Why Did RHB Upgrade Sunway Reit to Buy?
RHB Research upgraded Sunway Real Estate Investment Trust (Reit) from ‘Neutral’ to ‘Buy’ after its results for the June-month period met expectations.
The firm said nine-month earnings of RM349 million equalled 75% of its full-year forecast and 76% of consensus estimates.
Why Is RHB Calling the REIT an Attractive Entry Point?
RHB Research said the stock’s 20% share price derating over the past six months offers “an attractive entry opportunity”. The firm pointed to the REIT’s proven AEI track record and its ability to unlock growth through synergies across integrated malls, hotels and offices.
The firm cited Sunway Carnival’s RM360 million refurbishment, which translated into strong NPI growth. It also highlighted Sunway Pyramid’s Oasis reconfiguration, which unlocked higher rents from underutilised space.
Which AEIs Are in the Sunway Reit Growth Pipeline?
RHB Research sees improving medium-term growth, supported by targeted AEIs and chances to lift rental productivity across existing assets. Two upcoming projects stand out.
- Sunway 163 Mall: phased reopening from December
- Sunway Pyramid: additional AEIs targeted for the first quarter of 2027
The Sunway Pyramid timeline makes the project worth monitoring in upcoming earnings updates. Investors may want to watch how quickly these projects convert into rental income.
Why Are RHB and CIMB Target Prices Different?
RHB Research maintained its earnings forecasts for FY26 through FY28 but trimmed its target price to RM2.35. CIMB Securities Sdn Bhd kept its ‘Buy’ call with a lower target price of RM2.50.
CIMB lowered its target after raising its risk-free rate assumption to 4.10%, which lifted its cost of equity. The firm said nine-month earnings were in line at 76% of its full-year estimate.
What Should Sunway Reit Shareholders Watch in the Fourth Quarter?
CIMB expects earnings to strengthen sequentially in the fourth quarter. The firm named three drivers: hotel leisure travel demand at year-end, festive-driven retail spending and continued positive rental reversions across the retail portfolio.
Investors may want to watch whether those three drivers show up in the fourth-quarter numbers. For how REIT payouts fit into a portfolio, see the Dividend Investing Guide.
Key Takeaways
- RHB Research upgraded Sunway Reit from ‘Neutral’ to ‘Buy’ and trimmed its target to RM2.35.
- Nine-month earnings of RM349 million equalled 75% of RHB’s full-year forecast and 76% of consensus.
- The share price has derated 20% over six months, which RHB sees as an entry opportunity.
- CIMB Securities keeps ‘Buy’ with a RM2.50 target after raising its risk-free rate to 4.10%.
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Disclaimer: This article is general information, not investment advice. Ratings and target prices belong to RHB Research and CIMB Securities Sdn Bhd. Do your own research before making any investment decision.
Frequently Asked Questions
Did RHB upgrade Sunway Reit to Buy?
Yes, RHB Research upgraded Sunway Reit from ‘Neutral’ to ‘Buy’ after its results for the June-month period met expectations. The firm set a target price of RM2.35.
What is CIMB’s target price for Sunway Reit?
CIMB Securities kept its ‘Buy’ call with a target price of RM2.50. The lower target followed a rise in its risk-free rate assumption to 4.10%.
How much has the Sunway Reit share price fallen recently?
RHB Research said the share price has derated 20% over the past six months. The firm sees this as an attractive entry opportunity.
When will Sunway 163 Mall reopen after its refurbishment?
Sunway 163 Mall is set to reopen in phases from December, according to RHB Research. The firm expects this to support medium-term growth.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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