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KLCCP’s Upside Potential Reflected In Current Share Price
25 Nov 2025
Hong Leong Investment Bank Bhd (HLIB) has maintained its HOLD call on KLCCP Stapled Group Bhd, raising the target price to RM8.32 from RM7.90, reflecting a balanced risk-reward profile.
Analysts noted that the group’s 3Q25 results were largely in line with expectations, underpinned by sustained performance across its retail and hotel segments, while near-term positives are broadly priced in.
KLCC posted 3Q25 core net profit of RM209.1 million, up 4.3% quarter-on-quarter and 1.3% year-on-year, bringing 9M25 earnings to RM611.1 million, within 73% of HLIB’s full-year forecast and 72% of consensus. A quarterly dividend of 9.5 sen per share was declared, raising total dividends for 9M25 to 27.9 sen, slightly higher than 27.4 sen in the same period last year.
Revenue in 3Q25 rose 4.7% quarter-on-quarter, largely driven by an 18.2% gain in the hotel segment. Retail revenue expanded moderately by 2.9%, while office income remained flat. Year-on-year, overall turnover was relatively steady, with minor declines in retail (-1.9%) and hotel (-5.6%), offset by 5.2% growth in management services.
Lower finance costs, down 5.7%, helped lift core PATAMI by 1.3% year-on-year despite a slight increase in debt-related interest from the 40% acquisition of Suria KLCC in 2Q24.
Occupancy rates remained robust, with retail at 98% and office at 100%, while the group’s gearing held steady at 32%. Analysts highlighted that these stable metrics support the group’s consistent earnings generation and underpin its ability to maintain dividends.
Looking ahead, footfall at Suria KLCC is expected to remain strong through 4Q25, while Mandarin Oriental is projected to maintain firmer occupancy, aided by festive season and holiday-driven spending.
For 2026, tourism initiatives including Visit Malaysia 2026 and the Malaysia–China mutual visa exemption are expected to bolster both the retail and hotel segments, particularly with a rebound in Chinese visitors.
HLIB noted that although these factors provide upside potential, they are largely reflected in the current share price, resulting in a balanced risk-reward.
The HOLD rating is supported by a rolled-forward FY26 dividend per unit, targeting a yield of 5.3%, benchmarked against the five-year mean spread versus the Malaysia Government 10-year bond.
Analysts expect low single-digit growth in the near term, with the group’s core earnings underpinned by continued tourism and retail recovery.
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