MIDF raises target price on Axis REIT on improved growth prospects


KUALA LUMPUR: MIDF Research has revised higher its target price for Axis Real Estate Investment Trust (REIT) on the back of better growth prospect for its industrial asset portfolio.

The research house raised its target price to RM2.04 from RM1.98 as it increased the terminal growth rate to 2% from 1.8% in its dividend discount model.

"Outlook for Axis REIT remains stable as its portfolio of industrial assets are relatively shielded from Covid-19 pandemic," it said in a note, while reiterating its "buy" call.

On a recent development, MIDF expects limited earnings impact from Axis REIT's acquisition of an industrial property in Pasir Gudang, Johor, from Xin Hwa Trading & Transport Sdn Bhd for RM75mil.

It maintained its earnings forecast for FY21/22 with earnings impact anticipated to come under 1%.

With the proposed acquisition funded by existing bank borrowing, MIDF said the gearing of Axis REIT is expected to climb to 0.29x from 0.37x post the asset acquisition.

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MIDF Research , Axis REIT

   

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