CIMB Research downgraded Mapletree Industrial Trust , which owns factories and other industrial assets, to ‘neutral’ from ‘outperform’, citing limited upside and lower distribution per unit estimates, but raised its target price as it applied a lower discount rate.
The brokerage raised its target price on the stock to S$1.31 from S$1.24.
By 0210 GMT, units of Mapletree Industrial were up 0.8 percent at S$1.245. They have risen 16 percent so far this year, compared with the FT ST Real Estate Investment Trust’s 21 percent rise.
Mapletree Industrial said its distribution per unit for April-June rose 14 percent to 2.26 Singapore cents, in line with CIMB’s estimates.
Mapletree’s current valuation at 1.2 times price-to-book value has priced in growth potential as organic growth is expected to moderate, with more resistance to rental increases likely in the current climate, CIMB said.
Higher asset leverage could also limit inorganic growth through debt-funding, the brokerage added.
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1017 (0217 GMT) (Reporting by Charmian Kok in Singapore; email@example.com)