Sentral REIT's 3Q24 Core Profit Of RM21 Million Prompted BUY Call From Analysts

Both Maybank Investment Bank Bhd (Maybank IB) and RHB Investment Bank Bhd (RHB Research) have maintained a BUY recommendation for Sentral REIT, with a target price (TP) of between 89 sen and 91 sen.

The BUY recommendation from Maybank IB is based on Sentral REIT's third quarter of 2024 (3Q24) net profit of RM20.5 million that met expectations while RHB Research's positive sentiment resulted from the REIT's dividend yield of around 9% for FY25F and stable earnings outlook.

Maybank IB said Sentral REIT's growth in revenue was primarily attributed to the acquisition of Menara CelcomDigi in December 2023 and the new tenancy at Sentral Building 4.

As such, Maybank IB has raised its FY24E net profit forecasts by 4%, following a revision in operating expenses with an unchanged TP of 89 sen.

Meanwhile, RHB Research said the decrease in tenancy at Menara Shell gives Sentral REIT a more secure outlook, despite the slight dip in occupancy from 89% in December 2023 to 84% in June 2024.

Moving forward, analysts expect Sentral REIT to explore potential opportunistic divestments and acquisitions, which could further enhance its portfolio.

Additionally, the potential disposal of Wisma Sentral Inai, a vacant asset, remains a key re-rating catalyst. If sold, the proceeds could be used to reduce borrowings, potentially improving earnings by up to 8% and reducing gearing, which would open up opportunities for new acquisitions.

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Sentral REIT's 3Q24 Core Profit Of RM21 Million Prompted BUY Call From Analysts

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