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Research by HLIB
Buy – TP RM1.81

“Slight hiccup"

SunREIT’s 2Q24 core net profit of RM78.1m (-4.8% YoY, +16.1% YTD) brought 1H24’s sum to RM160.1m (+0.8% YoY), which was below ours but within street estimates at 41% and 45% respectively. The negative deviation was due to higher-than-expected finance costs. In view of the results shortfall, we cut our FY24/25/26 forecasts by -6.9%/-6.9%/-6.7% respectively, as we impute higher finance costs. Nonetheless, sequential earnings should improve given (i) higher portfolio rental reversions post completion of AEI activities at Sunway Pyramid and Sunway Carnival Mall; (ii) stronger retail spending thanks to government initiatives; (iii) higher tourist arrivals; and (iv) 3 ongoing acquisitions to be completed in 3Q-4Q24. Maintain BUY with a lower TP of RM1.81.

Analyst:
Tan Je Jyne
[%WTYm%]

$KLSE-SUNREIT
Research by HLIB
Buy – TP RM1.81

“Slight hiccup"

SunREIT’s 2Q24 core net profit of RM78.1m (-4.8% YoY, +16.1% YTD) brought 1H24’s sum to RM160.1m (+0.8% YoY), which was below ours but within street estimates at 41% and 45% respectively. The negative deviation was due to higher-than-expected finance costs. In view of the results shortfall, we cut our FY24/25/26 forecasts by -6.9%/-6.9%/-6.7% respectively, as we impute higher finance costs. Nonetheless, sequential earnings should improve given (i) higher portfolio rental reversions post completion of AEI activities at Sunway Pyramid and Sunway Carnival Mall; (ii) stronger retail spending thanks to government initiatives; (iii) higher tourist arrivals; and (iv) 3 ongoing acquisitions to be completed in 3Q-4Q24. Maintain BUY with a lower TP of RM1.81.

Analyst:
Tan Je Jyne
JJTan@hlib.hongleong.com.my

$SUNREIT / 5176 (SUNWAY REAL ESTATE INVESTMENT TRUST)