KUALA LUMPUR: Maybank Investment Bank Research has maintained its Hold rating and reduced its FY17-19 earnings forecasts on CapitaLand Malaysia Mall Trust by 4% to 8%.
It also reduced its target price to RM1.50 owing to Q3FY17 results that fell short of expectations.
"Earnings were largely impacted by negative rental reversions and Sungei Wang Plaza and higher opex at several assets," the research firm said.
Core net profit for Q3FY17 was RM40.1mil, which brought 9MFY17 core net profit to RM120.2mil.
Maybank IB Research said the earnings were impacted by negative rental reversions at Sungei Wang Plaza and higher opex at the same building and The Mines.
However, its portfolio's (MFY17 retails sales growth was a decent 2% y-o-y and Q3FY17 q-o-q earnings were up owing to marginal improvement in occupancy rates at selected malls.
"We remain cautious on Sungei Wang Plaza’s near-term earnings outlook as rental rates continued to be affected by limited shopper traffic growth while the positive impact post the opening of KVMRT 1 line (17 Jul 2017) would take a longer time to be realised," said Maybank IB Research.
Sungei Wang saw a significant improvement in footfall following the opening of the KVMRT 1 line, it noted.
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