Analysts foresee promising outlook for KLCC Stapled Group
KUCHING: KLCCP Stapled Group’s prospects have been viewed positively as businesses are now back to normal and are surpassing pre-pandemic levels.
In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) said: “With businesses now surpassing pre-pandemic levels, we foresee a promising outlook for the upcoming quarters.
“Year-on-year (y-o-y), its retail footfall climbed by 30 per cent, suggesting that consumer spending remains strong.
“We opine its forward earnings will continue to be supported by the office division’s high occupancy rate, the retail division’s 10 new tenants that increased the mall’s occupancy rate during 4QFY23, the hotel operation’s occupancy ratio picking up, as well as the management services’ improved performance during the quarter with the rise in transient (seven per cent y-o-y) and season car park customers (16 per cent y-oy).
“Concurrently, the group has expressed interest in exploring global assets to add to its portfolio but prioritising the enhancement of local operations, while also considering venturing into the healthcare sector.”
Meanwhile, on the REIT’s FY23 performance, it said it experienced growth in its core businesses, particularly, management services and the hotel segment.
On a y-o-y basis, its FY23 revenue of RM1.62 billion grew by 11 per cent largely due to its hotel operations (44 per cent) with higher occupancy of 66 per cent from international guests, that were mainly from China, Singapore, and UK, and its services (20 per cent) as car park income increased from the higher footfall within its portfolio.
On the flipside, operating margins eased to 63 per cent (-2.7ppts) as utilities and maintenance costs picked up across all segments.
With the inclusion of a RM221.9 million revaluation gain, FY23 net profit came in at RM931.3 million (19 per cent).
“Adjusting for these gains, core net profit would otherwise come in at RM709.4 million (up nine per cent),” it said.
In a separate report, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) pointed out that the decent earnings growth in FY23 was mainly supported by earnings recovery in retail and hotel divisions.
Notably, retail division was buoyed by positive rental reversion and improved tenant sales. Similarly, hotel division improved on the back of higher tourist arrivals which supported ARR growth and occupancy rate of Mandarin Oriental.
The performance of office division was also relatively stable on the back of long-term lease of its office assets.