In a note, the research firm said improvement in the final quarter of the year will be underpinned by the usual year-end demand and approaching festivities while the opening of interstate travel has seen a higher volume of traffic in both the Northern and Southern regions.
"Better product mix (or higher food line composition) especially in Malay-centric areas are seeing fruit as retail footfalls recovers from the lockdown," it said.
However, the property management services are expected to lag behind.
Despite the year-to-date occupancy rate of 81% being expected to reach 90% by year-end, revenue might be slow in trickling in given the new rent structure, said Kenanga.
In the recent Q3, Aeon recorded a disappointing performance on the back of the prolonged closures from the movement control order directives.
The group registered loss after tax after minority interest (Latami) of RM19mil, which brought 9MFY21 earnings to RM14mil, which was 21% and 17% of Kenanga's and consensus full-year estimates respectively.
Retail revenue fell 16% to RM2.24bil, although more positively, Kenanga noted that retail margins were contained while prudent management saw profit after tax after minority interest (Patami) remaining flat.
Property Management Services fell in tandem at 16% to RM393m, partly due to the new rent structure – variable rent payments via sales commission – as tenants sales nose-dived due to closure of malls pursuant to the HIDE and MCO directives.
Kenanga maintained "outperform" on the stock but lowered its target price to RM1.60 from RM1.80, pegged to its five-year mean of 22 times.