Analyst Reports

Monday, 19 Feb 2018

11:48 AM MYT

KUALA LUMPUR: MIDF Research has maintained its “buy” call on AmanahRaya real estate investment trust (REIT), despite its lower-than-expected earnings in the financial year of 2017 (FY17).

In a note on Monday, the research firm also pointed out that it has raised its target price on AmanahRaya to RM1.12 from RM1.09 previously.

“AmanahRaya’s FY17 core net income of RM31.8mil missed our forecast, making up 93% of our full year estimates. Comparison to consensus estimate is unavailable.

“We maintain our “buy” recommendation on AmanahRaya for its diversified assets base. Due to the adjustment in our earnings estimates from the addition of Vista Tower, we increase our target price to RM1.12,” said MIDF Research, adding that the REIT’s dividend yield of 7% is “attractive”.


Following the inclusion of earnings contribution of Vista Tower into its forecast, MIDF Research raised its FY18 core net income estimate by 6.2% to RM41mil.

To recap, AmanahRaya’s acquisition of the 63-storey Vista Tower at The Intermark was completed in January. The office tower which is located at Jalan Tun Razak was purchased at RM455mil.

AmanahRaya’s core net income for FY17 fell by 10% year-on-year (y-o-y) to RM31.8mil, mainly as a result of higher property and non-property expenses.

“Property expenses jumped by 76% to RM7.2mil from RM4.1mil a year before due to higher major repair cost for the HELP University asset. Income after tax was higher by 83% due to the jump in fair value of its assets amounting to RM42.6mil.

“However, its FY17 topline improved by 5.3% y-o-y to RM60.4mil, driven by income contribution from newly acquired assets namely Deluge Factory in Johor, Toshiba TEC in Bandar Glenmarie and Contraves Building in Cyberjaya,” said the research firm.

AmanahRaya announced a distribution per unit of 1.34 sen for the fourth quarter of FY17, bringing total full-year dividend to 5.5 sen.


A Proud Subsidiary of Amanah Raya Berhad

Amanah Raya Berhad is Malaysia’s premier trustee company owned by the Minister of Finance Incorporated. With a century-long legacy dating back to 1 May 1921, Amanah Raya Berhad has served our nation for 100 years. They are the market leader in providing Trust, Estate Administration, Will Writing, and Custody Services.