Mapletree Logistics Trust (M44U) so bad its good

Lifetime Membership In August 2022, I wrote that Mapletree Logistics Trust (SGX: M44U) returned from coma as the counter surged to a high of $1.81. Yet that bullish run did not last as the unit price bombed out to a low of $1.42 on 21 October. Whilst Mapletree Logistics Trust (SGX: M44U) had managed to climb back to $1.60 in November, the trashy form of the unit price certainly left a bitter taste in investors’ mouth.

Year-to-date, Mapletree Logistics Trust (SGX: M44U) declined by about 13%. The sluggish unit price of Mapletree Logistics Trust (SGX: M44U) was attributed to the lack of buying by institutional investors. For nearly 11 months, Mapletree Logistics Trust did not feature in the SGX Top Ten Institutional Net Buy Stocks.

To be fair to the S-REIT, 2022 has been a difficult year for most stocks as global stock markets suffered endless shelling from the US Federal Reserve’s aggressive interest rate hikes. Many S-REITs and technology stocks had been razed to the ground as investors fled for their lives due to concerns that the soaring interest rates would hurt bottom-line for companies operating in these sectors.

For S-REITS, falling unit price poses a tricky challenge because most of them tend to conduct equity funding to raise capital for acquisitions. Mapletree Logistics Trust (SGX: M44U) is no exception. With plunging unit prices, S-REIT would need to issue more units to fund DPU-accretive acquisitions. In doing so, it would dilute the unit price further, leading to a downward spiral.

The million-dollar question confronting investors right now must be whether Mapletree Logistics Trust (SGX: M44U) will launch another mega equity financing to fund its overseas logistics asset acquisitions. The $700 million equity fundraising in November 2021 to purchase the China, Vietnam and Japan assets had knocked the wind out of the unit price, which never returned to the $2.00 mark prior to the equity fundraising.

MLT unit price (SGX: M44U) looking sexy!

MLT share price met hurricane!

Mapletree Logistics Trust in rock and roll!

Mapletree Logistics Trust in wonderland

Mapletree Logistics Trust (M44U) to hit $2.50?

I had bought 16,000 shares when the unit price was trading at $1.96. As I have bought the units using my SRS account, I intend to hold them for the long-term. This means that my intent of holding the shares is for dividend collection. Nonetheless, the sharp drop in the unit price means that I would need to collect at least 3.5 years of distributions to break-even my initial capital cost (assuming the annual DPU is 9 cents and that the unit price remains at current level).Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I am vested in this counter, so my views on MLT share price may be biased.

Will Mapletree Logistics Trust (SGX: M44U) launch another rights?

At the moment, I am seriously contemplating whether to dollar cost average my investments in Mapletree Logistics Trust (SGX: M44U) as the current unit price is actually very attractive in terms of accumulation.

Assuming forward full-year DPU is 9 cents and assuming that you enter at the current $1.64, the annual DPU yield should be about 5.49%, which is much higher than bank saving rates or Singapore Saving Bonds. In this regard, the falling Mapletree Logistics Trust unit price (SGX: M44U) may provide investors good opportunities to buy the dip.

My biggest concern is whether the S-REIT will [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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