MORNING CALL: 26/10/23

TA Securities says it came away from KIP REIT’s 1QFY24 results briefing feeling upbeat about the trust’s near-term prospects.

Transcript

00:00 TA Security said it came away from KIP Reid's first quarter FY24 results briefing, feeling

00:07 a beat about the trust's near-term prospects.

00:10 Recommendation remains a buy, though target price is now RM1.08, up from RM1.04.

00:16 The stock closed yesterday at RM0.90.

00:19 Some key takeaways.

00:20 First quarter FY24 operational performance was resilient, with average portfolio occupancy

00:26 rate increasing to 94.1%, up from 90.9% previously.

00:31 No notable vacancy risks for the year.

00:34 KIP Mall Bangi is expected to complete its facelift by the end of the year.

00:39 Occupancy rate is currently at 85%, and once renovations are done, the figure should surpass

00:44 90%.

00:45 Meanwhile, KIP Mall Kota Warisan, with a 7.9% net property income yield, is expected to

00:52 contribute from the third quarter of FY24 onwards.

00:55 The group has set a target of increasing the portfolio's value to RM1.5 billion over the

01:01 next five years.

01:02 TAE said its FY24-26 earnings forecasts have been adjusted upwards by 2% to 9% to reflect

01:10 the earnings contribution from KIP Mall Kota Warisan.

01:14 But the FY24-26 EPU and DPU are only raised by 1-6% due to the incorporation of 12.3 million

01:23 new placement units.

01:24 Quick look at consensus.

01:26 According to Bloomberg data, TAE's buy aside, we've also got a hold call from Afin Huang

01:31 Investment Bank, with a target price of 90 cen.

01:35 That takes the average target price to 99 cen, some 10% higher than KIP REIT's last

01:40 close of 90 cen.

01:42 Thanks for watching.