Mapletree Logistics Trust share price lost its way

October 27, 2024 sgwealthbuilder 409 Views 0 Comments

Lifetime Membership As we approach the end of the year, its time to review the performance of Mapletree Logistics Trust share price. And the diagnosis doesn’t look good. The latest financial result – 2QFY24/25 – confirmed my suspicion that the new CEO has her work cut out as distribution per unit (DPU) plunged 10.6% year-on-year to 2.027 cents.

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 September 2024, it has a portfolio of 186 properties in Singapore, Australia, China, Hong Kong SAR, India, Japan, Malaysia, South Korea and Vietnam with assets under management of $13.4 billion.

The latest DPU is the lowest since 2QFY19/20, underscoring the magnitude of the fallout from the China economic struggles, high interest rates and depreciation of regional currencies against the Singapore dollar. Gross revenue for the latest quarter dropped by 1.8% year-on-year to $183.3 million, and net property income fell by 2.1% y-o-y to $158.6 million.

On the basis of the latest financial performance, it seems that Mapletree Logistics Trust share price is destined for another bout of turbulence. Year-to-date, Mapletree Logistics Trust share price has crashed by nearly 20%. The Fed’s first jumbo rate cut in September has stimulated the counter and led to a mini-rally as Mapletree Logistics Trust share price surged from $1.26 on 12 August to $1.50 on 2 October. But the counter was brought back to Earth by the latest result.

The problem for Mapletree Logistics Trust share price is that the latest financial performance could provide a golden opportunity for short-sellers to make a killing. Short-selling volume for this volume swelled to a whopping 13.9 million units on 25 October and 9.8 million units on 24 October. The short-sellers had a field day as Mapletree Logistics Trust share price buckled under the short-selling attacks.

Question now is: will Mapletree Logistics Trust share price be able to fight back and stage a return amid a potential interest rate cut in November? On 20 September, I had taken a small position (2000 units) of Mapletree Logistics Trust at $1.42 per unit. Do I have any regrets? Not really as I had bought 16,000 units at average price of $1.96. The latest purchase was initiated with a view of dollar-cost averaging my initial investment and not for the purpose of making a quick flip.

The coming November will be an interesting month due to the US Presidential election and the US Federal Reserve meeting. These events could have a bearing on Mapletree Logistics Trust share price and I see possibility of more opportunistic buys for this counter. However, I am not the sort of long-term S-REIT investors who will blindly pumped in more monies based on the company brand. For Mapletree Logistics Trust, I would like to see how the new CEO – Jean Kam – is going to turn the S-REIT around.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 share price may be biased.

Danger lurks for Mapletree Logistics Trust share price

Despite the potential tailwind from the US Fed interest cut in November, I am gravely concerned that Mapletree Logistics Trust share price could face massive turbulence in the coming months due to [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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