Global Logistic Properties: -0.9% at $2.16 in thin trade, with investors paying little heed to group's HK$539m (S$91m) acquisition of a 19.9% stake in Shenzhen Chiwan Petroleum Supply Base (200053 CH). The lukewarm response is expected since initial returns are unlikely to be substantial, given SCPSB's 2009 net profit of only Rmb112m (US$16.8m) vs GLP's Sep-quarter US$85.4m earnings…
Citi, which has a Buy call and $2.80 target notes that although the initial NAV/earnings impact does not look significant, cooperation should help the combined group dominate their market share in China; this would make it difficult for potential newcomers, including ProLogis which could re-enter the China market after Feb ‘11, to catch up with GLP's scale in China.
SCPSB owns BLOGIS, which has 12 China logistics projects. Support at last Friday's $2.12 low.
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