Axis REIT shares up in line with Q2 profit


MIDF Research said Axis REIT’s H1’FY21 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."

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

The counter added 1.04%, or two sen, to RM1.95. Axis REIT’s net property income rose 6.3% to RM103.3mil in the first six months to June 30 (H1’FY21) from RM97.2mil in the corresponding period a year ago.

It also announced a second interim income distribution per unit of 2.4 sen.

MIDF Research said Axis REIT’s H1’FY21 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 Research 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.

Meanwhile, CGS-CIMB Research said it expected Axis REIT’s asset growth strategy for its logistics and warehouse space to be intact for FY21, with unchanged RM135mil worth of acquisitions in the pipeline versus RM267mil for five new assets completed in FY20.

The brokerage retained its “add” call on Axis REIT, with a target price of RM2.44, noting that the current share price level presented a buying opportunity ahead of a recovery in investor appetite for REITs with a resilient portfolio of assets.

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