$SUNREIT / 5176 (SUNWAY REAL ESTATE INVESTMENT TRUST)
Research by Public
Neutral – TP RM1.55

“New Assets To Lift Earnings"

Sunway REIT’s (SREIT) 1QFY24 realised net profit was down 10.4% YoY to RM82m, which came in within our and consensus full-year estimates. Year-to-date (YTD), the reported profits constitute about 25% and 23% of our and consensus full year estimates. Weaker Group realised net profit was mainly due to lower contribution from the Services segment after the disposal of Sunway Medical Centre (Tower A & B) in 3QFY23, though mitigated by the improved performance from the Hotel, Office and Industrial & Others segments. During the quarter, SREIT registered net property income (NPI) of RM130.5m and revenue of RM178.6m driven by performance across its core segments of retail, hospitality and office. Separately, it completed the acquisition of six hypermarkets (purchase consideration of RM520m) which will improve its earnings in the upcoming quarters. As such, we tweak our FY24-26 profit forecasts upwards by 6%-17% to account for these new assets. Given the limited share price upside, we maintain our Neutral call with TP unchanged at RM1.55.

Analyst:
Tan Siang Hing
research@publicinvestbank.com.my