KUALA LUMPUR: Maybank Investment Research has maintained its hold call and target price of RM1.55 on Axis REIT as 2Q18 results and dividend came in-line with expectations.
Axis REIT's 2Q18 net profit grew 4% on-year and 3% on-quarter to RM24.4mil, bringing 1H18 core earnings to RM48.1mil.
"Results were largely within estimates due to the expected additional rental income from Nestle DC @ Axis Mega Distribution Centre from 3Q18 onwards, along with the anticipated acquisition of 2 other manufacturing facilities in Johor in 4Q18," said Maybank.
"We believe 2Q18’s core earnings were mainly driven by (i) new assets contributions (i.e. Wasco Facility @ Kuantan, Kerry Warehouse and industrial property in Shah Alam), (ii) sustained portfolio occupancy rates and (iii) positive rental reversions at selected properties.
"2Q18 earnings, however, was also partly mitigated by steeper interest costs due to higher drawdown of debt for acquisitions."
Maybank said its FY18-20 forecasts are intact with near-term earnings growth estimate largely supported by the injection of new assets, particularly Nestle DC @ Axis Mega Distribution Centre with anticipated rental income contribution from 3Q18 onwards.
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