MPACT Earnings: Performance Anchored by VivoCity as Overseas Headwinds Persist

Mapletree Pan Asia Commercial Trust’s first-quarter fiscal 2025 (ending March) results were below our expectations. Distribution per unit fell 4.1% year on year, mainly due to lower contributions from its China and Japan portfolios suffering from market and currency headwinds. We updated our currency and leasing assumptions for its China, Japan, and Hong Kong assets to account for the weak results. Consequently, we cut our fair value estimate to SGD 1.68 per unit from SGD 1.74, while we lowered our fiscal 2025-27 DPU estimates by 4.1%-5.1%. Based on the last closing price, the trust trades at an attractive fiscal 2025 dividend yield of 6.8%. Although we think the units are undervalued, the unfavorable demand and supply market dynamics for its China, Japan, and Hong Kong portfolio will likely weigh on its unit price performance in the near term.