IGB Reit (Mid-Valley & Gardens)

[winston]

not vested

IGB REIT (IGBREIT MK)

Share Price: MYR1.70
Target Price: MYR1.64
Recommendation: Hold

1Q20: Start of a challenging year

1Q20 results and 1st interim gross DPU of 1.94 sen were in–line, at 30%/22% of our/consensus’ FY20E, in expectation of a weak 2Q20 due to COVID-19.

Our earnings forecasts and MYR1.64 TP (Ke: 7.8%) are intact at this juncture.

Maintain HOLD. We believe risk-reward is about balanced currently.

Beyond near-term retail challenges, IGBREIT’s malls are prominently located which will continue to drive high footfall traffic. FY20E/21E net DPU yield is 3.5%/5.0%.

We prefer YTLREIT (BUY; MYR1.25 TP).

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/1 ... de8d8f.pdf

[winston]

not vested

Recent selldown presents buying opportunity in IGB REIT

KUALA LUMPUR: There is a buying opportunity in IGB Real Estate Investment Trust (REIT) as its valuations are relatively cheap following the selldown since end-February, says RHB research.

The REIT's share price has declined 20% since end-February to RM1.70 as at the end of Wednesday trading, which brings it closer to its five-year average price-to-book-value.

"We think the current selldown presents an opportunity for investors to accumulate the REIT – which owns quality assets – at a cheaper valuation," RHB said, while noting that the current share price has largely priced in the negatives of the pandemic.

The research house sees minimal risk to a sharp negative revaluation of IGB REIT's properties Midvalley Megamall and The Gardens Mall this year. It added that the two properties have had their respective asset values go up RM165mil and RM95mil since 2012.

"With a gearing ratio of 23% and interest coverage of >6x, backed by near-to-full occupancy rates and blended rental reversion of a low- to mid-single digit, the attractiveness of the REIT’s assets should remain despite the current headwinds, given their strong market positioning," said RHB.

With regards to rental at its malls during the movement control order period, IGB REIT has not offered a blanket offer of rental assistance to the tenants at its malls. Instead, it will review the extent of the damage caused on a case-by-case basis.

"The REIT has not offered a rent-free period, which, to us, suggests its upper hand when it comes to bargaining power," said RHB.

IGB REIT's recently announced 1Q20 core net profit of RM68.4mil was below expectations, coming in at 23% and 22% of RHB's and consensus full-year estimates.

Revenue fell 11.5% year-on-year (y-o-y) and 10.5% quarter-on-quarter due to the support granted to tenants amid the ongoing Covid-19 pandemic and movement control order, as well as lower parking income.

This resulted in net property income (NPI) and core profit dropping 15% and 17.5% y-o-y, and 8% and 9.2% q-o-q. NPI margin dropped to 71% from 72%.

Source: The Star

https://www.thestar.com.my/business/bus ... n-igb-reit

[winston]

not vested

A more resilient option post-MCO recovery

1Q20 results were impacted by Covid-19 and the MCO; performance was below expectations as core net profit slid 18% yoy.

We cut FY20-22F EPS/DPS by 11-15%; the 11% fall in share price YTD appears to largely reflect medium-term earnings risks.

IGB’s mall assets may be the best recovery play.

Reiterate Add with lower TP.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 8BAC0048C8

[winston]

not vested

3Q Results

Revenue: +3%; RM 155m
EPS: -68%; RM 80m
Net Asset: RM 1.11

The lower profit after taxation was mainly due to the net fair value changes of RM161.8 million in relation to the investment properties in the preceding year quarter.

https://www.bursamalaysia.com/market_in ... id=3494755

[winston]

not vested

3Q24: Growth intact

Raising DDM-TP to MYR2.22;

D/G to HOLD

3Q24 results were in line, with net profit growth driven by stronger topline due to positive rental reversions and sustained occupancy rates.

A 3rd gross DPU of 2.68 sen was declared (9M24: 8.20sen).

We make no change to our earnings forecasts.

We roll forward valuation, which raises our DDM-based TP to MYR2.22 (+7sen).

We downgrade IGBREIT to HOLD (from BUY) due to limited upside potential.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/414016.pdf

[winston]

not vested

Strategic acquisition of Mid Valley Southkey

Expanding into Johor; U/G to BUY

IGBREIT has proposed to acquire Mid Valley Southkey (MVS) Mall in Johor Bahru for MYR2.65bn, marking its first foray outside the Klang Valley.

We are positive on the acquisition, which enhances IGBREIT’s income and geographical diversification profile.

The deal is earnings- and DPU accretive, underpinned by the mall’s healthy occupancy, strong footfall and strategic location within the integrated Southkey development.

We upgrade IGBREIT to BUY with a higher DDM-TP of MYR2.56 (from MYR2.22).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/466759.pdf

[winston]

5227 IGBREIT (HOLD)
Expansion achieved, momentum measured

We resume coverage on IGB REIT following the completion of the RM2.65bn Mid Valley Southkey Mall injection, which expands portfolio scale and lifts gearing to 26.3%.

MVS is strongly occupied and strategically located, well positioned to capture cross-border traffic between Malaysia and Singapore.

Moving forward, despite a lower interest rate environment, financing cost relief should be limited due to the fully fixed-rate debt profile, whereas consumer spending is expected to sustain earnings momentum supported by government measures.

That said, we introduce FY25/26/27 core profit forecasts of RM413.2m/RM556.6m/RM583.5m, and resumed coverage with a HOLD call and a TP of RM2.57, given that current valuations have largely priced in near-term upside.

Source: HLIB

[winston]

not vested

Oct 23, 2025

3Q25: Slightly above expectation

Earnings lifted by higher rental income; U/G to BUY

IGB REIT’s 3Q25 results came in slightly above expectations, accounting for 77% and 75% of our and consensus full-year forecasts, respectively.

The outperformance was driven by sustained rental growth at MVM and TGM.

We raise our FY25–27E earnings by 4.1–4.6%, factoring in higher rental assumptions for MVM and TGM.

Our revised earnings now assumes MVS’s contribution from Dec 25 (prev mid-Nov).

Our DDM-TP is raised to MYR2.96 (from MYR2.83), reflecting improved income visibility.

We upgrade IGBREIT to BUY (from HOLD).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/491745.pdf

[winston]

not vested

5227 IGBREIT (HOLD)
Results in line

IGB REIT recorded 4Q25 core net profit of RM124.4m (+21.3% QoQ, +45.5% YoY), lifting FY25 earnings to RM435.5m (+18.1% YoY).

This came in line with our and consensus expectations, accounting for 105% and 104% of full-year forecasts, respectively.

For FY26, earnings growth should be supported by the full-year contribution from MVS and mid-single-digit rental reversions across the existing portfolio.

That said, following the recent unit price appreciation, we view the risk-reward profile as balanced at current levels and therefore maintain our HOLD call with an unchanged TP of RM2.57.

Source: HLIB