[Maybank Kim Eng] Today's Research - Malaysia

17 Nov 2015, Tuesday

g Company Research - Ta Ann: Jump in timber earnings | Li Shin Chai - WCT Holdings: Job wins at 10-year peak | Li Shin Chai - IOI Corporation: Massive forex losses hurt 1Q | Chee Ting Ong - Eco World Development: Stands out among the competition | Wei Sum Wong - Star Media Group Bhd: 3Q15 dragged down by Cityneon | Samuel Yin Shao Yang g Macro Research - Malaysia: Technicals - Index lower despite global volatility | Lee Cheng Hooi

MY: Ta Ann (TAH MK) Share Price: MYR4.09 Target Price: MYR6.90 Recommendation: Buy Li Shin Chai (603) 2297 8684 lishin.c@maybank-ib.com Results Review: Jump in timber earnings FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 769.9 1,020.7 945.9 1,098.9 EBITDA 128.5 243.2 322.6 337.4 Core net profit 60.6 110.6 164.9 169.0 Core EPS (sen) 16.3 29.8 44.5 45.6 Core EPS growth (%) 5.2 82.6 49.1 2.5 Net DPS (sen) 5.0 20.0 20.0 20.5 Core P/E (x) 25.0 13.7 9.2 9.0 P/BV (x) 1.5 1.4 1.3 1.2 Net dividend yield (%) 1.2 4.9 4.9 5.0 ROAE (%) 6.1 10.7 15.0 14.2 ROAA (%) 3.5 6.0 8.6 8.4 EV/EBITDA (x) 14.3 6.9 5.1 4.8 Net debt/equity (%) 25.5 18.7 9.2 6.2 §  3Q15 results outperformed on lower-than-expected costs. Declares 10sen 2nd interim DPS (ex-date: 1 Dec 2015). §  Raise 2015-17 net profit forecasts by 10%-33%. §  Reiterate BUY at a higher MYR6.90 TP (+24%). MY: WCT Holdings (WCTHG MK) Share Price: MYR1.38 Target Price: MYR2.20 Recommendation: Buy Li Shin Chai (603) 2297 8684 lishin.c@maybank-ib.com Company Update: Job wins at 10-year peak FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 1,655.0 1,662.2 1,800.1 1,992.0 EBITDA 282.4 147.5 183.5 229.9 Core net profit 200.5 97.0 90.7 137.9 Core EPS (sen) 18.7 8.9 8.3 12.6 Core EPS growth (%) 11.1 (52.4) (6.6) 51.9 Net DPS (sen) 6.8 6.2 6.2 6.2 Core P/E (x) 7.4 15.5 16.6 10.9 P/BV (x) 0.7 0.7 0.7 0.6 Net dividend yield (%) 4.9 4.5 4.5 4.5 ROAE (%) 10.0 4.4 4.1 6.0 ROAA (%) 3.7 1.7 1.5 2.2 EV/EBITDA (x) 10.7 21.6 16.5 13.0 Net debt/equity (%) 40.1 66.4 64.9 61.4 §  New MYR283m subcontract works for West Coast Expressway increased external orderbook by 7% to MYR4.3b. §  More job wins from TRX, Pan Borneo, RAPID in 2016. §  Further sizeable job wins, reduced gearing concerns to re-rate this undervalued stock. BUY, MYR2.20 RNAV TP. MY: IOI Corporation (IOI MK) Share Price: MYR4.17 Target Price: MYR3.97 Recommendation: Hold Chee Ting Ong (603) 2297 8678 ct.ong@maybank-ib.com Results Review: Massive forex losses hurt 1Q FYE Jun (MYR m) FY14A FY15A FY16E FY17E Revenue 12,664.1 11,621.0 11,577.3 12,211.1 EBITDA 2,376.3 847.4 1,579.3 1,762.0 Core net profit 1,549.4 860.1 927.6 1,069.3 Core FDEPS (sen) 24.0 13.3 14.4 16.6 Core FDEPS growth(%) (6.9) (44.6) 7.8 15.3 Net DPS (sen) 20.0 9.0 7.2 8.3 Core FD P/E (x) 17.4 31.3 29.0 25.2 P/BV (x) 4.5 5.3 4.9 4.4 Net dividend yield (%) 4.8 2.2 1.7 2.0 ROAE (%) 15.7 15.5 17.5 18.5 ROAA (%) 7.9 6.0 6.9 7.7 EV/EBITDA (x) 15.8 36.9 20.1 17.9 Net debt/equity (%) 58.6 96.1 82.5 70.9 §  Worst ever quarter hit by forex losses. Core results were below expectations too. §  Expect some selling pressure following the poor 1Q results given no forex losses reversal in sight yet. §  HOLD with an unchanged TP of MYR3.97 on 24x FY17 PER. MY: Eco World Development (ECW MK) Share Price: MYR1.36 Target Price: MYR1.69 Recommendation: Buy Wei Sum Wong (603) 2297 8679 weisum@maybank-ib.com Company Update: Stands out among the competition FYE Oct (MYR m) FY13A FY14A FY15E FY16E Revenue 156.3 148.4 1,354.3 2,196.2 EBITDA 48.3 42.3 215.6 351.9 Core net profit 24.3 7.2 39.3 76.4 Core EPS (sen) 9.6 2.8 1.9 3.6 Core EPS growth (%) 237.0 (70.4) (34.4) 94.7 Net DPS (sen) 0.6 0.0 0.0 0.4 Core P/E (x) 14.2 48.0 73.1 37.6 P/BV (x) 1.1 1.1 0.9 0.9 Net dividend yield (%) 0.5 0.0 0.0 0.3 ROAE (%) 7.9 2.2 2.3 2.4 ROAA (%) 5.0 1.2 1.3 1.3 EV/EBITDA (x) 5.2 15.8 20.6 14.3 Net debt/equity (%) 8.4 60.5 49.6 66.5 §  Decent take-up at Eco Sanctuary despite macro headwinds and stiff competition. §  Bucks the trend with creative products; MYR3b sales target for FY10/15 is attainable. §  Maintain earnings forecasts and MYR1.69 RNAV-TP; BUY. MY: Star Media Group Bhd (STAR MK) Share Price: MYR2.40 Target Price: MYR2.40 Recommendation: Hold Samuel Yin Shao Yang (603) 2297 8916 samuel.y@maybank-ib.com Jade Tam (603) 2297 8687 jade.tam@maybank-ib.com Results Review: 3Q15 dragged down by Cityneon FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 1,025.3 1,013.7 937.7 995.3 EBITDA 242.2 202.2 193.3 205.7 Core net profit 144.5 151.5 113.8 126.3 Core EPS (sen) 19.6 20.5 15.4 17.1 Core EPS growth (%) (1.5) 4.8 (24.9) 11.0 Net DPS (sen) 15.0 18.0 15.0 16.0 Core P/E (x) 12.3 11.7 15.6 14.0 P/BV (x) 1.5 1.6 1.5 1.5 Net dividend yield (%) 6.3 7.5 6.3 6.7 ROAE (%) 12.6 13.1 9.9 11.0 ROAA (%) 8.5 9.0 7.0 8.1 EV/EBITDA (x) 5.8 6.9 7.4 6.8 Net debt/equity (%) net cash net cash net cash net cash §  3Q15 results were within expectations, but would have been better but for cost overruns at Cityneon. §  We raise FY16/FY17 earnings 6-7% for the recent Victory Hill Exhibition acquisition. §  We also raise our SOP-based TP 4% to MYR2.40. Maintain HOLD call. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index lower despite global volatility §  KIANJOO - On a very strong upward Wave 3 and 5 move. §  FBMKLCI – Index closed slightly lower despite global volatility. §  Supports of 1,630 and 1,654 may be weaker. §  Resistances of 1,656 and 1,685 will cap any rebound.