[Maybank Kim Eng] Today's Research - Malaysia

27 Oct 2015, Tuesday

g Company Research - Al-Salam REIT: An all-rounder Islamic REIT; Initiate BUY | Kevin Wong - DiGi.com: Expect a 4Q rebound instead | Chi Wei Tan g Macro Research - Malaysia: Labour Statistics, Aug 2015 - Stable… | Suhaimi Ilias - Singapore: Industrial Production, Sep ‘15 - Persistent weakness… | Suhaimi Ilias - Malaysia: Technicals - Index is losing upside momentum | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: Al-Salam REIT (SALAM MK) Share Price: MYR0.99 Target Price: MYR1.07 Recommendation: Buy Kevin Wong (603) 2082 6824 kevin.wong@maybank-ib.com Wei Sum Wong (603) 2297 8679 weisum@maybank-ib.com Initiation: An all-rounder Islamic REIT; Initiate BUY FYE na (MYR m) FYna FYna FY15E FY16E Revenue na na 73.5 76.5 Net property income na na 52.8 55.0 Distributable income na na 31.6 34.0 DPU (sen) na na 4.9 5.3 DPU growth (%) na na na 7.4 Price/DPU(x) na na 20.2 18.8 P/BV (x) na na 1.0 1.0 DPU yield (%) na na 5.0 5.3 ROAE (%) na na na 6.0 ROAA (%) na na na 3.7 Debt/Assets (x) na na 0.4 0.4 §  An Islamic REIT with a well-diversified asset portfolio. §  We like its quality assets and earnings resilience backed by long and triple net leases with step-up features. §  Initiate coverage with a BUY and a MYR1.07 DCF-based TP (13.4% total return including 5.3% FY16 net yield). MY: DiGi.com (DIGI MK) Share Price: MYR5.53 Target Price: MYR5.40 Recommendation: Hold Chi Wei Tan (603) 2297 8690 chiwei.t@maybank-ib.com Results Review: Expect a 4Q rebound instead FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 6,733.4 7,018.5 7,041.9 7,279.4 EBITDA 3,042.8 3,163.5 3,098.4 3,202.9 Core net profit 1,705.9 2,031.1 1,867.5 1,891.7 Core EPS (sen) 21.9 26.1 24.0 24.3 Core EPS growth (%) 41.5 19.1 (8.1) 1.3 Net DPS (sen) 21.3 26.0 24.0 24.3 Core P/E (x) 25.2 21.2 23.0 22.7 P/BV (x) 65.0 62.7 62.7 62.7 Net dividend yield (%) 3.9 4.7 4.3 4.4 ROAE (%) 369.9 301.5 272.2 275.7 ROAA (%) 43.9 50.4 42.8 42.5 EV/EBITDA (x) 12.8 15.3 14.1 13.7 Net debt/equity (%) 51.2 77.0 110.8 137.2 §  9M15 net profit was below, as our expectation of a sequential rebound in 3Q15 revenue failed to materialise. §  Competitive intensity in the prepaid segment likely peaked in Jun-Aug 2015; however margin pressure could persist in the next 1-2 quarters due to a weak Ringgit. §  FY15/16 earnings lowered by 7% each; maintain HOLD with a lower TP of MYR5.40 (-7%). MY: Labour Statistics, Aug 2015 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Stable… §  Unemployment rate was stable at 3.2%. §  News of workers retrenchments broadening into banking sector of late. §  Minimum Wage is raised 11%-15% effective 1 July 2016. SG: Industrial Production, Sep ‘15 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Persistent weakness… §  Industrial output shrank for the eighth consecutive month in Sep 2015 by -4.8% YoY. §  It contracted by slightly more in 3Q 2015 at -6.2% YoY vs advanced manufacturing GDP estimate of -6.0%. §  Short-term outlook is weak as lower new orders and higher stock of finished goods curb production. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index is losing upside momentum §  SAPRES - On a very strong upward Wave 3 and 5 move. §  FBMKLCI – The index is losing upside momentum. §  Supports of 1,675 and 1,700 may be weaker. §  Resistances of 1,706 and 1,727 will cap any rebound. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —  U.S: Sales of new homes slump to lowest level since November —  Germany: Business confidence fell for the first time in four months in October —  S. Korea: Consumer confidence rises to 105 in Oct from 103 in Sept Malaysia —  Economy: ValueCap to pick firms from six key sectors —  Property development: 1MDB's Bandar Malaysia gets planning approval —  Infrastructure: DanaInfra raises MYR50b for MRT lines —  Bina Puri Holdings: Secures PR1MA job in Johor —  Yong Tai: Has projects with GDV of MYR5.6b