[Maybank Kim Eng] Today's Research - Malaysia

25 Sep 2015, Friday

g Company Research - Padini: Weathering near-term challenges | Kevin Wong g Sector Research - Malaysia Consumer: Ears on the ground | Liew Wei Han g Macro Research - Malaysia: Malaysia CPI, August 2015 - Lower, on lower pump prices | Suhaimi Ilias - Malaysia: Leading Indicator, July 2015 - Challenges ahead | Suhaimi Ilias - Singapore: Singapore CPI, Aug ‘15 - Deflation persists | Suhaimi Ilias - Malaysia: Technicals - Index to fall below 1,600 | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: Padini (PAD MK) Share Price: MYR1.39 Target Price: MYR1.30 Recommendation: Hold Kevin Wong (603) 2082 6824 kevin.wong@maybank-ib.com Company Update: Weathering near-term challenges FYE Jun (MYR m) FY14A FY15A FY16E FY17E Revenue 866.3 977.9 1,029.0 1,146.9 EBITDA 147.6 142.5 144.7 164.2 Core net profit 90.9 80.2 83.7 94.6 Core EPS (sen) 13.8 12.2 12.7 14.4 Core EPS growth (%) 6.5 (11.8) 4.4 13.0 Net DPS (sen) 11.5 10.0 10.0 10.0 Core P/E (x) 10.1 11.4 10.9 9.7 P/BV (x) 2.4 2.3 2.1 2.0 Net dividend yield (%) 8.3 7.2 7.2 7.2 ROAE (%) 23.9 20.2 20.1 21.4 ROAA (%) 16.8 13.7 13.6 14.4 EV/EBITDA (x) 8.0 4.7 4.9 4.3 Net debt/equity (%) net cash net cash net cash net cash §  SSSG has been decent but margins could remain suppressed from promotions, softer consumer sentiment, weak MYR; 16 new outlets (9 BOs, 7 PCS) planned for FY16 (10 in FY15). §  Lower FY16-18 earnings by 7-9% considering softer margins. §  Maintain HOLD with a lower MYR1.30 TP (-5sen); share price downside is limited by its 7.2% net yield (FY16). MY: Malaysia Consumer Recommendation: Neutral Liew Wei Han (603) 2297 8676 weihan.l@maybank-ib.com Sector Note: Ears on the ground §  Our price study shows that C-store products are priced at a premium of up to 15% over the products in mini-marts, hypermarkets, and petro marts. §  Price premium is largely justified by convenience offered but there is room for pricing to narrow over time as economies of scale improve. §  What is more critical for C-stores such as 7EM would be margin enhancement from a shift away from low margin to higher margin product and services. HOLD maintained on 7EM (TP: MYR1.50, fair valuations for now). MY: Malaysia CPI, August 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Lower, on lower pump prices §  Headline inflation in Aug 2015 moderated to +3.1% YoY from +3.3% YoY a month earlier. §  The lower inflation was helped by the downward adjustment in domestic fuel pump prices. §  Maintain our 2015 inflation forecast of 2.0%-2.5%. MY: Leading Indicator, July 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Challenges ahead §  Index of leading indicators increased by +0.9% MoM in July 2015. §  However on a YoY basis, growth continued to point towards softer economic momentum. §  Subdued by domestic issues and global uncertainties. SG: Singapore CPI, Aug ‘15 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Deflation persists §  Consumer prices fell for the 10th month in Aug 2015 as it contracted by -0.8% YoY (Jul 2015: -0.4% YoY). §  However core inflation (CPI ex-accommodation and private road transport) stayed borderline positive at +0.2% YoY (Jul 2015: +0.4% YoY). §  We estimate headline CPI forecast this year to range between -0.5%-0.0% (2015 YTD: -0.4%). MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index to fall below 1,600 §  OLDTOWN - On a very strong downward Wave 5 move. §  FBMKLCI – Index to fall below 1,600. §  Supports of 1,586 and 1,609 will be weaker. §  Resistances of 1,613 and 1,661 will cap rebounds. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —    U.S: Orders for business gear stall after two-month gain —    U.S: Sales of new homes surged in August to seven-year high —    Germany: Business confidence rises in September in sign of strong recovery —    Philippines: Holds interest rates with growth seen quickening Malaysia —   Steel: Anti-dumping duties on painted steel coils from China —   Eco World: To meet state govt —   RHBCap: Postpones rights issue to Nov 19