Highlights

Kenanga Research & Investment

Author: kiasutrader   |   Latest post: Thu, 3 Dec 2020, 8:42 AM

 

KLCCP Stapled Group - 1QFY20 Within Expectations

Author:   |    Publish date:


1QFY20 RDI of RM176m came in well within our and consensus estimates, at 26% and 24%, respectively. 1QFY20 NDPS of 7.71 sen is also within our estimate (at 23%). Maintain FY20-21E RDI of RM673-734m, driven by organic growth on flattish to low single-digit reversions. Maintain MP but on a higher TP of RM8.10 (from RM7.45) and an implied FY20E net yield of 4.1%.

1QFY20 realised distributable income (RDI) of RM176m is well within our and consensus estimates, at 26% and 24%, respectively. 1QFY20 NDPS of 7.71 sen (3.28 sen single-tier dividend plus 5.84 sen subject to 10% withholding tax), also met our FY20E NDPS of 33.2 sen (at 23%) implying 4.2% net yield.

Results’ highlight. YoY, top-line was flat as: (i) office segment saw no changes, (ii) retail segment was slightly better (+3%) on improved occupancy, and (iii) management services segment improved (+24%), but heavily negated by decline in the hotel segment (-34%). All in, RDI was down by 4% on higher operating cost (+9%) and higher interest expense (+3%). QoQ, top-line was down by 3% due to weakness in the hospitality segment (-46%) while other segments were positive such as office (+1%) and retail (+2%), and the management services segment (+16%). All in, RDI was down by 6% on the back of lower interest income (-24%) and lower associate contribution (-23%).

Outlook. Phase 3 of Menara Dayabumi is expected to comprise a 60- storey tower of mixed development, consisting of retail, office and hotel spaces. Phase 3 is still in the tendering process as management focuses on securing an anchor tenant before proceeding with the development.

Maintain FY20-21E CNP of RM673-734m with forward earnings to be driven by organic growth and flattish to low single-digit rental step-ups. We make no further changes to earnings in spite of the MCO for now as we had previously lowered earnings by 9-2% in FY20-21E due to potential loss of income from the retail and hospitality segments, while the office segment remains stable for now. FY20-21E NDPS of 33.2- 36.2 sen imply 4.2-4.6% net yields.

Maintain MARKET PERFORM but on a higher TP of RM8.10 (from RM7.45) post lowering our 10-year MGS target to 3.30% (from 3.70%), but our FY21E GDPS/NDPS of 38.6 sen/36.2 sen and yield spread of (+1.5ppt (@+1.5SD) remain unchanged. Our applied spread is within range among MREITs under our coverage (of +1.0 to +2SD) given uncertainties arising from the Covid-19 pandemic. We favour KLCC’s premium asset quality profile, and triple-net-lease (TNL) structure, and believe it will continue to be a favorite among institutional investors as it is one of the few Shariah-compliant MREITs.

Risks to our call include: (i) bond yield compression/expansion, (ii) higher-or-lower-than-expected rental reversions, and (iii) stronger-or weaker-than-expected occupancy rates.

Source: Kenanga Research - 6 May 2020

Share this

Related Stocks

Chart Stock Name Last Change Volume 
AXREIT 2.06 +0.04 (1.98%) 3,774,100 
CMMT 0.625 +0.015 (2.46%) 782,400 
IGBREIT 1.70 +0.01 (0.59%) 2,096,700 
KLCC 7.60 -0.06 (0.78%) 323,400 
MQREIT 0.89 +0.02 (2.30%) 272,700 
PAVREIT 1.52 0.00 (0.00%) 879,300 
SUNREIT 1.51 0.00 (0.00%) 1,755,800 
YTLREIT 0.875 +0.015 (1.74%) 499,600 
ALAQAR 1.35 +0.04 (3.05%) 14,800 
ARREIT 0.63 0.00 (0.00%) 462,100 
AMFIRST 0.42 0.00 (0.00%) 1,091,300 
HEKTAR 0.56 +0.005 (0.90%) 520,300 
TWRREIT 0.565 -0.015 (2.59%) 361,400 
UOAREIT 1.17 0.00 (0.00%) 178,900 
ATRIUM 1.13 0.00 (0.00%) 27,000 
ALSREIT 0.65 +0.065 (11.11%) 119,000 
KIPREIT 0.80 0.00 (0.00%) 199,800 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
View candlestick stock charts with Technical indicators
MQ Affiliate
Be rewarded by being an MQ Affiliate
 
 

793  394  531  415 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 YONGTAI 0.295+0.125 
 SAPNRG 0.12+0.005 
 BINTAI 1.14+0.295 
 TOPBLDS 0.13+0.045 
 KANGER 0.175+0.005 
 ARMADA 0.355+0.035 
 KNM 0.21+0.005 
 TRIVE 0.0150.00 
 AT 0.185-0.01 
 AGES 0.145+0.02 

FEATURED POSTS

1. The Equity Market Index Benchmark in Malaysia CMS
2. Trading Scenarios of Derivatives Bursa Derivatives Education Series
3. Derivatives 101 Bursa Derivatives Education Series
4. Why Trade FKLI? Bursa Derivatives Education Series
5. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!
PARTNERS & BROKERS