KUALA
LUMPUR: MIDF Research has maintained its neutral outlook for the REIT sector.
This
follows the recent wrap-up of the reporting season on 1QCY2017 which saw REITs
post mixed results.
Among
the seven REITs under MIDF Research's coverage, Sunway REIT, IGB REIT, and Axis
REIT had positive earnings growth while four (AmanahRaya REIT, Pavilion REIT,
CMMT, and KLCCP Stapled Group) performed negatively.
The
research house said that following the 1QCY17 earnings reporting season, its
earnings estimates and target prices for the respective REITs under coverage
were left unchanged as earnings of REITs were in line with expectations.
"Recommendations
for REITs under our coverage remain intact. REITs with buy calls include Sunway
REIT (target price: RM1.88) and AmanahRaya REIT (TP: RM1.15); while REITs with
neutral calls are Axis REIT (TP: RM1.68), IGB REIT (TP: RM1.73), KLCCP Stapled
Group (TP: RM7.60), CMMT (TP: RM1.69), and Pavilion REIT (TP: RM1.77),"
MIDF Research wrote today.
The
research house highlighted that Sunway REIT reported the highest quarterly
earnings growth of 8.6 per cent year-on-year in 1QCY17 with cumulative earnings
growing 5.6 per cent, driven by the higher earnings contribution from Sunway
Pyramid, Sunway Carnival, and Sunway Putra Mall.
IGB
REIT recorded the second highest quarterly earnings growth of 3.5 per cent
y-o-y and this was driven by strong earnings from Mid Valley Megamall and
Gardens Mall.
