MIDF Research increased its ‘buy’ recommendation from its previous ‘neutral’ to Axis REIT after the firm saw a year -on -year decline of 9.9% in the share price as an opportunity for investors to make a purchase.
The increase in the recommendation follows the announcement by the company which acquired industrial assets in Bukit Raja, Shah Alam last Friday.
In a note today, MIDF said the revenue impact from the acquisition is expected to be at a minimum of less than 1% of financial year 2021/ financial year 2022 (FY21/ FY22) income ending 31 December.
“We took a neutral approach to the proposed acquisition of industrial assets in Bukit Raja as the acquisition is in line with Axis REIT’s strategy to expand its portfolio of industrial assets,” said its analyst Jessica Low Jze Tieng.
MIDF, which maintained its target price on Axis REIT at RM1.98, said the company's performance remained stable as its portfolio of industrial assets was relatively sheltered in the Covid-19 pandemic.
Meanwhile, according to MIDF, Axis REIT's net dividend yield is estimated at about 4.4%.
Axis REIT has announced that it will enter into a sale and purchase agreement for a freehold industrial property in Bukit Raja in Shah Alam with a total cash consideration of RM120 million.
The proposed acquisition is expected to be completed in the first half of this year.
At the time of writing, Axis REIT shares jumped 4 sen or 2.19% to RM1.87, bringing its market capitalization to RM2.7 billion.
