Morningstar analyst Xavier Lee has an unchanged FV of $1.60.
For the period, MPACT's revenue of $222.9 million was 6.8% lower y-o-y, while the REIT's net property income (NPI) of $169.5 million was 7/4% y-o-y down.
Accordingly, the REIT reported a 4QFY2025 dividend per unit (DPU) of 1.95 cents, resulting in a FY2025 DPU of 8.02 cents.
On this, Maybank's Krishna Guha writes: "This was largely due to the absence of contribution of Mapletree Anson and lower overseas contribution."
Excluding Mapletree Anson on a same-store basis, Singapore NPI rose 1.4% y-o-y, led by VivoCity. On a full-year basis, revenue and NPI of $908.8 million and $683.5 million came in 5.1% lower y-o-y and 6.1% lower y-o-y respectively.
Meanwhile, portfolio occupancy fell to 89.6% with continued pressure on overseas assets and frictional local vacancies, while MPACT's rent reversion at 3.6% was led by its Singapore assets. Tenant sales were lower for the REIT's Hong Kong and Singapore malls.
On MPACT's balance sheet, gearing in the period came in at 37.7%, while debt cost 3.51% and coverage ratio were stable at 2.8 times.
"In March, MPACT issued a seven-year fixed rate senior green note of $200 million at 3.104%. Debt cost guide is unchanged at 'mid 3.0%'," writes Guha.
On a same-store basis, the REIT's portfolio value rose 2.2% as the higher valuation of its Singapore assets offset declines in overseas properties.
At the same time, cap rates compressed for VivoCity and Mapletree Business City (MBC), and the net asset value (NAV) rose 1.7% y-o-y.
With this, Guha has raised his FY2026 DPU by 1.4% but lowered his FY2027 by 4.9%, with the latter's change mainly due to a lower top-line and higher borrowing cost assumption.
He writes: "While risks persist, we think valuation and proactive asset management cushions them."
Risks noted by him include the non-renewal of anchor leases in China, Japan, MBC and Singapore, weaker reversions in Hong Kong and slower retail sales in Singapore and finally, a higher interest cost.
Meanwhile, UOBKH's Jonathan Koh notes that MPACT benefited from lower utility costs in the period, thanks to the new electricity contract signed after lower tariffs were implemented in November 2024.
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He also highlights that VivoCity, the REIT's "star performer" registered stellar double-digit positive rental reversion of 16.8% in FY2025 and maintained a high occupancy of 99.3% as of March, with tenant sales exceeding $1 billion for the third consecutive year.
This comes despite the ongoing asset enhancement initiative (AEI) of the mall's basement two. Once completed, Koh sees that retail net lettable area (NLA) will increase by 14,000 square feet, and is on track for completion by end-FY2025 and with a projected return on investment (ROI) of 10%.
On MPACT's Hong Kong asset, he writes: "The retail market in Hong Kong faces headwinds from cross-border spending by Hong Kong residents in Shenzhen. Recent weakness of the HKD could moderate leakage from outbound travel."
"Festival Walk has organised impactful marketing campaigns, including high-profile celebrity appearances, to increase footfall. The mall is repositioning towards experiential and lifestyle concepts that appeal to local consumers," adds Koh.
As for Japan, the UOBKH analyst expects occupancy to further decline to 72% in 1QFY2027.
He writes: "Occupancies and rents in the Makuhari sub-market of Chiba, Japan are under pressure. MPACT will re-let the properties to new tenants, explore a potential change of use and pursue divestment opportunities."
Finally, he understands that the REIT's management has cautioned of potential downsizing and non-renewals for its business park property Sandhill Plaza in Zhangjiang serving manufacturing and semiconductor industries.
On this end he notes: "The property is home to a few US companies, which may downsize due to the dismal economic outlook."
Looking forward, Koh sees that MPACT benefits from resiliency and growth of its Singapore properties.
Its VivoCity asset continues to be enhanced and benefits from the recovery in tourism, while MBC should see progressive backfilling of vacant space.
Despite this, he adds that tenants have turned more cautious and cost conscious due to the upheaval from the reciprocal tariffs imposed by the Trump administration.
He writes: "MPACT places strategic focus on preserving occupancy in light of the dismal economic outlook."
As a result, Koh has trimmed his FY2026 and FY2027 DPU forecasts marginally by 1%.
Share price catalysts noted by him include resilient growth from VivoCity and MBC in Singapore, as well as its four Singapore properties located in the HarbourFront area, which accounts for 56.5% of its portfolio valuation.
"It will benefit from the development of the greater southern waterfront and rejuvenation of Sentosa Island and Pulau Brani," concludes Koh.
On the other hand, DBS analysts Geraldine Wong and Derek Tan have lowered their TP on a further weakness in MPACT's occupancy and rents, while rolling forward valuations into the FY2025 and FY2026.
On the REIT's Asia assets, they write: " We anticipate a further bottoming out of performance in north Asia assets, specifically in Japan and China, mitigated by the lessening impact of foreign exchange (forex) translation pressure on overseas income."
Wong and Tan add: "We further lower our reversionary assumptions for North Asia assets and MBC portfolio to reflect lower vacancy in selected assets within China."
Key risks noted by the pair include further rental weakness and vacancy risks in MPACT's portfolio, especially within its overseas assets.
The team at OIR have lowered their FV on a 3.4% decrease in FY2026 DPU, while bumping up their cost of equity assumption from 7.2% to 7.4% given the heightened market volatility and increased uncertainties over the macroeconomic environment, especially for the greater China region.
They add: "MPACT is hopeful of improving the occupancy at MBC as some tenants might look to decentralise to save costs. In terms of trade mix, management sounded more cautious on the shipping and trade sectors amid uncertainties over the trade situation."
Potential catalysts noted by them include higher-than-expected valuation uplift and DPU-accretive acquisitions.
Conversely, investment risks include a slowdown in macroeconomic conditions, acquisitions that do not pan out as well as expected and finally, the non-renewal of leases by key tenants.
Finally, Morningstar's Xavier Lee notes that MPACT's 4QFY2025 results were in-line with his expectations.
He writes: "The trust remains undervalued, trading at an attractive fiscal 2026 dividend yield of 6.7%. We continue to expect VivoCity to underpin the trust's near-term earnings as it navigates multiple headwinds faced by its overseas assets."
Overall, Lee's four-star rating on Morningstar's tier scale indicates that he believes "appreciation beyond a fair risk-adjusted return is likely".
As at 4.30 pm, units in Mapletree Pan Asia Commercial Trustare trading flat at $1.22.
