[Maybank Kim Eng] Today's Research - Malaysia

06 Nov 2015, Friday

g Company Research - Hartalega: Future growth priced-in | Yen Ling Lee - MRCB-Quill REIT: Missed estimates; D/G to HOLD | Kevin Wong g Macro Research - Malaysia: BNM Monetary Policy - Status Quo… | Suhaimi Ilias - Malaysia: Technicals - Index falls short of 1,700 | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: Hartalega (HART MK) Share Price: MYR5.22 Target Price: MYR4.80 Recommendation: Hold Yen Ling Lee (603) 2297 8691 lee.yl@maybank-ib.com Results Review: Future growth priced-in FYE Mar (MYR m) FY14A FY15A FY16E FY17E Revenue 1,107.2 1,146.0 1,493.7 1,806.6 EBITDA 353.6 321.6 417.7 500.3 Core net profit 233.2 209.7 278.7 324.9 Core FDEPS (sen) 15.7 13.4 16.8 19.6 Core FDEPS growth(%) (2.0) (15.1) 25.9 16.6 Net DPS (sen) 7.3 6.5 9.0 8.9 Core FD P/E (x) 33.2 39.1 31.1 26.6 P/BV (x) 8.2 6.4 5.8 5.2 Net dividend yield (%) 1.4 1.2 1.7 1.7 ROAE (%) 27.3 19.0 20.3 20.8 ROAA (%) 22.9 16.4 17.7 18.1 EV/EBITDA (x) 13.9 20.7 20.7 17.6 Net debt/equity (%) net cash net cash 5.4 13.0 §  Results in line; strong volume growth seen. §  Stronger earnings ahead on its ongoing capacity expansion. §  Raise TP to MYR4.80 (+12%) based on unchanged +1SD to mean PER of 25x (from 24x). Maintain HOLD. MY: MRCB-Quill REIT (MQREIT MK) Share Price: MYR1.15 Target Price: MYR1.15 Recommendation: Hold Kevin Wong (603) 2082 6824 kevin.wong@maybank-ib.com Wei Sum Wong (603) 2297 8679 weisum@maybank-ib.com Rating Change: Missed estimates; D/G to HOLD FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 68.9 70.2 113.9 124.4 Net property income 53.2 53.3 86.4 99.8 Distributable income 34.5 34.2 52.2 56.5 DPU (sen) 7.5 7.5 6.7 7.3 DPU growth (%) 0.0 0.0 (10.5) 8.2 Price/DPU(x) 15.2 15.2 17.0 15.7 P/BV (x) 0.8 0.8 0.8 0.8 DPU yield (%) 6.6 6.6 5.9 6.4 ROAE (%) 6.9 7.5 7.2 6.2 ROAA (%) 4.3 4.7 4.2 3.5 Debt/Assets (x) 0.4 0.4 0.4 0.4 §  3Q15 net profit of MYR16m below expectations. §  Lowering FY15-17 net profit forecasts by 3-10% after revising our property opex assumptions. §  Downgrade to HOLD as total return is <10%; trim DCF-based TP by 2sen to MYR1.15. MY: BNM Monetary Policy Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Status Quo… §  OPR stays at 3.25% for this year. §  No material change in MPC Statement. §  We expect the status quo OPR this year to continue in 2016. MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Index falls short of 1,700 §  OFI - On a very strong upward Wave 3 and 5 move. §  FBMKLCI – Profit taking below 1,700 trims index’s gains. §  Supports of 1,667 and 1,685 may be areas to buy. §  Resistances of 1,688 and 1,727 may cap its rebounds. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —  U.S: Productivity rises in 3Q 2015 as self-employed work fewer hours —  E.U: Cuts growth and inflation outlook as ECB decision looms —  U.K: House prices rose in October, according to Halifax —  Russia: Inflation slows further after halt in rate cuts Malaysia —  Health Care: Ramsay Sime Darby Health Care looks at China hospital ventures —  Kulim: Johor Corp proposes to take cash-rich Kulim private —  Tenaga Nasional: Eyes big role in solar market —  Handal Resources: In collaboration with US firm