Axis REIT outlook bright for FY25, says HLIB
HLIB said this will be supported by full-year contributions from prior acquisitions, a stronger balance sheet post-RM449.7 million placement in Oct 2024, and potential uplift from global supply chain shifts amid rising geopolitical risks.
"Looking ahead, we continue to anticipate earnings growth in FY25, mainly supported by the full-year contributions from acquisitions completed in the previous year as well as higher rental rate reversion.
"In addition, rising geopolitical tensions and shifting global trade policies could further accelerate supply chain diversification among multinational firms, which may strategically benefit industrial-focused REITs like Axis," it said in a note.
Axis REIT posted a second quarter (Q2) 2025 net profit of RM51.0 million, bringing the first half of 2025 (1H25) to RM101.2 million.
HLIB said this is slightly ahead of the firm's expectations but within consensus forecasts.
"The results slightly exceeded our expectations, making up 53 per cent of our full-year forecast, but remained within consensus estimates at 49 per cent," it said.
Moving forward, management has guided minimal impact from the electricity tariff hike.
HLIB has tweaked its FY25/FY26/FY27 bottom line up 3 per cent/3 per cent/3 per cent to reflect slightly higher than expected rental revenue.
Post earnings adjustment, the firm has retained Buy on the stock with a higher target price of RM2.25 (from RM2.18).
"We believe this premium is justifiable, considering its proactive acquisition strategy, supported by its healthy gearing level of 33 per cent, along with its exposure in Johor to benefit from the JS-SEZ theme," it added.
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