Maybank IB Research anticipates stronger earnings in FY24 for Axis-REIT.
PETALING JAYA: Axis Real Estate Investment Trust (Axis-REIT) is expected to post stronger earnings in the financial year 2024 (FY24) backed by new assets contribution, positive rental reversions and stable occupancy rates, say analysts.
According to Hong Leong Investment Bank Research (HLIB Research), Axis-REIT’s ongoing acquisitions pending completion, namely, the hypermarket in Temerloh for RM25.8mil and the manufacturing facility in Sendayan for RM48mil, along with the ongoing construction of Axis Mega DC2, will propel the company’s earnings growth going forward.
This is in addition to contributions from positive rental reversions, as well as stable occupancy rates across its other assets.
Hence, HLIB Research has maintained a “hold” call on Axis-REIT with a target price (TP) of RM1.86.
The research firm also thinks Axis-REIT’s risk-to-reward profile is now balanced. It expects the stock will rise as a result of further successful acquisitions and rising occupancy rates.
Maybank Investment Bank (Maybank IB) Research also anticipates stronger earnings in FY24 for Axis-REIT.
The research house had adjusted its FY24 and FY25 earnings forecasts by 6% and 3% respectively, post-FY23 results.
“This is accounting for the higher financing costs, as well as the new rental from the Axis Mega Distribution Centre’s Phase 2 development, which is anticipated to be ready for tenancy in August 2024 and have a similar rental structure to the Nestle Distribution Centre,” it added
Maybank IB Research has kept a “buy” call on the stock with a TP of RM1.77.
Meanwhile, Kenanga Research said the group may see compounded earnings growth, despite the minimal impact that is foreseen from Axis-REIT’s efforts of seeking and acquiring Grade-A logistics facilities and strategically located manufacturing properties with long lease agreements.
The research house has raised its FY24 earnings on Axis-REIT by 2% as it inputs FY23’s full-year performance, and introduced its FY25 numbers, which reflect a flattish growth from FY24.
Kenanga Research has maintained an “underperform” call on Axis-REIT with an unchanged TP of RM1.58.
