KUALA LUMPUR: CIMB Equities Research said Pavilion REIT's 3Q14 core net profit of RM63mil brought its 9M14 numbers to RM175.3mil, which is above expectations.
The research house said on Friday the core earnings were at 79% of its full-year forecast, and 80% of the consensus figure.
Net property income (NPI) grew by 16.3% on-year, underpinned by an 8.8% revenue growth and lower property expenses.
“We raise our FY14 to FY16 earnings forecast by 4% to 4.1% per annum resulting in a higher DDM-based target price of RM1.50 versus RM1.45 previously.
“Despite the positive results, we maintain our Hold call on the stock as: 1) we see few rerating catalysts in the near-term, and 2) current dividend yields of 5.4% to 5.5% imply further yield compression will be limited, that would not augur well for the share price. We prefer Axis REIT in this space,” it said.
The research house said on Friday the core earnings were at 79% of its full-year forecast, and 80% of the consensus figure.
Net property income (NPI) grew by 16.3% on-year, underpinned by an 8.8% revenue growth and lower property expenses.
“We raise our FY14 to FY16 earnings forecast by 4% to 4.1% per annum resulting in a higher DDM-based target price of RM1.50 versus RM1.45 previously.
“Despite the positive results, we maintain our Hold call on the stock as: 1) we see few rerating catalysts in the near-term, and 2) current dividend yields of 5.4% to 5.5% imply further yield compression will be limited, that would not augur well for the share price. We prefer Axis REIT in this space,” it said.
