#Hot Stock* KLCCP up 5%, highest single-day gain since mulling REIT

KUALA LUMPUR (Nov 22): KLCCPerty Holdings Bhd (KLCCP) rose as much as 5% to RM5.84 Thursday evening, its highest one-day gain since June 29, the day after it announced the intent to pursue a better corporate structure, including the possibility of a real estate investment trust (REIT).

At 4.28pm today, KLCCP was up 28 sen or 5.04% to RM5.84 with over 3.38 million shares done — topping the top gainer's list on absolute terms.

At RM5.84, KLCCP is at its highest since its Nov 7-close of RM5.90, but still about 7.7% off its recent intra-day high of RM6.33 on Oct 5 this year.

KLCCP's stock price had declined from last month as investors and analysts began questioning just how much gains there were left in KLCCP with the stock already up 85% year-to-date. "There might be news on the REIT, but I don't know really," a trader said, pointing out that prices are still below its recent high.

KLCCP first announced it was considering plans for a REIT on June 28 this year. The stock gained 45 sen or 11.7% to RM4.31 on June 28. The next day, KLCCP gained 34 sen or 7.9% to RM4.65 apiece.

On Oct 23, theedgemalaysia.com reported that KLCCP was still considering the possibility of injecting its assets worth over RM12 billion — including stakes in the iconic Petronas Twin Towers office tower and Suria KLCC shopping mall — into a REIT or business trust structure to maximise shareholder value.

In a note dated Nov 20, UOB KayHian Research calculated that KLCCP could be worth RM6.46 per share, assuming a 15% discount to revised net asset value (RNAV), which is benchmarked against KrisAssets's share price performance prior to IGB REIT's listing.

The research house has a "hold" recommendation and RM6.46 price target for KLCCP, given that the stock price had ran in recent months on news of the potential asset spin-off into a REIT.

"We hold a cautious stance on the share price performance of KLCCP post-listing of KLCC REIT. Recall that after IGB REIT was listed, IGB Corp's share price declined about 14%. Bear in mind that IGB Corp's share price had merely appreciated 25% pre-listing of its REIT versus KLCCPerties' 70% rally since the middle of the year," it said in the note.

There are six analysts with a "buy" on KLCCP versus five with a "hold" call, according to Bloomberg data. Price targets ranged between RM4.80 and RM6.87, averaging at RM6.24 apiece.