Hektar Real Estate Investment Trust

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)
Research Report by HLIB

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)
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

Top 5 Dividend Yield REITs in Bursa Malaysia 🏢🏘

Real estate investment trusts (REITs) are trust funds that own, operate, or finance income-producing real estate across various sectors such as retail, hotels, industrials, offices, healthcare institutions, warehouses and more.

Investing in REITs allows Stockbitors to earn income from real estate without needing to buy, manage, or finance the properties yourself. REITs are required to pay out at least 90% of their income to unit holders, generally resulting in high dividend yields, along with the potential for long-term capital appreciation as the value of real estate or the rent increases.

Today, we've filtered for 5 REITs in Bursa with the highest trailing dividend yields! Are the dividend yields sustainable? Do any of them interest you?

Let us know in the comment section below!

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST) $SENTRAL / 5123 (SENTRAL REIT) $IGBCR / 5299 (IGB COMMERCIAL REAL ESTATE INVESTMENT TRUST) $KIPREIT / 5280 (KIP REAL ESTATE INVESTMENT TRUST) $UOAREIT / 5110 (UOA REAL ESTATE INVESTMENT TRUST)

Change in Boardroom - PUAN NORLIZA BINTI SULEIMAN

Change in Audit Committee - PUAN NORLIZA BINTI SULEIMAN

Change in Nomination and Remuneration Committee - PUAN NORLIZA BINTI SULEIMAN

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - HEKTAR BLACK SDN BHD

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)

Change in Boardroom - MR JOHARI SHUKRI BIN JAMIL

OTHERSAPPOINTMENT OF INTERIM NON-EXECUTIVE CHAIRMAN AND CAPITAL MARKET SERVICES LICENSE REPRESENTATIVE (CMSLR) ACTING PRINCIPAL OFFICER

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)
Research by HLIB
Sell (from Hold) – TP RM0.50

“Impacted by higher costs"

Hektar’s 1Q24 core net profit came in at RM5.1m (+1.4x QoQ, -44.8% YoY). This came in below ours and consensus estimates at 16% of full year forecast. The negative deviation was due to higher-than-expected finance costs. In view of the results shortfall, we cut our FY24/25 forecasts by -5.4%/-5.2%. We also introduce FY26 forecasts. Besides, the increase in units in circulation after its private placement has resulted in our forecasted FY24/25 EPU to decline by -22%/-23% post earnings cut due to dilution. Although there are some positives regarding its outlook – potential positive spill-over effects to its retail assets from the introduction of flexible EPF “Account 3” and higher civil servant pay – its current yield valuations seems narrow relative to its historical range. Downgrade to SELL with a lower TP of RM0.50.

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

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - HEKTAR BLACK SDN BHD

Top 5 Dividend Yield REITs in Bursa Malaysia 🏢 🏘

Real Estate Investment Trusts (REITs) can be a valuable addition to an investor’s portfolio as they allow investors to participate in the real estate market without the need for significant capital or the responsibilities of property ownership. REITs are required to pay out at least 90% of distributable income to unitholders, so many investors flock to REITs for their regular dividend pay outs as part of a balanced portfolio.

Here, we have screened for the 5 highest Dividend Yielding REITs in Bursa! However, do bear in mind that DY is a lagging indicator and Stockbitors should always do due diligence to ascertain the health of a REIT before making any investing decisions!

$SENTRAL / 5123 (SENTRAL REIT) $HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST) $YTLREIT / 5109 (YTL HOSPITALITY REIT) $KIPREIT / 5280 (KIP REAL ESTATE INVESTMENT TRUST) $UOAREIT / 5110 (UOA REAL ESTATE INVESTMENT TRUST)

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : FUND RAISINGHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

Additional Listing Announcement /Subdivision of Shares

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

Additional Listing Announcement /Subdivision of Shares

Annual Report & CG Report - 2023

General Meetings: Notice of Meeting

$HEKTAR / 5121 (HEKTAR REAL ESTATE INVESTMENT TRUST)
Research by HLIB
Hold (Maintain) - TP of RM0.58

"Weaker end to FY23"

Hektar’s 4Q23 results came in at RM2.1m (-69.1% QoQ, -17.9% YoY), bringing FY23 sum to RM25.1m (-29.3% YoY). We deem the results to be below ours and consensus expectations at 83% and 79% respectively. The negative deviation was due to higher trust and finance expenses. In view of the results shortfall, we cut our FY24/25 forecasts by -3.4%/-3.0%, respectively. Despite increased occupancy rate, rental reversions for FY23 were flat. Moreover, with additional retail malls entering the market later this year, competition in this space will inevitably ramp up, which could further negatively impact Hektar’s rental reversions. Maintain HOLD with a lower TP of RM0.58 based on FY24 DPU on targeted yield of 11.0%.

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

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSHEKTAR REAL ESTATE INVESTMENT TRUST ("HEKTAR REIT")

I. ACQUISITION AND LEASE;
II. PLACEMENT; AND
III. AMENDMENT

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

OTHERSISSUANCE OF RM215.0 MILLION IN NOMINAL VALUE OF GUARANTEED MEDIUM TERM NOTES (GUARANTEED MTN) PURSUANT TO THE MTN PROGRAMME OF UP TO RM500.0 MILLION IN NOMINAL VALUE. (MTN PROGRAMME)