Affin Hwang maintains Buy on SunReit, lifts TP to RM2.06

KUALA LUMPUR: Affin Hwang Capital research maintained its buy call in Sunway REIT with a higher target price of RM2.06.

Sunway REIT’s 3QFY19 realised net profit grew 8.5% year-on-year (y-o-y) to RM75.8mil due to higher revenue from all asset classes.

“Notably, Sunway Pyramid registered 4.8% growth in revenue (yoy) on higher turnover rent while higher occupancy rates lifted revenue from Sunway Resort Hotel & Spa, Menara Sunway and Sunway Putra Tower,” said Affin Hwang.

Including the recognition of RM4.4mil income guarantee for Sunway Clio Property, this more than offset weaker revenue from other hotels and lifted SunReit’s overall profitability, it added.

For 9M19, net property income grew 2.8% y-o-y to RM328.5mil on higher contributions from most asset classes except the hotel segment due to the refurbishment of the ballroom and meeting rooms at Sunway Resort Hotel & Spa and softer hospitality market conditions.

“Nonetheless, the higher NPI from other asset classes mitigated the weaker hotels earnings,” said the research house.

“Overall, the results are within market and our expectations; 9MFY19 realised net profit accounts for 74% of street and our full-year earnings forecasts.”

Source : TheStar