Latest news with #HLIB
BusinessToday
2 days ago
- Business
- BusinessToday
Analysts Back Sime Darby Property On Its Solid Pipeline Of Projects
Sime Darby Property Bhd - Ready-built Warehouse (Source Official wesite Nov 2024) Sime Darby Property Bhd (SDPR) maintains strong analyst support with RHB Investment Bank Bhd (RHB Research) and Hong Leong Investment Bank Bhd (HLIB) both reaffirming their BUY calls. RHB Research assigns a target price of RM2.33, implying a 64% upside from the current market price of RM1.42, while HLIB maintains a slightly more conservative target price of RM2.05, projecting a 44.4% capital gain plus a dividend yield of 2.3%, resulting in an expected total return of 46.7%. The positive outlook reflects confidence in Sime Darby Property's resilient sales momentum and strategic development plans. According to RHB Research, Sime Darby Property's first quarter of fiscal 2025 earnings fell short of expectations due to delayed recognition of some industrial property sales. Nevertheless, property sales remained robust at RM928 million, putting the company on track to meet its annual sales target of RM3.6 billion. The quarter saw industrial products contributing half of total sales, with residential high-rise, landed residential, and commercial properties making up the remainder. RHB Research noted the upcoming launch of KLGCC Mall in the second half of 2025 and the timely delivery of two data centres as key growth drivers. The firm also highlighted improved cost efficiency and reduced finance expenses as positive factors, with net gearing slightly rising to 0.28 times. HLIB described the first quarter results as within expectations, with core profit after tax and minority interests (PATAMI) rising 20.1% quarter-on-quarter to RM115.6 million despite a 10.8% revenue decline. This was largely attributed to better profit margins from a favourable product mix and lower compliance costs. Sales for the quarter were steady at RM927.5 million, representing about 26% of the company's full-year sales target. HLIB also pointed to strong unbilled sales of RM3.84 billion, the highest since 2017, signalling healthy revenue visibility. The firm forecasts steady earnings growth, adjusting its FY25 and FY26 projections slightly while introducing a positive outlook for FY27 with core PATAMI expected to reach RM663.2 million. Both research houses highlight the strength of Sime Darby Property's industrial segment, with HLIB emphasising the ongoing construction of Google's hyperscale data centre, scheduled for completion in the second half of 2026. The company's investment property portfolio is expanding, with KLGCC Mall nearing opening and strong occupancy gains in its Metrohub industrial assets. These recurring income streams are expected to boost future earnings as leasing activity remains robust. Looking forward, analysts are optimistic about Sime Darby Property's prospects, citing its diversified product offerings across residential, commercial, and industrial sectors as a key advantage. The anticipated completion of the East Coast Rail Link (ECRL) by end-2026 is expected to benefit the company's industrial landbank near Klang station, improving sales and rental yields. Both RHB and HLIB believe the group's balanced approach, combining development-driven growth with steady expansion of its investment property segment positions Sime Darby Property well for sustainable long-term earnings growth. In conclusion, Sime Darby Property continues to deliver on its strategic goals with solid sales momentum and growing recurring income, backed by positive analyst ratings and substantial upside potential from current share prices. Related
New Straits Times
3 days ago
- Business
- New Straits Times
FGV's Q1 profit misses expectations despite higher FFB output, says HLIB
KUALA LUMPUR: FGV Holdings Bhd's first quarter (Q1) 2025 net profit fell below the analyst's expectation, said Hong Leong Investment Bank Bhd (HLIB). "The company's Q1 2025 net profit of RM23.3 million fell short of expectations, accounting for only 7.2 per cent and 7.7 per cent of consensus and the firm's full-year estimates, respectively," the bank said. Despite facing less-than-favourable weather conditions, HLIB said FGV's fourth month of 2025 (4M25) FFB output growth of 12.7 per cent beat Malaysia's fresh fruit bunch (FFB) output growth of -1.0 per cent during the same period, and management attributed the stark productivity improvement to enhanced estate practices and better labour availability. Given the strong FFB output achieved year to date (YTD), management raised its FY25 FFB output growth guidance to eight to 10 per cent (from five to eight per cent earlier). On its CPO production cost guidance, HLIB said despite improved productivity, FGV's ex-mill CPO production cost increased by 5 per cent to RM3,040 per metric tonne (mt) in Q1 2025, due to higher harvesting, transportation and manuring costs. "FGV anticipates such cost to ease to less than RM2,700 per mt for the full year, mainly on the back of lower fertiliser cost," it said. Overall, HLIB has cut its financial year 2025 (FY25) to FY27 net profit forecasts by 22.1 per cent/16.2 per cent/15.9 per cent, mainly to account for lower FFB milling and oils & fats margin assumptions. "Maintain Hold rating, with an unchanged target price of RM1.30 (i.e., FELDA's latest takeover offer price)," it added.
Barnama
3 days ago
- Business
- Barnama
MISC Shares Down On Weaker 1Q FY2025 Results
BUSINESS KUALA LUMPUR, May 29 (Bernama) -- MISC Bhd's shares fell in early trade after its net profit for the first quarter ended March 31, 2025 (1Q FY2025) dropped year-on-year on the back of lower revenue for the quarter. At 9.44 am, MISC slipped two sen to RM7.51, with 48,900 shares transacted. In a filing with Bursa Malaysia yesterday, MISC's net profit eased to RM705.70 million in 1Q from RM759.90 million a year earlier, while revenue declined to RM2.82 billion against RM3.64 billion. The lower revenue was primarily weighed down by lower revenue from the marine and heavy engineering segment by 54.0 per cent, it said. Despite the weaker performance, Hong Leong Investment Bank Bhd (HLIB) and CIMB Securities Sdn Bhd maintained their buy calls on a positive earnings outlook. HLIB said despite a dismal outlook in MISC's gas segment, it still expects group earnings growth in FY2025 to be driven by the petroleum division and offshore business. 'Our FY2025/2026 profit forecasts are adjusted slightly by -0.3 per cent/-3.7 per cent. We also introduce FY207 earnings forecast at RM2.49 billion,' it said in a note today. CIMB Securities said it expects earnings to normalise in the following quarters, in the absence of the one-time gain from floating production storage and offloading (FPSO) vessel Bunga Kertas. 'A dividend per share of eight sen was declared, in line with our forecast.
New Straits Times
4 days ago
- Business
- New Straits Times
HLIB bullish on Sentral REIT's RM70mil Mont Kiara deal secured at 42.8pct discount
KUALA LUMPUR: Hong Leong Investment Bank (HLIB) holds a positive view on Sentral Real Estate Investment Trust's (Sentral REIT) proposed RM70 million acquisition of a strategic asset in Mont Kiara, citing its yield-accretive potential and attractive purchase price—secured at a notable 42.8 per cent discount to comparable properties in the vicinity. HLIB said the acquisition price of RM70 million for the light industrial asset at Arcoris Plaza—comprising a total net lettable area (NLA) of 67,593 sq ft (retail: 53,244 sq ft; al-fresco: 14,349 sq ft)—translates to RM1,035.60 per sq ft. This is notably below the average market valuation of RM1,810.94 per sq ft for retail properties in Mont Kiara, it said in a note. HLIB added that the RM70 million acquisition represents about 2.7 per cent of Sentral REIT's total asset value and will be fully financed through debt. It said that, assuming a borrowing cost of 4.6 percent, the acquisition is projected to increase distribution income by 0.8 percent in FY2025 and by 3.3 percent in both FY2026 and FY2027, with earnings contributions expected to commence in the fourth quarter of FY2025. Following the acquisition, Sentral REIT's gearing ratio is expected to edge up to 45.7 per cent, from 44.2 per cent previously forecasted for FY2025. Taking into account the earnings accretion and recent share price weakness, HLIB has upgraded its recommendation on Sentral REIT to BUY, with a revised target price of 79 sen (from 78 sen, based on FY2025 distribution per unit (DPU) and a targeted yield of 8.5 per cent. In a filing with Bursa Malaysia on Tuesday, Sentral REIT announced that it had signed a sale and purchase agreement (SPA) with UEM Sunrise Bhd's subsidiaries—Arcoris Sdn Bhd (ASB) and Sun Victory Sdn Bhd (SVSB). The deal involves the acquisition of 38 stratified retail units and 1,432 car park bays within Arcoris Plaza. The REIT said the acquisition would allow it to capitalise on economies of scale in Mont Kiara, enabling the team to leverage its existing property management and leasing capabilities for efficient operations. Sentral REIT, in which Malaysian Resources Corporation Bhd holds a 27.94 per cent stake, also pointed to the property's strategic location, strong accessibility, and stable rental income as key drivers of its long-term potential. The asset is currently fully tenanted, featuring a diverse mix of food & beverage, lifestyle, health, and education operators, many of whom are under a sales turnover rental model. The acquisition is expected to be completed in the fourth quarter of 2025 and is anticipated to contribute positively to earnings for the financial year ending Dec 31, 2025, it said in the filing. As of end-March 2025, Sentral REIT reported cash and cash equivalents of RM24.98 million, with long-term borrowings amounting to RM1.17 billion. Post-acquisition, its gearing ratio is projected to rise slightly from 44.6 per cent to 46.1 per cent.
BusinessToday
5 days ago
- Business
- BusinessToday
HLIB Maintains Hold On FGV
Hong Leong Investment Bank Bhd (HLIB) Research has maintained a HOLD call on FGV Holdings Bhd with an unchanged target price of RM1.26, following the group's move to acquire full ownership of eight subsidiaries from Koperasi Permodalan Felda Malaysia Bhd (KPF) for RM229.8 million. The house noted that while the earnings uplift from the acquisitions is likely to be limited—especially after accounting for funding costs—the move enhances FGV's operational control, improves decision-making agility and aligns better with its long-term strategic goals. HLIB has kept its earnings forecasts unchanged for now, pending further updates from FGV's upcoming results briefing scheduled for 28 May 2025. The acquisitions involve remaining minority stakes in key units including a 16.67% stake in FGV Kernel Products for RM12.9 million, a 33.33% stake in FGV Refineries for RM17.9 million, and a 49% stake in FGV Transport Services for RM77.9 million, among others. The transaction will be funded via a mix of internal funds and bank borrowings, and is expected to be completed by the third quarter of 2025. HLIB stated that based on FY2024 earnings, the acquisitions are not expected to contribute significantly to bottom-line growth. However, the analyst added that the initiative may support long-term gains by streamlining management efficiency across the group's downstream and support businesses. On the balance sheet, the impact is anticipated to be modest, with net gearing projected to rise slightly from 0.27 times as at 31 December 2024 to 0.31 times post-acquisition. At the current share price of RM1.28, FGV is trading at a slight premium to HLIB's target price, with a projected capital downside of 1.3%. The expected total return is marginal at 0.3%, supported by a 1.6% dividend yield. Despite recent share price gains, HLIB believes the stock remains fairly valued, given muted earnings visibility and potential margin pressures in its core plantation segment. The research house will revisit its outlook following the management's briefing later this month. Related
