It also points out that there are “clear signs” of pressure on mall occupancy and rents.
“We expect the retail sector outlook to remain challenging in the mid- to long-term with Covid-19 accelerating structural headwinds,” RHB analyst Vijay Natarajan writes in a note dated July 23.
RHB has lowered its distribution per unit (DPU) forecast for FY20 by 6% to factor in additional rent rebates.
However, the brokerage has raised its DPU forecasts for FY21-22 by 1% on lower interest costs.
RHB has maintained its “neutral” recommendation for CMT with an unchanged target price of $2.03.
On the other hand, Phillip Securities has kept its “buy” call for CMT with an unchanged target price of $2.33.
“We are keeping our estimates unchanged as we have previously incorporated [about] $80 million of out-of-pocket (OOP) rental rebates, above the $76.5 million OOP rebates guidance for 1H20,” Phillip analyst Natalie Ong writes in a July 24 report.
Similarly, Maybank Kim Eng has reiterated its “buy” rating for CMT albeit with a lower target price of $2.35 from $2.40 previously.
It notes that CMT’s valuations are undemanding at 6.0% FY21 yield and 1-time book value.
It points out that CMT’s balance sheet remains strong with a low leverage level of 34.4%, interest coverage of 4.2 times and debt headroom of $2.9 billion to $4.4 billion.
As at 3.35 pm, CMT was down 4 cents or 2% at $1.99 with 8.7 million units changed hands.
