The third quarter of 2023 results are in line with market expectations
CICC GLP REIT announced its results for the third quarter of 2023: income at the fund level was 116.75 million yuan, profit before interest, tax, depreciation and amortization was 71.35 million yuan, and available distribution amount was 86.73 million yuan, which was in line with market expectations.
The operation of assets was stable as a whole, and the rental rate rebounded slightly. By the end of September 2023, the overall average rental rate of GLP REIT underlying assets was 88.5%, up 0.9 ppt from the previous month. Among them, the marginal improvement in the rental rate of logistics parks in Tongzhou, Chongqing, Jiangmen Heshan and Zengcheng, which increased 9.3ppt, 7.9ppt, 7.5ppt and 5.3ppt to 46.3%, 71.1%, 100.0% and 100.0%, respectively. The occupancy rates of Qingdao Qianwan Port, Beijing Airport and Suzhou Wangting Logistics Park were marginal under pressure, falling 5.0ppt, 6.9ppt and 11.0ppt to 93.2%, 89.4% and 89.0%, respectively. After considering the area that has signed a lease agreement but has not yet been leased, the occupancy rate reaches n.a., 91.8% and 100.0%. The rent level remains stable, and the effective average unit price of contract rent and property management service fee (excluding tax) at the end of the quarter is 37.7 yuan / square meter / month.
The performance of the fund meets market expectations. In the third quarter of 2023, Jin GLP REIT realized 86.73 million yuan of available distribution, and from the first to the third quarter, it achieved a total of 258.58 million yuan, reaching 83.6% of the manager's forecast in 2023, which is in line with market expectations.
Trend of development
There is a strong certainty that it can be distributed and cashed throughout the year, and the business situation is expected to improve gradually. We believe that the diversified distribution of assets will support the stability of the overall occupancy rate of the project, and there is a strong certainty that it can be allocated and cashed for the whole year of 2023. In addition, according to the quarterly report, managers and external management agencies actively promoted investment promotion during the reporting period. if the area that has signed a lease agreement but has not yet been leased is taken into account, the overall average occupancy rate of the project at the end of the quarter is 90.78%. We believe that the rental of subsequent tenants is expected to improve the business situation.
Profit forecast and valuation
Keep the forecast of available allocation in 2023-2024 unchanged, increase the rating and target price 3.93 yuan. The target price implies 3.35% upside over the current share price, adding 4.85% of the dividend yield over the next 12 months, and we expect the 12-month target total return to reach 8.20%. The current share price of 3.81 yuan trades at 1.0 times P/NAV at the end of 2023, corresponding to 4.4% 2023 dividend yield.
Risk
The rental rate of some assets fell faster than expected, and the valuation of the overall REITs market fluctuated.