KUALA LUMPUR: The recovery in Pavilion Real Estate Investment Trust's (REIT) earnings, which is showing signs of normalisation, is expected to receive another boost from the reopening of China's borders and the inflow of tourists from the country.
Pavilion REIT had guided that 30% of its Pavilion Kuala Lumpur footfall pre-pandemic came from foreign tourist, with about 50% of that group coming from China.
"With the retail sales momentum remaining strong, and Pavilion Kuala Lumpur (PKL) well-positioned to benefit from the increasing number of tourists, we remain positive on the REIT’s outlook," said RHB Research in its company update.
Following the release of the REIT's 4Q22 results, RHB said its performance met expectations, with numbers improving across all segments.
The REIT's 4Q core profit of RM65mil brought its total FY22 earnings to RM246mil, which was nearly double the earnings of the previous year.
RHB reported that the REIT's revenue and net property income in the quarter improved 17% year-on-year, mainly attributed to higher rental billings and turnover rent.
Pavilion REIT's management has guided for a higher rental reversion of 5-7% in FY23 on the back of strong retail momentum, up from 4-5% in FY22.
RHB said its own forecast for rental reversion in FY23 was 5-6%, as occupancy rate is a non-concern for Pavilion KL.
"We adjust FY23-24F earnings by 4-6% and introduce our FY25 net profit forecast of MYR382mil," said RHB.
Subsequently, the research firm maintained its "buy" call on the REIT with a higher target price of RM1.57, from RM1.52 previously.
Meanwhile, RHB Research noted that the acquisition of Pavilion Bukit Jalil is still expected to be completed in 2Q23, which will help to reduce the REIT's reliance on Pavilion KL.
It also noted that Pavilion REIT has entered into a memorandum of understanding with Tanah Hijauan to explore the purchase of green electricity generated by the latter’s solar power plant for Pavilion KL and Intermark Mall.
MIDF Research, in its own update, said it maintained its positive earnings outlook on Pavilion REIT given the higher tourist arrivals, particularly from China, and improved tenant sales at Pavilion KL and Elite Pavilion Mall.
The research firm maintained "buy" on the REIT with a higher target price of RM1.63, from RM1.56 previously.
KUALA LUMPUR: Bursa Malaysia rebounded from the strong broad-based sell-down on Tuesday to open higher this morning, supported by bargain hunting activities, a dealer said.
At 9.05 am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 5.93 points to 1,491.43 from Tuesday's close of 1,485.50.
The key index opened 3.32 points stronger at 1,488.82.
Market breadth is also positive with gainers leading losers 282 to 129, while 284 counters were unchanged, 1,478 untraded and 11 others suspended.
Turnover amounted to 265.63 million units worth RM157.99 million.
The market was closed yesterday for the Federal Territory Day public holiday.
Rakuten Trade Sdn Bhd vice-president of Equity Research, Thong Pak Leng said the benchmark index fell below 1,490 on Tuesday due to the market uncertainty brought on by the United States (US) Federal Reserve (Fed) meeting.
"However, we reckon bargain hunting activities would return, thus expect the index to trend in the 1,490-1,500 range today, and the tech sector to see a strong recovery.
"Meanwhile, crude oil prices weakened on higher inventory data as the Brent crude declined to US$83 per barrel," he said in a note today.
Globally, Thong said Wall Street recovered strongly following the Fed's 25 basis points hike, as the Dow Jones Index Average added seven points and the Nasdaq jumped by 232 points with the US 10-year yield easing to below 3.42 per cent.
"Regionally, Hong Kong's equities also rebounded, buoyed by tech stocks as traders were betting on the Fed's less aggressive rate hike, pushing the Hang Seng Index 230 points higher to close above the 22,000 level," he added.
Back home, Bursa heavyweights Press Metal gained eight sen to RM5.26, Maybank improved five sen to RM8.79, Sime Darby Plantation accumulated seven sen to RM4.40, Petronas Chemicals was six sen better at RM8.41 and IHH improved four sen to RM5.96.
As for the actives, CTOS Digital lost four sen to RM1.50, Hong Seng and Pasukhas added half-a-sen each to 20.5 sen and 2.5 sen, respectively, and Vestland improved one sen to 40 sen while Minda Global was flat at seven sen.
On the index board, the FBM Emas Index earned 46.03 points to 10,862.30, the FBMT 100 Index advanced 42.09 points to 10,527.55, and the FBM Emas Shariah Index went up 65.18 points to 11,141.38.
The FBM 70 Index widened 55.91 points to 13,741.91 while the FBM ACE Index added 47.20 points to 5,758.66.
Sector-wise, the Industrial Products and Services Index advanced 1.08 points to 191.01, the Plantation Index increased 51.82 points to 6,881.20 and the Financial Services Index grew 19.211 points to 16,432.65, while the Energy Index fell 1.54 points to 885.71.
hahaha...uptrend stk you say........buy from 0.1 till now and wait years for uptrend lol....only Good123 can afford for so big uptrend.....make ppl laugh till cry.....:)
Interest rate increase: February 2023. Fed raises rates by 0.25% 1 day ago — A 0.25% interest rate hike may end up proving too small, Dutta said — with the risk that the Fed will have to return to a
The KLCI will remain volatile but gains on overnight Wall Street will cushion any downside. That said, O&G and plantation counters will continue to come under pressure after commodity prices tanked. Technically, we expect the benchmark index to range between 1,480pts and 1,510pts today, with supports at 1,450pts and 1,420pts.
Other News:
Reservoir Link: To acquire 90% stake in Indonesian mini hydro plant project. Reservoir Link Energy has entered into a term sheet (TS) to acquire a 90% stake in Indonesia’s PT Eco Power Engineering (EPE) for USD3m (MYR12.81m) in cash. The acquisition represents an immediate earnings accretion opportunity upon completion of the project. (Source: The Edge Market)
Pasukhas: Wins MYR21m construction job in Kulai. Loss-making builder Pasukhas Group has secured a MYR21m contract to build a production building, warehouse and three-storey office in Kulai, Johor. The contract was awarded by Attractive Venture (JB), and the physical construction period will be 12 months. (Source: The Edge Market)
PASUKHAS GROUP: (PSK MK, CP: MYR0.02, Not Rated) Secured first contract of the year but… Maybank IBG Retail Research
Pasukhas announced that its wholly-owned subsidiary Pasukhas S/B has received an award from Attractive Venture S/B to design and build a production building, warehouse and three storey office in Kulai, Johor. The contract, which is worth MYR21m, is for a period of 12 months.
This contract win will help to replenish its outstanding order book which stood at MYR100m at end-Nov 2022. That said, execution is key given its volatile earnings track record (losses since FY18).
A silver lining is that Pasukhas has an energy utilities services and power generation unit, which provides a long-term recurring income stream. Currently, it owns and operates a mini hydro plant at Sungai Rek, Kelantan over a 21-year lease period. This segment contributed 24% to 9M22 EBIT.
It is also worth highlighting that Pasukhas via its JV has kicked start its maiden development project located off Jalan Tun Razak, Kuala Lumpur. The project has an estimated gross development value of MYR338m with an estimated gross development profit of MYR81m.
That said, investors with lower risk appetite should stay on the sidelines, pending its turnaround. Valuation wise, PB is preferred here. At current price, the stock is trading at a PB of 0.2x (as at Sep 2022), which is lower than its 3-year historical average PB of 0.5x. Balance sheet wise, its net gearing stood at 0.02x (including money market instruments) at end-Sep 2022.
Bluer Skies With China’s Reopening We estimate China visitors to reach 907k in 2023 or 38% of pre-pandemic 2019 levels. Receipts from China tourists made up 6.6% of GDP in 2019, the highest in ASEAN. Exports weakened in 4Q on tepid US and EU demand, and may persist into 1H23. We raise our 2023 GDP growth forecast to +5.7% (from +5.2%) given the more positive China outlook. Though inflation has been receding, we raise our 2023 forecast to +3.7% (from +3.5%) on firmer demand-side pressures as recovery strengthens.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
nightmare007
454 posts
Posted by nightmare007 > 2023-02-02 10:05 | Report Abuse
inix NOSH 2 million pun boleh terbang, tak malu ka? :))))