CIMB Securities has maintained its BUY call on Sime Darby Property Bhd with an unchanged target price of RM1.72, implying 30.3% upside, after its 1H26 results came in line with expectations.
The research house said the developer’s decision to raise its dividend payout policy to 40–60% of core profit from 20% further strengthens the investment case.
Sime Darby Property’s 2Q26 core profit surged 113% quarter-on-quarter to RM175 million, helped by RM27 million in maiden lease income from its Elmina Business Park data centre, which was completed in March. This lifted 1H26 core profit to RM257 million, broadly unchanged year-on-year and representing 52% of CIMB’s full-year forecast.
The group’s gross margin also improved 1.5 percentage points year-on-year to 34.8%, while new property sales reached RM1.8 billion in 1H26. CIMB said the developer remains on track for its RM4 billion FY26 sales target, supported by a larger RM2.7 billion launch pipeline in the second half and RM1 billion in bookings as of 9 August.
Meanwhile, Sime Darby Property’s assets under management reached RM5 billion in July following progress at its E-Metro Logistics Park, putting it halfway towards its RM10 billion 2028 target.
CIMB said the higher dividend payout is supported by the group’s expanding recurring income portfolio and healthy net gearing of 35%. The stock also trades at a 53% discount to its sum-of-the-parts valuation, with higher data centre and industrial lease income identified as a key re-rating catalyst.
As of 11.21 am, the stock price rose 6.06% to RM1.40.
