Highlights of today’s AmBank FX Daily Outlook as follow:-
v Higher than expected initial jobless claims weighed on dollar
v MYR to fluctuate in the range of 4.2611-4.2884 against US dollar
v Key watch: (i) US Fed Dudley, Bullard, Powell and Mester speeches; (ii) June US Markit Manufacturing PMI; (iii) May US new home sales; (iv) June EU Markit Manufacturing PMI
Friday, June 23, 2017
STOCK FOCUS OF THE DAY
MKH : Expands solid growth story beyond Kajang HOLD
We initiate our coverage on MKH Bhd (MKH) with a BUY recommendation and a fair value of RM3.00 per share, based on a sum-of parts (SOP) valuation. While property development and oil palm plantation are MKH’s core businesses, it has diverse business interests, spanning a wide range of sectors that includes investment property, property management, construction, trading and furniture manufacturing.
Since its founding, MKH has thrived, transforming Kajang into one of the fastest-growing townships in Malaysia, becoming part of Greater Kuala Lumpur. MKH is planning a total RM948mil of new launches in FY17, focusing on affordable residential projects. Beyond FY17, it has several developments with potential GDV of RM9.0bil. MKH has been able to sustain its new property sales level at around the RM800mil mark for the last 3 years amidst the slowdown in the domestic property market. We believe this is due to the group staying true to its core competency, focusing on the affordable segment market.MKH recorded outstanding revenue growth, with its FY11-FY16 5-year revenue compounded annual growth rate (CAGR) standing at 32.8%.
We expect this strong track record to be sustained moving forward, anchored by its property development and plantation divisions. Its earnings growth has been more impressive than its revenue growth. It registered FY11-FY16 5-year operating profit CAGR of 52.3%, while its 5-year net profit CAGR stood at 40.1% for the same period. With a strong management team in place, we believe the group will maintain this commendable track record in the foreseeable future.
MISC : Expanding offshore division HOLD
STOCKS ON RADAR
Leader Steel Holdings, HSS Engineers, Aeon Credit Service, Malaysian Pacific Industries
The Philippines : Room for rate hike remains
SP Setia : SP Setia acquires I&P Group for RM3.65bil
IHH Healthcare : IHH dismisses report it’s close to buying India’s Fortis
George Kent : George Kent tendering for RM4b worth of jobs
JAKS Resources : Property unit turnaround takes time — JAKS Resources
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