HLIB has maintained its HOLD call on KLCCP Stapled Group Bhd with a lower target price of RM8.51 from RM8.67, citing a balanced risk-reward profile despite expectations of a steadier second half of 2026.
HLIB Research analyst said the group’s 2QFY26 core profit after tax and minority interests (PATMI) rose 2% year-on-year to RM204.4 million, bringing 1HFY26 core PATMI to RM407.5 million, up 1.4%. The results were slightly below expectations at 46.9% of HLIB’s full-year forecast and 47% of consensus.
The weaker showing was mainly due to temporary room inventory constraints at Mandarin Oriental, where 34 serviced apartments are undergoing renovation. The hotel recorded a loss before tax of RM4.3 million in 1HFY26.
Revenue for the quarter increased 1.3% year-on-year to RM415.7 million, supported by stronger retail and management services contributions while office revenue remained stable. These gains helped offset the 7.6% decline in hotel revenue.
The group declared an interim dividend of 9.30 sen per unit, bringing its 1HFY26 distribution to 18.60 sen per unit compared with 18.40 sen a year earlier.
HLIB expects 2H26 earnings to remain anchored by KLCC’s fully occupied office portfolio and stable triple-net leases. Hotel operations are expected to recover in 4Q26 following the targeted completion of the serviced apartment renovations on Oct 1, coinciding with the Formula 1 event.
Retail momentum is also improving, with tenant sales declining 3% year-on-year in June compared with an 11% decline a year earlier. HLIB trimmed its FY26 to FY28 earnings forecasts by 5%, 4% and 4% respectively, mainly due to weaker hotel occupancy and more cautious retail assumptions.
As of 11.21 am, the stock price slipped 0.69% to RM8.64.
