Latest news with #AME-REIT
The Star
6 days ago
- Business
- The Star
Acquisitions forecast to lift AME-REIT's earnings
RHB Research said it expected quarter-on-quarter earnings to improve. PETALING JAYA: Analysts have maintained their forecasts for AME Real Estate Investment Trust (AME-REIT) after the recent announcement of its first quarter results. RHB Research, which raised its target price for AME-REIT to RM1.80, said the REIT's results for the first quarter of its financial year ending March 31, 2026 (1Q26) met expectations, supported by contributions from a recent acquisition. 'We turned more bullish on its valuation given wider yield spread post-rate cut in the overnight policy rate and rising investor interest in domestic-centric names. 'We like the REIT for its high debt headroom, substantial exposure to floating-rate debt (81%) that will benefit from lower rates, and sturdy sponsor-backed pipeline to tap Johor's growing industrial market,' the research house added. At last look, the stock was at trading RM1.60. RHB Research said it expected quarter-on-quarter earnings to improve, supported by the ongoing acquisition of properties slated for completion in 2Q26. Beyond the immediate term, FY26 earnings should be further lifted by the full-year contribution from a recent acquisition spree, which includes five properties estimated to generate an additional RM4.5mil in FY26 gross rental income, complemented by the renewal of nine existing tenancies (27% gross rental), the research house added. 'We see room for continuing inorganic growth, supported by a low gearing level of 23%, providing financing headroom of RM220mil on top of the recent rate cut. 'Meanwhile, we view the downside risks from the sales and service tax expansion as relatively limited for AME-REIT, given its long-term master leases and a tenant profile that largely consists of established multinational companies capable of absorbing higher tax-related costs.' RHB Research noted that on a yearly basis, 1Q26 revenue rose 14.7% to RM14.1mil, supported by additional contributions from two properties (i-Park SAC 23 and 24, and iTechValley 46) acquired in 4Q25, as well as higher rental rates from tenancy renewals. Despite a 3.2% increase in 1Q26 core profit, net margins declined by 7.2 percentage points to 64.9%, mainly due to a rise in interest expenses following the acquisitions and higher operating costs. The research house said risks for AME-REIT include cancellation of acquisitions, slowdown in economic growth, and lower-than-expected rental revisions.
The Star
03-06-2025
- Business
- The Star
AME Elite's presence in investment hotspots to lift results in FY26
PETALING JAYA: Despite missing forecasts on its earnings for its financial year 2025 ended March 31 (FY25), analysts are still maintaining a 'buy' call on AME Elite Consortium Bhd. According to a report by Philip Capital Research, the engineering and construction firm still has a presence in high-demand foreign-direct-investment hotspots Penang and Johor. The research house noted would will continue to be a positive element despite a drop in AME Elite's revenue. For FY25, its revenue fell 15% year-on-year to RM609mil on the back of weaker contributions from the property sector. 'Nevertheless, its earnings before interest, taxes, depreciation, and amortisation improved 5.2 percentage points to 25.1%, attributed to better progress milestones for construction and property development projects, cushioning core net profit decline to a marginal 2% to RM89mil,' the research house said. Philip Capital Research noted that overall, the group's results came in below expectations, accounting for 54% of its full-year forecast and 52% of consensus forecasts. 'The result miss was primarily due to the timing of recognition for its RM210mil land sale to Digital Hyperspace (M) Sdn Bhd, which is expected to recognise a net gain of RM85mil, pending the final payment of the remaining 85% of the total consideration,' the research house noted. However, the data centre client remains committed to the deal and has requested an extension for the final payment deadline to June with an optional extension to August. Meanwhile, the research house also noted that AME Elite surpassed its FY25 target in terms of sales, which was supported by the launch of a industrial-park project in Penang. The company's earnings for its third quarter ended Dec 31, 2024 saw its core net profit soar 77% quarter-on-quarter to RM33mil, attributed to margin improvement from its construction and property development, as well as the recognition of industrial property sales to AME Real Estate Investment Trust (AME-REIT). In March, AME Elite announced that it was proposing to sell three industrial properties in Johor to AME-REIT for RM100.8mil in a related party transaction. The properties comprise one industrial property in i-Park @ Senai Airport City and two industrial properties in i-TechValley at Southern Industrial Logistic Clusters. 'AME Elite recorded RM640mil in new sales in FY25, surpassing its internal RM550mil sales target, including strong sales of RM55.9mil in the fourth quarter of FY25 from its newly launched RM1.3bil Northern TechValley in Penang,' the research house said. It added that it raised its earnings forecast for AME Elite in FY26 by 78% to reflect the delay in the recognition of data centre land sale and faised FY27 earnings by 2% on housekeeping adjustments. It also introduced its FY28 earnings forecasts which is a 4% increase year-on-year. Philip Capital Research said it had trimmed its sum-of-parts-derived target price to RM2 from RM2.10 to reflect a higher forecast gearing level in FY26. AME Elite declared a second interim dividend of three sen per share, down from four sen last year, bringing the total dividend for the year to six sen. The dividend will be paid on July 4.
The Star
23-04-2025
- Business
- The Star
AME-REIT eyes future projects for new assets
AME-REIT said the approach aims to generate stable cash flow and offer potential for long-term income and capital growth. PETALING JAYA: AME Real Estate Investment Trust 's (AME-REIT) manager plans to leverage the group's future property development projects, as well as third-party assets, to source and acquire properties in Malaysia that align with its investment strategy. In a filing with Bursa Malaysia, AME-REIT said this approach aims to generate stable cash flow and offer potential for long-term income and capital growth. For the fourth quarter ended March 31, 2025, AME REIT's net profit dipped to RM20.8mil from RM23.82mil in the same period last year. However, revenue improved to RM13.06mil from RM12.48mil a year ago. For the full financial year, AME-REIT's net profit dropped to RM47.99mil from RM51.13mil a year earlier, while revenue grew to RM50.9mil from RM48mil.
