KUALA LUMPUR (Aug 22): Hong Leong IB (HLIB) Research has downgraded Sentral REIT to “hold” at RM1.01 with a lower target price (TP) of 91 sen (from 99 sen) and said Sentral REIT recorded 2QFY22 core net profit of RM18.5 million (-9.4% q-o-q; -2.3% y-o-y) and 1HFY22 core net profit of RM38.8 million (-2% y-o-y).

In a note on Monday (Aug 22), the research house said it deems the results to be below expectations despite accounting for 45%-48% of house and consensus estimates, as it is projecting sequentially weaker quarters due to non-renewal of tenants for two of their properties.

“The marginal drop in 1HFY22 performance was due to lower rental income generated from: i) Quill Building 2 – HSBC; ii) Wisma Technip; iii) Quill Building 3 – BMW and; iv) Menara Shell, as occupancy rate decreases.

“We trim our earnings forecast by 8.9%/8.5%/5.2%, as we lower our occupancy rate assumptions, given the challenging outlook.

“We revised our TP to RM0.91 (from 99 sen) and downgrade to 'hold' (from 'buy'),” it said.

  1. MRCB buys Quill’s 39% stake in Sentral REIT manager
  2. Sentral REIT 1Q NPI declines 2.9% to RM30.51m
  3. Sentral REIT 1Q net property income down 4% on-year; up in quarterly terms