KIPREIT’s 1QFY26 CNP came in at RM17.9m (+68.6% YoY, +11.9% QoQ), within our expectations, accounting for 25.4% of our full-year forecast and 27.1% of consensus.
The Group declared two advance income distributions for 1QFY26, totalling 1.80 sen/unit: the first at 0.60 sen (ex-date: 20 Aug 2025) and the second at 1.20 sen (ex-date: 10 Oct 2025).
Outlook remains positive, underpinned by (i) incremental contributions from newly acquired retail and industrial assets, which strengthen income stability, (ii) the ongoing MyKasih programme that continues to drive strong footfall and support tenant sales, particularly within the supermarket and F&B segments, (iii) earnings accretion from the AEI at KIPMall Tampoi, which will add ~10,000 sq ft of NLA and is projected to generate a 6.5% yield (c.RM1.4m), contributing to FY27/FY28 earnings, and (iv) a resilient portfolio with an average occupancy rate of 98.3%, reflecting sustained demand for its necessity-driven community retail and industrial assets.
We reiterate our BUY recommendation with an unchanged target price of 0.95, based on a 7% target distribution yield applied to FY26F DPU of 6.6 sen.
Results within expectations. After factoring in changes in the fair value of investment properties (-RM0.6 m) and other items (-RM0.03 m), 1QFY26 core net profit (CNP) came in at RM17.9 m (+68.6% YoY, +11.9% QoQ). The results were in line with expectations, accounting for 25.3% of our full-year estimate and 27.1% of consensus.
YoY/YTD. Revenue surged 52.6% YoY to RM40.8 m, driven by stronger performances across both the retail and industrial segments, which rose 54.2% and 27.9%, respectively. Coupled with improved cost efficiency, CNP jumped 68.6% YoY to RM17.9 m. The stronger showing was mainly attributed to higher occupancy, rental reversion, and contribution from new assets, including D’Pulze, TF Value, KIPMall Desa Coalfields, and the industrial properties in Cheras Jaya and Bintulu.
QoQ. CNP rose 11.9% QoQ to RM17.9m, driven by improved cost efficiency and lower finance expenses as well as higher revenue of RM40.8m (+2.2 QoQ). The improved top line was attributed incremental income from the newly acquired KIPMall Desa Coalfields.
Dividends. The Group declared DPU of 1.80 sen for 1QFY26, comprised of 0.60 sen (ex-date: 20 Aug 2025) and 1.20 sen (ex-date: 10 Oct 2025).
Outlook. KIPREIT is expected to sustain stable growth, anchored by its portfolio of necessity-driven community retail assets. The MyKasih programme continues to boost footfall and strengthen tenant sales, particularly among supermarket operators and F&B tenants, leading to higher Gross Turnover Rent (GTO). Earnings will also be supported by partial-year contributions from KIPMall Kuantan and the industrial assets in Bintulu and Pasir Gudang. The impact of the 8% SST remains minimal, with portfolio occupancy improving to 98.3% (from 97.3% in 4QFY25). For FY26, AEI efforts will centre on KIPMall Tampoi, slated for completion in Feb 2026. The RM22.0m enhancement will add approximately 10,000 sq ft of net lettable area and is projected to generate a 6.5% yield (c.RM1.4m) in incremental rental income, contributing about 0.8%/0.7% to FY27F/FY28F earnings. Management reiterated its long-term target to grow assets under management (AUM) from RM1.7bn (up from RM1.5bn in 4QFY25) to RM2.0bn by FY27, supported by healthy rental reversions of 5–10%.
Earnings Revision. No changes are made to our earnings forecast, as the results were in line with our expectations.
Valuation & Recommendation. We maintain our BUY recommendation with an unchanged TP of RM0.95, based on a 7% target distribution yield applied to FY26F DPU of 6.6 sen.
Risks. (i) Dilution risk from private placement, (ii) weaker consumer sentiment impacting retail performance, and (iii) governance risks involving key shareholders, and (iv) potential delays in asset completion or AEI execution.
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Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
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| Currency | Buy Rates (RM) | Sell Rates (RM) | 
|---|---|---|
| USD | 4.183360 | 4.212600 | 
| EUR | 4.873028 | 4.878308 | 
| CNY | 0.589871 | 0.590472 | 
| HKD | 0.538522 | 0.542295 | 
| SGD | 3.220053 | 3.242721 |