Maybank IB Research expects a 22.4% earnings per unit growth in FY24 for CLMT.
PETALING JAYA: High occupancy rate, positive shopper traffic, tenant sales and rental reversion are expected to support Capitaland Malaysia Trust
’s (CLMT) growth outlook in the near term.
Kenanga Research said CLMT’s first quarter of the financial year 2024 (1Q24) core net profit of RM33.5mil met both its and consensus full-year forecast at 28%.
The research house noted CLMT’s 1Q24 revenue rose by 43% year-on-year (y-o-y) mainly due to the full quarter contribution from Queensbay Mall (QBM) along with a higher occupancy rate of 93% (versus 89% a year ago).
“Its 1Q24 core net profit surged by a sharper 67% to RM33.5mil as its operating expenses (including those of QBM) rose at a slower pace of 22% (versus 43% at the top line).
“On a quarter-on-quarter basis, CLMT’s 1Q24 revenue increased by 3% likely due to positive rental reversions and the Chinese New Year festive shopping boost.
“However, its 1Q24 core net profit was flattish as operating expenses are typically seasonally higher in the first quarter periods,” the research house said in a report on the trust yesterday.
Kenanga Research said CLMT’s operating performance has improved and growth rates for shopper traffic and tenant sales are at 9% and 16% respectively. The group also saw a 9% rental reversion for its malls in 1Q24.
“Nonetheless, it is mindful of cautious consumer spending due to elevated costs of living and recent service tax hike,” the research house said.
Kenanga Research noted CLMT is less affected by the entry of new malls in Klang Valley as it derives bulk of its earnings from its malls in Penang. The research house expects weakness from its retail assets in the Klang Valley which are subject to intense competition, but cushioned by QBM.
“CLMT will likely continue to see solid performances from its Penang assets. However, its less prime asset profile amid weakened consumer spending and the influx of new malls may put a strain to its retail assets in the Klang Valley (namely, Sungei Wang and 3 Damansara),” the research house said.
Kenanga Research maintained a “market perform” call for CLMT with a target price of 58 sen a unit.
Maybank Investment Bank (Maybank IB) Research expects a 22.4% earnings per unit growth in FY24 for CLMT, mainly from QBM’s full year contribution.
“Management’s portfolio strategy is to explore yield accretive industrial and logistics assets and to divest its low-yielding assets as part of its capital recycling efforts,” the research house said.
