII will develop 13m sqm of logistic space over four years commencing in Apr-16.

The research house sees potential upside to its fee income from FY17 onwards and estimates a potential 3-5% uplift in its FY17-19 earnings estimate. Deutsche feels that the shift into the earnings growth profile, the high growth in its fund management platform as well as the possibility of NAV realisation in the future should see the stock reverse its underperformance. It maintains its Buy call on GLP with a TP of $3.20.