If the divestment gain is excluded, MLT's core DPU would be down 5% y-o-y, no thanks to higher financing costs and unfavourable forex.
Nonetheless, DBS continues to like MLT, calling it a "citadel of stability", with weak operating performance in China, a key market, already priced in.
DBS notes that MLT has been "fairly resilient" year to date, with its unit price down 5.7% in 2023, vs FSTREI index dip of c.14%.
At current levels, valuations are attractive at 1.03x P/B and a FY24F-25F yield of 5.8%, which is close to historical mean and close to its peers Mapletree Industrial Trust and CapitaLand Ascendas REIT .
See also: UOBKH raises TP on SIA to $6.22, FY2026 earnings to see lift on fuel cost savings
"Given the overall market slowdown, we expect increased positioning into sectors that can weather through economic downshifts and MLT remains well placed to deliver attractive total returns at current levels," says DBS.
Separately, OCBC Investment Research has kept its "buy" call on this counter, but with a lowered target price of $1.72 from $1.85 previously.
The 2QFY2024 earnings met OCBC's expectations but with potentially "higher for longer" interest environment, it has raised its cost of equity assumption to 6.6% and lower the terminal growth rate to 1.5%.
