Thursday, May 19, 2011

KLCC Property Earnings Evaluation

20 May 2011
Price Target: RM3.46
Share price: RM3.28


Results
# 4Q11 net profit declined 64.6% yoy to RM166.5m, mainly due to lower property revaluation adjustment (4Q11: RM204.8m; 4Q10: 758.0m).

# We estimate normalised FY11 PATAMI to be RM280.2m (+20% yoy), which is in-line with our FY11 estimate of RM270m.

Deviations
None.

Dividends
7.0 sen single-tier dividend was declared for Q4, bringing full-year dividends to a total of 12.0 sen per share.

Highlights
Property rental income rose 5.1% yoy, attributed to 12% rise in hotel revenue for FY11. Hotel segment earnings also rose 50% yoy in the same period to RM39.0m, which we believe is due to improved occupancy rates and ancillary income from F&B operations.

Risks
38% EPS dilution from RCULS conversion by the parent company, KLCC Holdings.

Forecasts
After rolling over our numbers, we maintain topline estimate of RM1.02bn for FY12, and slightly reduce our FY12 net profit estimate by 6.9% to RM283m.

Rating
HOLD


Positives
High occupancy rates (>90%), consistently strong human traffic and desirable tenant profile due to prestigious and desirable KLCC address.

Stability of rental yield and scope for capital appreciation.

Negatives
Uncertainty over extent of dilutive impact from RCULS.

Valuation
# In the absence of major catalysts, we maintain our HOLD rating.

# Our price target has been marginally raised from RM3.41 to RM3.46, based on unchanged 15% discount to RNAV of RM4.07.

# The RCULS issue needs to be resolved before KLCC Property can enjoy significant re-rating.


Source: HLeBroking

1 comment:

  1. Thanks for that evaluation. I hope you'll update always with its property earnings.

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    ReplyDelete

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