[Maybank Kim Eng] Today's Research - Malaysia

29 Oct 2015, Thursday

g Company Research - UMW Oil & Gas: Naga 7 secures job from PCSB | Thong Jung Liaw - Maxis Bhd: Revenue growth delivered | Chi Wei Tan g Sector Research - Regional Plantations: Key takeaways from Conference | Chee Ting Ong g Macro Research - Malaysia: Technicals - Imminent Rising Wedge Breakdown | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: UMW Oil & Gas (UMWOG MK) Share Price: MYR1.17 Target Price: MYR0.80 Recommendation: Sell Thong Jung Liaw (603) 2297 8688 tjliaw@maybank-ib.com Ivan Yap (603) 2297 8612 ivan.yap@maybank-ib.com Company Update: Naga 7 secures job from PCSB FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 737.8 1,016.3 954.4 892.3 EBITDA 311.8 411.9 181.8 77.0 Core net profit 166.4 248.5 (81.9) (184.3) Core EPS (sen) 7.7 11.5 (3.8) (8.5) Core EPS growth (%) 182.5 49.4 nm nm Net DPS (sen) 0.0 100.0 0.0 0.0 Core P/E (x) 15.2 10.2 (30.9) (13.7) P/BV (x) 0.9 0.8 0.8 0.9 Net dividend yield (%) 0.0 85.5 0.0 0.0 ROAE (%) 10.9 8.2 (2.6) (6.1) ROAA (%) 5.7 5.2 (1.4) (3.0) EV/EBITDA (x) 26.6 15.0 27.1 64.0 Net debt/equity (%) net cash 33.6 76.6 81.2 §  This 9-month job commencing 4Q15 is 6 months ahead of our expectation; DCR similar to current market rates at sub-USD100k. §  Cut FY15 loss forecast by 21% to reflect this contract. FY16/17 estimates are unchanged, having imputed job wins. §  Maintain SELL with an unchanged MYR0.80 TP, based on unchanged 0.8x EV/replacement value peg. MY: Maxis Bhd (MAXIS MK) Share Price: MYR6.65 Target Price: MYR7.00 Recommendation: Hold Chi Wei Tan (603) 2297 8690 chiwei.t@maybank-ib.com Results Review: Revenue growth delivered FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 9,084.0 8,389.0 8,664.1 8,891.0 EBITDA 4,191.0 4,220.0 4,288.8 4,401.1 Core net profit 1,765.0 1,718.0 1,828.7 2,067.7 Core EPS (sen) 23.5 22.9 24.4 27.5 Core EPS growth (%) (4.9) (2.7) 6.4 13.1 Net DPS (sen) 40.0 40.0 25.0 26.0 Core P/E (x) 28.3 29.1 27.3 24.2 P/BV (x) 8.3 10.6 10.7 10.4 Net dividend yield (%) 6.0 6.0 3.8 3.9 ROAE (%) 27.0 32.1 39.0 43.8 ROAA (%) 10.0 9.7 10.2 11.6 EV/EBITDA (x) 14.6 14.0 13.4 13.0 Net debt/equity (%) 112.4 158.9 162.9 155.7 §  9M15 net profit was in line at 70% of our full-year forecast; we expect a sequentially stronger 4Q. §  Its prepaid division is recovering well, but overall dividend yield is no longer compelling. §  Maintain HOLD with an unchanged TP of MYR7.00. RN: Regional Plantations Recommendation: Neutral Chee Ting Ong (603) 2297 8678 ct.ong@maybank-ib.com Sector Note: Key takeaways from Conference §  A situational and not a structural play is building up for 1H16 on strong El Nino. But high palm oil stockpile, ample soybean supply, and low crude oil price to cap near term upside. §  Sustainability is the key for the future for palm oil. §  NEUTRAL for now given poor upcoming results season. But position for trading in 1H16 post this results season. Top BUY is SOP. SELL AALI. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Imminent Rising Wedge Breakdown §  SEM - On a strong downward Wave 5 move. §  FBMKLCI – Imminent Rising Wedge Breakdown. §  Supports of 1,660 and 1,684 will be weaker. §  Resistances of 1,686 and 1,715 will cap any rebound. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —  U.S: Fed considers December rate rise —  U.S: The House passed a two-year budget plan —  Japan: Industrial production unexpectedly rose in September —  Australia: Faces low-inflation trap Malaysia —  MRCB: To redevelop sports complex —  MRCB: To build new MYR11b city in Cyberjaya —  MRCB: Clinches Kwasa Utama deal —  Eastern & Oriental: Awards Penang STP2 reclamation job to China company