KUALA LUMPUR, Aug 22 – Sime Darby Property Bhd has drawn positive outlooks from RHB Investment Bank and Hong Leong Investment Bank (HLIB), both of which reaffirmed their Buy calls following the developer’s second-quarter results for FY2025.
RHB Research set a target price of RM2.33, while HLIB maintained RM2.05, underscoring confidence in the group’s industrial and recurring income strategies.
Strong Sales Momentum, Industrial Expansion
Although earnings came in below expectations due to several projects being in the early stages of construction, Sime Darby Property recorded RM2 billion in sales in the first half of 2025, keeping pace with its RM3.6 billion full-year target.
RHB highlighted plans to commence three additional warehousing facilities in Bandar Bukit Raja, following full occupancy at Metrohub 1 and near full take-up at Metrohub 2. This expansion, alongside its planned REIT listing, is expected to boost recurring income. The group also declared a 1.5 sen dividend for the quarter.
Quarterly revenue rose as construction activity picked up, supported by contributions from the Bandar Bukit Raja warehouse and stronger leisure and hospitality earnings during the Aidilfitri season. Net gearing edged up to 0.31 times, reflecting investment in income-generating assets.
Diversified Portfolio and Earnings Resilience
HLIB reported that Sime Darby Property delivered a core net profit of RM142.5 million in 2Q2025, bringing first-half earnings to RM258.1 million—meeting nearly half of both its full-year and consensus forecasts. The research house said resilience will continue, backed by a diversified portfolio across residential, commercial, and industrial developments.
HLIB also noted that the completion of the East Coast Rail Link (ECRL) by 2026 will enhance the value of Sime Darby Property’s large industrial landbank near Klang. Meanwhile, recurring income is set to expand with the opening of KLGCC Mall in October 2025, which already boasts 85% occupancy. Additionally, leasing to Google for a new data centre from FY2027 is seen as a medium-term earnings catalyst.
Valuation and Outlook
HLIB maintained its forecasts with a Buy rating and a target price of RM2.05, based on a 20% discount to its revalued net asset value of RM2.56. It described Sime Darby Property as a “multi-year growth story,” underpinned by demand in the industrial segment and steady landed residential sales in Greater Klang Valley.
As of 10.28am today, Sime Darby Property’s shares were unchanged at RM1.51.
