Company Coverage
Pavilion REIT (PREIT MK) : 2Q26: In Line; Improving Occupancies Towards Year-End
BUY (Maintained)
Current price:
Target price:
Upside:
RM1.75
RM2.10
+20.0%
Analyst
Highlights
- 2Q26 results are within our expectations, with a dividend of 2.37 sen declared.
- Retail fundamentals remained healthy, with positive rental reversions and tenant sales, while management expects a better 3Q26 qoq amid improving occupancies, tourist footfall, and ongoing mid-year sales. Recurring electricity tariff savings provide an additional earnings and margin tailwind.
Maintain BUY with an unchanged target price of RM2.10. PREIT currently offers a dividend yield of 5.9%/6.1% for 2026/27 respectively.
Analysis
- Within expectations. Pavilion REIT (PREIT) reported 2Q26 revenue of RM221m (-10% qoq, +4% yoy) and core net profit of RM89m (-16% qoq, +13% yoy). This brings 1H26 core net profit to RM195m (+15% yoy), which is in line and represents 50% and 49% of our and consensus full-year estimates respectively. Average cost of debt was flat qoq at 4.3% p.a..
A dividend of 2.37 sen was declared for 2Q26 (+4% yoy), bringing 1H26 DPU to 5.17 sen, and representing 50% of our and consensus full-year forecasts. 1H26 DPU implies an annualised yield of 5.9%.
Highlights
- 2Q26 results are within our expectations, with a dividend of 2.37 sen declared.
- Retail fundamentals remained healthy, with positive rental reversions and tenant sales, while management expects a better 3Q26 qoq amid improving occupancies, tourist footfall, and ongoing mid-year sales. Recurring electricity tariff savings provide an additional earnings and margin tailwind.
Maintain BUY with an unchanged target price of RM2.10. PREIT currently offers a dividend yield of 5.9%/6.1% for 2026/27 respectively.
Analysis
- Within expectations. Pavilion REIT (PREIT) reported 2Q26 revenue of RM221m (-10% qoq, +4% yoy) and core net profit of RM89m (-16% qoq, +13% yoy). This brings 1H26 core net profit to RM195m (+15% yoy), which is in line and represents 50% and 49% of our and consensus full-year estimates respectively. Average cost of debt was flat qoq at 4.3% p.a..
A dividend of 2.37 sen was declared for 2Q26 (+4% yoy), bringing 1H26 DPU to 5.17 sen, and representing 50% of our and consensus full-year forecasts. 1H26 DPU implies an annualised yield of 5.9%.
BUY (Maintained)
Current price:
Target price:
Upside:
RM1.75
RM2.10
+20.0%
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: https://research-api.uobkayhian.com/assets/disclaimer/df64a6ea-7980-447c-ae9e-fd19b93257dc, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
