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Stock Review – ALAQAR (5116) (AL-AQAR HEALTHCARE REIT)


Sector : Real Estate Investment Trust

Sub Sector : Real Estate Investment Trust

Focus : Healthcare

Company Profile:

ALAQAR is managed by Damansara REIT Managers Sdn Bhd, a wholly-owned subsidiary of Johor Corporation Group (JCorp) and support by KPJ Healthcare Berhad.

As of December 2019, ALAQAR consists of 23 properties comprising of 17 hospitals, 3 wellness/ healthcare centres, 2 colleges and 1 aged care and retirement village. One of them is located in Queensland Australia.

Properties:

a) Hospitals

Property Name

Location

Tenancy Expiry

Rental / GFA (2018)

Rental / GFA (2019)

KPJ AMPANG PUTERI SPECIALIST HOSPITAL

Ampang, Selangor

June 2021

24.95

25.45

KPJ DAMANSARA SPECIALIST HOSPITAL

Petaling Jaya, Selangor

June 2021

19.25

19.64

KPJ JOHOR SPECIALIST HOSPITAL

Johor Bharu, Johor

June 2021

17.45

17.66

KPJ PUTERI SPECIALIST HOSPITAL

Johor Bharu, Johor

June 2021

23.69

24.16

KPJ SELANGOR SPECIALIST HOSPITAL

Shah Alam, Selangor

June 2021

18.01

18.37

KPJ IPOH SPECIALIST HOSPITAL

Ipoh, Perak

June 2021

13.99

14.11

KPJ PERDANA SPECIALIST HOSPITAL

Kota Bharu, Kelantan

February 2020

22.02

22.46

SENTOSA MEDICAL CENTRE

Kuala Lumpur

June 2021

24.41

24.90

KPJ KAJANG SPECIALIST HOSPITAL

Kajang, Selangor

February 2020

17.45

17.80

KEDAH MEDICAL CENTRE

Alor Setar, Kedah

February 2020

17.33

17.68

KPJ PENANG SPECIALIST HOSPITAL

Bukit Mertajam, Pulau Pinang

October 2021

25.69

25.26

KPJ TAWAKKAL SPECIALIST HOSPITAL

Kuala Lumpur

July 2022

25.44

25.69

KPJ SEREMBAN SPECIALIST HOSPITAL

Seremban, Negeri Sembilan

October 2024

26.08

26.77

TAIPING MEDICAL CENTRE

Taiping, Perak

April 2021

17.75

17.87

KLUANG UTAMA SPECIALIST HOSPITAL

Kluang, Johor

January 2021

9.30

9.49

KPJ KLANG SPECIALIST HOSPITAL

Klang, Selangor

June 2021

20.63

20.60

KPJ BATU PAHAT SPECIALIST HOSPITAL

Batu Pahat, Johor

December 2022


0.15

 b) 

Wellness / Healthcare Centre

Property Name

Location

Tenancy Expiry

Rental / GFA (2018)

Rental / GFA (2019)

KUANTAN WELLNESS CENTRE

Kuantan, Pahang

June 2021

20.38

20.79

DAMAIN WELLNESS CENTRE

Kota Kinabalu, Sabah

June 2021

25.15

20.72

TAWAKKAL HEALTH CENTRE

Kuala Lumpur

May 2021

26.22

26.74

c) College 

Property Name

Location

Tenancy Expiry

Rental / GFA (2018)

Rental / GFA (2019)

KPJ HEALTHCARE UNIVERSITY COLLEGE, NILAI

Nilai, Negeri Sembilan


9.68

15.68

KPJ INTERNATIONAL COLLEGE, PENANG

Bukit Mertajam, Pulau Pinang

October 2021

27.84

26.64


d) 
Aged and retirement village

Property Name

Location

Tenancy Expiry

Rental / GFA (2018)

Rental / GFA (2019)

JETA GARDENS AGED CARE & RETIREMENT VILLAGE

Queensland, Australia


9.68

15.68

Fee

ALAQAR maintenance fee had increase from RM 599,810 in 2016 to RM 2,113,889 in 2019 which is Compound annual growth rate of 37.01 %. This made the maintenance fee / rental increase from 0.61 % to 2.11 %.

For the year 2009 to 2019, the management fee is range 1.40 % – 2.36 % of total rental income while the total fee is range  2.47% - 4.41 %.


From the chart above, the gross income for ALAQAR had drop significantly in 2016 and slight more in 2017. This is because of disposal of Rumah Sakit Bumi Serpong Damai and Rumah Sakit Medika Permata Hijau from Indonesia in 2016 and further disposal of Selesa Tower, Johor Bharu in 2017.

However there is an increase in nett income in 2017 and 2018, this is mainly because of higher gain on fair value on investment properties which is RM 24,791,923 and RM 30,341,920 which is paper gain. The REIT does not have any benefit from the gain on fair value on investment properties besides increase the value of asset. ALAQAR also had to pay more tax due to the profit recorded in the income statement. The same go to year 2011 where the nett profit is higher than the gross profit. In 2011 ALAQAR recorded fair value gain of RM 38,794,262.

Market Capitalisation vs Nett Asset

From the chart, ALAQAR had trade at a premium during 2012 to 2017.

Dividend

Over the past  year 2010 to 2019, ALAQAR had pay to shareholder an average dividend of 7.51 sen which is 5.73 % of the today price 1.31 (i November 2020).

Convid 19

During the pandemic, ALAQAR had provide assistance to its tenants in the form of rental rebate. From the quarter report for financial end 30 June 2020, the gross revenue from the first six month of 2020 had decrease by 6.4 % compared to first 6 month of 2019 besides that the property expense had increase by 10 %.

Besides that the trust expense had also increase by 5 % compare to the first 6 months of 2019. The net earning per share for the first 6 month had reduce from 4.24 sen in 2019 to 3.54 sen in 2020  which is 16.5 % decrease.

With the government of Malaysia declare Conditional MCO in Sabah, Selangor, Kuala Lumpur, Putrajaya and recently Johor Bharu, these would further affect the tenant of ALAQAR. Further discount on the rental rate might be given to the tenants.

Market Research

MIDF AMANAH INVESTMENTBANK BHD (1 September 2020)

Price Target : RM 1.42

  • 1HFY20 earning below expectation
  • Earning weight by rental rebate
  • Earning drag by higher financial cost
  • Earning forecast reduce

IVKLS Value

1.06

http://ivkls.blogspot.com/2020/10/stock-review-alaqar-5116-al-aqar.html

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