GPT Group

This report is an updated version of the report published on the 16 February 2023 at 3:55 PM (GMT+11)

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

GPT Group (ASX: GPT) is an Australia-based vertically integrated diversified property company that owns and manages a portfolio of Australian office, logistics and retail assets. The company leverages its real estate management platform to enhance returns through property development and funds management.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~44.33% of the total shareholding. UniSuper Limited and Vanguard Investments Australia Ltd. are holding a maximum stake in the company at ~16.30% and ~6.37%, respectively.

1.4 Key Metrics: The company reported an improvement in operating margin in 1HFY22 to 63.6% compared to 56.3% in 1HFY21. Further, the current ratio increased to 0.43x in 1HFY22 relative to 0.41x in 1HFY21. Below is captured the trend of the gross margin and EBITDA margin:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Results Highlights of 1HFY22: Across the three segments (Retail, Office & Logistics), the total portfolio size during 1HFY22 was around AUD 16.40bn with a long-weighted average lease expiry of 4.7 years and an occupancy of 97.5%.

2.3 Operational Update: The company continues to grow its Fund Management platform with the transition of AUD 2.8bn fund of UniSuper and AUD 2.6bn transition of management of AMP Capital Retail Trust (ACRT) portfolio to GPT.

2.4 Dividend History: The company declared a dividend of AUD 0.1230 during FY22, which was recorded on 30 December 2022 and has a payment date of 28 February 2023.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock has witnessed a rise of ~9.95% in 3 months and over the last 9 months, it has decreased by ~1.04%. The stock has a 52-week low and 52-week high of AUD 3.680 and AUD 5.270, respectively and is currently trading slightly above the average of 52-week high-low average

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 16, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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