Hwang DBS retains Quill Capital on Buy, RHB Research says Sell

From Star Online: Business

2nd August 2013

 

KUALA LUMPUR: HwangDBS Research is maintaining its Buy calls on real estate investment trust Quill Capital Trust but is revising its target price to RM1.40 from RM1.45, while RHB Research says it’s time to Sell.

According to HwangDBS Research, QCT’s first-half earnings were well within estimates, noting that the 4.1 sen dividend declared amounted to a 94% payout but said it was cutting earnings estimates for the financial years 2013-2015 by 5-8% because of softer rental reversions and the zero contribution to earnings from their Quill Building 10 in PJ’s Section 13.

The second quarter net profit at RM9mil was 3% lower year-on-year (plus 10% q-o-q) on slightly lower revenue and weaker net property income margin.

“We attribute the lower revenue to vacancy at Quill Building 10 – a result of high office space supply and attraction of newer office buildings (QB10 is now seven years old),” it said.