Date: October 2, 2024
Broker: Maybank Investment Bank Berhad
Overview
Axis REIT (AXRB MK) is highlighted as the top BUY pick in the Malaysia REIT sector. It is favored for its consistent performance in the industrial segment, where earnings remain resilient due to long-term tenancies and strong rental reversions.
Stock Performance and Target Price
- Current Price (CP): MYR1.84
- Target Price (TP): MYR2.12
- Upside: 20%
Axis REIT is expected to see a strong price upside of 20%, with a positive earnings outlook.
Earnings Forecast and Dividend Yields
- 2024 Earnings Growth: 21.5%
- 2025 Earnings Growth: 17.9%
- 2024 Dividend Yield: 4.7%
- 2025 Dividend Yield: 5.6%
Axis REIT’s strong forecasted earnings growth for 2024 and 2025 is supported by the strength of its industrial assets. Additionally, the company offers an attractive dividend yield, further enhancing its appeal to investors.
Debt Profile and Financing Costs
- Total Debt: MYR1.69 billion
- Floating Rate Debt: 45% of total debt
- Average Financing Rate in 1H24: 5.10%
Axis REIT has a moderate debt profile with 45% of its total debt comprising floating rate loans. This helps maintain balance in a fluctuating interest rate environment.
Occupancy Rates of Key Properties
Axis REIT has demonstrated steady occupancy across its key properties. Notable occupancy rates include:
- Axis Business Park: 90%
- Crystal Plaza: 93%
- Menara Axis: 54%
- Wisma Kemajuan: 62%
- Axis Business Campus: 75%
- Strateq Data Centre: 100%
- Axis Technology Centre: 92%
Axis REIT has diversified assets with varying occupancy levels, maintaining resilience through high occupancy rates in several key properties.
Investment Thesis
Axis REIT remains a top choice within the M-REIT sector due to its solid performance in the industrial property segment, strong earnings growth, and sustainable dividend yields. Its diversified portfolio of long-term, high-occupancy assets further strengthens its position in the market.
This analysis provides a clear picture of Axis REIT’s outlook as of October 2, 2024.
