It’s the time when companies report their financial results again! On 25 July 2023, Mapletree Logistics Trust announced its first quarter financial result ended 30 June 2023. How will Mapletree Logistics Trust unit price unravel from here? As at 28 July 2023, Mapletree Logistics Trust unit price was trading at $1.73.
For background, Mapletree Logistics Trust is an S-REIT that invests in a diversified portfolio of logistics real estate in Asia Pacific with the aim of providing its unitholders with a stable distribution stream. As at 30 June 2023, it has a portfolio of 193 properties in Singapore, Australia, China, Hong Kong SAR, India, Japan, Malaysia, South Korea and Vietnam with assets under management of S$13.5 billion.
Looking back, the past two years had been nothing short of turbulent for Mapletree Logistics Trust unit price. The mega $700 million equity fund raising in November 2021 had knocked the wind out of Mapletree Logistics Trust unit price. Subsequently, the consecutive 10 interest rate hikes by US Federal Reserve sent the counter to a low of $1.43 in October 2022. Somehow, the S-REIT managed to recover its form since October 2022 and is trading at $1.72 at the point of writing.
I bought 16,000 shares when Mapletree Logistics Trust unit price was trading at $1.96 in November 2021. As I have bought the shares using my SRS account, I intend to hold the shares for the long-term. This means that my intent of holding the shares is for dividend collections. Nonetheless, the sharp drop in MLT share price means that I would need to collect about 1 year of dividends to break-even my capital cost (this is after factoring the dividends collected and assuming the unit price remains at current $1.73 level).
Despite the sluggish form of Mapletree Logistics Trust unit price for the past two years, I have conviction in this S-REIT. This is because I had made money from this counter before. In April 2021, I had bought 40,000 shares at an average price of $1.965 and then cashed out at $2.12 per share. Excluding the distributions, I had made a tiny profit of $6,200. The profit represented 15.5% within the span of three months.
Given the track record, I don’t see why this counter would not recover its form again. It’s only a matter of time that light at end of tunnel will arrive for Mapletree Logistics Trust unit price. The latest financial result provides some interesting data and I will share my insights in this article.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 Mapletree Logistics Trust unit price may be biased.
Mapletree Logistics Trust unit price to sink or swim?
The era of cheap money and ultra-low interest rate is gone. The current high interest rates curtail S-REITs from borrowing aggressively to fund asset acquisitions while many are also cautious to launch equity funding for fear of diluting unit prices further. Against this backdrop, it is interesting to note that in the 1st quarter financial result, Mapletree Logistics Trust [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.]Lifetime Membership
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