KUALA LUMPUR (April 17): MIDF Research has initiated coverage on KLCC Stapled Group with a “Neutral” rating and target price of RM6.88 and said it was the largest REIT in Malaysia with a market cap of RM12.9 billion.
In a note today, the research said KLCC Stapled Group was also a component member of FBM KLCI.
MIDF Research said KLCC Stapled Group had resilient rental income as 41% of FY14 revenue is from long-term lease with its major shareholder (Petronas).
“Superior balance sheet against peers with lowest debt to asset ratio and highest percentage of fixed rate debt.
“But valuation is already at premium against peers. Expect a modest growth in FY15 Core Net Income of 2% year-on-year to RM592.6 million.
“Initiate coverage with Neutral recommendation and a target price of RM6.88,” it said.