PETALING JAYA: A strong tourism momentum will provide better earnings for KLCCP Stapled Group’s retail and hotel segments, according to Hong Leong Investment Bank (HLIB) Research.
The research house noted the results of the group, which consists of KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust, were within its and consensus expectation.
The company registered a 7.4% increase in its top line, driven mainly by stronger performance in the management services segment.
HLIB Research said for FY26, it estimated a low single-digit earnings growth, supported by stable office income, underpinned by long-term leases and resilient retail as well as hospitality performance amid improving tourism demand.
“For FY26, office occupancy and revenue should remain supported by long-term leases. Meanwhile, Suria KLCC is expected to sustain strong footfall, while Mandarin Oriental should continue to record firmer occupancy, with both benefitting from the Visit Malaysia 2026 campaign and the Malaysia–China mutual visa exemption programme,” the research house noted.
HLIB Research maintained a “hold” call on the group with a target price (TP) of RM8.32 a share, anchored on FY26 distribution per unit and an unchanged targeted yield of 5.3%, benchmarked from the five-year mean yield spread between KLCCP and Malaysia 10-year government bond yield.
However, it added that positives for KLCCP have been largely priced in, leaving the group with a balanced risk-reward profile.
Meanwhile, Maybank Investment Bank Research (Maybank IB) also maintained a “hold” call on KLCCP due to its defensive earnings and predictable cash flows.
However, lower-than-expected financing costs led the research house to lift the group’s TP to RM9.18 from RM9 a share.
Maybank IB explained that retail had remained the key earnings pillar for the group, with continued strength at Suria KLCC, while the office segment delivered stable income under its triple-net lease structure.
While the hotel segment saw softer revenue, it posted higher profitability, the research house pointed out.
In 2026, Maybank IB noted that the group’s office portfolio should remain supported by long-term leases with high-quality tenants, while Suria KLCC’s strong positioning and tenant mix would bode well for footfall.
“Overall, KLCCP’s integrated KLCC ecosystem and stable tenant base should continue to anchor recurring income although growth remains modest,” it said.
Maybank IB raised its FY26 and FY27 earnings forecasts for the group by 2.8% and 2.5%, respectively, after incorporating a lower finance cost assumption.
