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Global Logistics Properties

Global Logistics Properties. 24 November 2016. #1 – Business model. #2 – Consistent revenue and profits. #3 – Reasonable net debt to equity (34%). #4 – Consistent dividends. #5 – Positive OCF and FCF?. Positive operating cash flows

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Global Logistics Properties

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  1. Global Logistics Properties 24 November 2016

  2. #1 – Business model

  3. #2 – Consistent revenue and profits

  4. #3 – Reasonable net debt to equity (34%)

  5. #4 – Consistent dividends

  6. #5 – Positive OCF and FCF? • Positive operating cash flows • But spending a lot on investing (and therefore negative FCF – but FCF may not be relevant) • And getting cash from financing (either debt or sale of stakes in associates)

  7. #6 – Alignment of interest – CEO has low stakes • CEO Ming owns about 49m shares (~1% of total 4,732m shares)

  8. #6 – Alignment of interest – Variable compensation • CEO’s compensation – USD 9.4 million per year • Fixed component 13% • Variable component 38% • Equity component 48%

  9. GIC is majority shareholder – 37%

  10. #7 – P/B at historical low! (concerns of China oversupply, but mainly 2nd tier cities - GLP has low exposure) • Current P/B (as at 23 Nov 2016): 0.74 -> 1.0 = 35% upside

  11. Quality of book value (assets) • 80% of assets are investment properties (68%) and associates & JV (12%)

  12. Risk from write down of assets is not substantial • Only one major write down in the past 6 years • Write down of about 5% of net book value • Minimal risk in my opinion (since my MOS is 26% - P/B of 0.74)

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