[%TzMN%]
Research by HLIB
Sell - TP RM0.40

"Another miss"

Hektar recorded 1H24 core net profit of RM13.5m, which we deem to have missed ours but within consensus estimates. 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 -5.7%/-2.3%/-1.5% respectively. With only 24.6% of NLA expiring in FY24 having been renewed, there are concerns whether all the
tenancies expiring this year can be renewed/replaced in time. Nonetheless, there might be potential positive spill over effects from (i) EPF Account 3 and (ii) higher civil servant spay, as Hektar’s retail assets cater more to the mass market, which could sustain earnings in subsequent quarters. Maintain SELL with a lower TP of RM0.40.

Analyst:
Tan Je Jyne
[%BuQo%]

$KLSE-HEKTAR
Research by HLIB
Sell - TP RM0.40

"Another miss"

Hektar recorded 1H24 core net profit of RM13.5m, which we deem to have missed ours but within consensus estimates. 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 -5.7%/-2.3%/-1.5% respectively. With only 24.6% of NLA expiring in FY24 having been renewed, there are concerns whether all the
tenancies expiring this year can be renewed/replaced in time. Nonetheless, there might be potential positive spill over effects from (i) EPF Account 3 and (ii) higher civil servant spay, as Hektar’s retail assets cater more to the mass market, which could sustain earnings in subsequent quarters. Maintain SELL with a lower TP of RM0.40.

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

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)