GLP

GLP: In a company feature by The Business Times, GLP revealed that it was ramping up its growth plans, particularly in China, where there is a big shortage in the supply of quality logistics facilities. Accordingly, GLP has raised its global development start budget for FY15 to US$2.7b (+38%), with US$1.7n set aside for China, US$675m for Japan and US$390m for Brazil, with the group aiming to move ahead of its competitors and capitalize on its market leader position. GLP’s further thrust into China gels in tandem with a recent approval by China’s State Council to develop the logistics industry in the country, with US$2.5t expected to be invested in the industry over the next 15 years, which will see China’s per capita logistics space move to within one-third that of the US. Furthermore, with China now being the number one online retail market in value, GLP expects the e-commerce industry to be a major growth factor for the logistics industry, citing that “the industry has barely scratched the surface”. GLP’s recent 4QFY14 results were at the higher end of estimates, as core proforma net profit (adjusted for J-Reit sale and revaluation gains) jumped 31% y/y to US$54m, taking FY14 core earnings 17% higher to US$250m. Including revaluation gains, proforma net profit for 4QFY14 and FY14 would have come in at US$160m (-8%) and US$685.2m (+31%) respectively. Revenue for the quarter grew 20% to US$150m, mainly attributable to the completion and lease-up of its development projects in China with increasing rents, as well as property management fee income from GLP J-REIT and joint ventures in China and Japan. Going forward, Management remains positive on its prospects, noting that China, Japan and Brazil have attractive supply and demand dynamics for logistics facilities in the medium to long-term. As at end Mar ’14, GLP’s NAV stood at US$1.84, which translates to 1.17x P/B. Overall, the street 12 Buy, 3 Hold and 1 Sell rating with a consensus TP of $3.22.