Mapletree Industrial Trust
Hold
OCBC Investment Research | Nov 21 |
Nov 21 close: S$1.47
Fair value: S$1.43
LOOKING ahead, although we project MIT's distributable income to increase at a CAGR (compound annual growth rate) of 4.4 per cent from FY14-FY17 forecast, we expect flat DPU (distribution per unit) growth in FY16 and FY17 after a forecasted 3.2 per cent rise in FY15. This is largely attributed to an enlarged unit base assumption from MIT's Distribution Reinvestment Plan.
We value MIT using the dividend discount model (DDM) and derive a fair value estimate of S$1.43 (cost of equity: 7.8 per cent; terminal growth rate: 0.5 per cent). We believe current valuations are fair, with the stock trading...
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