Quick take: Axis Reit shares up on in line Q2 results

KUALA LUMPUR: Shares in Axis Real Estate Investment Trust (Axis REIT) climbed in early trade after its latest earnings came in within expectations.

The counter added 1.55%, or three sen to RM1.96. It is currently trading at a PE ratio of 19.77 times.

Axis-REIT net property income rose 9.3% to 53.43mil in the second quarter ended June 30, 2021 from RM48.90mil a year ago.

Its revenue also increased 8.8% to RM60.37mil in the quarter compared to RM55.48mil in the corresponding period a year ago.

It also announced a second interim income distribution per unit (DPU) of 2.4 sen, including a non-taxable portion of 0.51 sen, which will be paid on Aug 30.

For the first six months to June 30 (1HFY21), Axis-REIT’s net property income was up by 6.3% to RM103.3mil from RM97.2mil a year ago.

MIDF Research said Axis REIT 1HFY21 core net income of RM63.3mil came in within our and consensus expectations, making up 48% and 45% of the house and consensus full year estimates respectively.

“We make no changes to our earnings forecast for FY21/22F. We remain positive on the earnings outlook for Axis REIT as its asset portfolio mainly consists of industrial assets whereby tenants are still operating amid Covid-19 pandemic.

“Besides, earnings growth is also expected to be contributed by earnings contribution from potential asset acquisitions targets with a total estimated value of RM135mil,” it said.

MIDF has maintained its “buy” call on Axis REIT with an unchanged target price of RM2.04 based on the dividend discount model.

Meanwhile, RHB Research said Axis REIT’s results were broadly in line with expectations, as newly completed acquisitions and commencement of new tenancies supported earnings growth.

“We continue to like Axis REIT for its key positioning as an industrial player that leverages on the e-commerce boom and its strong management team, which is experienced in aggressive acquisitions (current acquisition target value: RM135mil) – allowing it to remain a key defensive play going forward,” it said, adding that it maintained a “buy” call with a target price of RM2.30.

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