KGI Securities analyst Megan Choo has adjusted her target price for LHN downwards from 49 cents to 44 cents while retaining her “outperform” call for the counter.
This follows LHN’s FY2021 ended September results which missed her expectations. LHN logged $121 million in revenue for the year, representing a 9.9% y-o-y decline, compared to a 0.9% y-o-y increase projected by Choo for FY2021.
To that end, Choo has lowered her forecasted FY2022 revenue by 10.7% to $126.7 million, while net profit after tax forecast was adjusted 13.3% lower. Consequently, her FY2022 earnings per share (EPS) forecast stands at 7.25 cents, compared to 8.21 cents previously.
The lower EPS underpins her lower target price, which is pegged to an unchanged FY2022 P/E ratio of six times.
Nonetheless, Choo remains upbeat on LHN’s outlook, noting that despite the lowered forecast, LHN’s projected FY2022 EPS still represents a 4.5% y-o-y increase from actual FY2021 EPS of 6.94 cents.
Choo believes FY2022 will be a better year for LHN, given its enlarged portfolio. LHN acquired four residential properties in FY2021 and one residential property in 1QFY2022 which is expected to commence operations in the current financial year.
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“These five properties will add a total of approximately 204 keys to LHN’s residential segment. In addition, full year revenue contribution is expected from the two newly acquired [joint venture properties under the industrial segment,” she says in a Dec 23 research note.
Choo is also bullish on the Mount Elizabeth property LHN, through its subsidiary Erinite Properties, has leased from Eastern Realty. The property is due to commence operations at the end of 2022, adding approximately 400 keys.
Additionally, Choo highlights that LHN has proposed to spin-off and separate the listing of LHN Logistics on the Catalist board of SGX.
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See: LHN plans to spin off logistics business for separate Calist listing
As at 2.08pm, shares in LHN are up 0.5 cents or 1.67% higher at 30.5 cents.
