Maintain BUY
1QFY22 net profit and 1st gross DPU of 2.42sen was in line at 23%/24% of
our and consensus’ forecasts. We maintain our earnings forecasts and DDMTP of MYR2.30 (Ke: 6.5%). Maintain BUY. We remain upbeat on Axis’ active
acquisition strategy on industrial assets which generally entail resilient
rental income and lower occupancy risks. Current FY22-24E net DPU yields
are 5%-5.6%.
Lifted by new assets
1QFY22 core net profit was MYR38.8m (+21% YoY, +10% QoQ). Earnings
growth was mainly driven by: (i) rental contribution from newly acquired
assets (3 new properties), (ii) positive rental reversions at selected assets
and, (iii) improved portfolio occupancy to 96% (1Q21: 91%). QoQ earnings
also supported by lower financing costs (-15%) from lower borrowings.
Earnings estimates unchanged
We maintain our FY22-24E earnings. Our 3-year forward earnings CAGR
estimates of +11% are largely backed by new assets, with a total estimated
value of MYR460m in FY22.
Active in acquisition strategy
Moving forward, we believe earnings for Axis remain resilient, contributed
by recent completed asset acquisitions and noting on-going acquisition of
assets. The selection of properties will continue to focus on Grade A
logistics and manufacturing facilities, retail warehousing, as well as office,
business parks and industrial properties.