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Share
Price:
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MYR1.12
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Target
Price:
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MYR1.10
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Recommendation:
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Hold
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En-bloc sale in
Melbourne
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We are positive on the latest en-bloc sale within the
Aurora Melbourne Central project. The enbloc sale will help to reduce
overall sales risk of the project and free up UEMS’ resources for its
other projects in Melbourne. With the enbloc sale, UEMS is now on track
to meet its sales target for FY15. We maintain our earnings forecasts
and MYR1.10 RNAV-TP (on an unchanged 0.39x P/RNAV peg). Maintain HOLD.
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FYE Dec (MYR m)
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FY13A
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FY14A
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FY15E
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FY16E
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Revenue
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2,425.3
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2,661.7
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1,854.3
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2,787.1
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EBITDA
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594.6
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527.1
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417.9
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714.1
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Core net profit
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579.1
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479.9
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247.6
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485.4
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Core EPS (sen)
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13.3
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10.6
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5.5
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10.7
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Core EPS growth (%)
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28.7
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(20.7)
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(48.4)
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96.0
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Net DPS (sen)
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4.0
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3.0
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1.7
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3.4
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Core P/E (x)
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8.4
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10.6
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20.5
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10.5
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P/BV (x)
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0.8
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0.8
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0.8
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0.7
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Net dividend yield (%)
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3.6
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2.7
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1.6
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3.1
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ROAE (%)
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10.2
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7.8
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3.9
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7.3
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ROAA (%)
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6.1
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4.6
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2.2
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4.1
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EV/EBITDA (x)
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19.0
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16.1
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19.2
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10.7
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Net debt/equity (%)
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9.6
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25.6
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37.8
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29.9
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SECTOR RESEARCH
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Sector Note
by
Mohshin Aziz
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MAS ties up with
Emirates | NEUTRAL
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MAS code shares with Emirates on 90 routes, drops
long-haul flights on the affected destinations except London. Clear
delineation of markets in Malaysia, less overlap. Minor positive for
AirAsia, neutral for AirAsia X and negative to MAHB on loss of traffic.
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Sector Note
by Chee
Ting Ong
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Largely Neutral
TPPA impact | NEUTRAL
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According to PwC’s cost-benefit analysis studies, the
TPPA is expected to have a largely neutral impact on the sector. This
is broadly in line with our assessment published on 9 Nov. TPPA opens
market access to America but logistics costs may keep demand in
check. Freedom of association for all workers may disrupt revenue
generation and increase labour costs. Stay NEUTRAL.
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MACRO RESEARCH
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Technical Research
by Lee
Cheng Hooi
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Range bound
ahead of the weekend
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The FBMKLCI lost 2.85 points to 1,673.92 yesterday,
while the FBMEMAS and FBM100 fell 28.70 points and 28.03 points,
respectively. In terms of market breadth, the gainer-to-loser ratio
was 307-to-524, while 354 counters were unchanged. A total of 2.04b shares
were traded valued at MYR1.84b.
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NEWS
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Outside Malaysia:
U.S: Service industries grew at slower pace in November
indicating malaise in manufacturing is impeding progress in other parts
of the economy. The Institute for Supply Management’s non-manufacturing
index declined to 55.9 from October’s 59.1, the biggest monthly decrease
in seven years, the Tempe, Arizona-based group said. A gauge above 50
denotes expansion. (Source: Bloomberg)
U.S: Yellen signals economy nearly ready for first
interest-rate hike. Federal Reserve Chair Janet Yellen delivered a
cautiously upbeat outlook for the U.S. economy, signaling the conditions
necessary for an interest-rate increase have been met and that she hopes
to tighten monetary policy slowly after liftoff. “I currently judge that
U.S. economic growth is likely to be sufficient over the next year or two
to result in further improvement in the labor market,” Yellen said,
according to the text of testimony before Congress’s Joint Economic
Committee. “Ongoing gains in the labor market, coupled with my judgment
that longer-term inflation expectations remain reasonably well anchored,
serve to bolster my confidence in a return of inflation to 2%.” (Source:
Bloomberg)
E.U: Draghi braves QE hype with boost that leaves ECB room
to do more. The European Central Bank unveiled a package of measures to
tackle too-low inflation, from a cut in the floor for interest rates to
an expansion of its bond-buying program by at least EUR 360b (USD 390b).
Investors were unimpressed. The Frankfurt-based ECB will extend
quantitative easing by six months until at least March 2017 at the
current rate of EUR 60b a month, and broaden the assets purchased to
include local and regional debt, ECB President Mario Draghi said. The
Governing Council earlier reduced its deposit rate by 10 basis points to
minus 0.3%. (Source: Bloomberg)
France: Unemployment rose to near a record high in the
third quarter, the latest sign that President Francois Hollande is
struggling to meet a pledge to create jobs. Unemployment climbed to 10.6%
in the three months through September from 10.4% the previous quarter,
national statistics office Insee said. While jobless claims have been
steadily climbing for the past four years to reach a record 3.6 million
in October, Hollande has been able to point to France’s growing
population as part of the reason. The unemployment rate, by contrast, has
stayed below the all-time high reached in 1997. (Source: Bloomberg)
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Malaysia:
Fajarbaru Builder: Eyes Gemas-JB rail project. It is
bidding for the MYR7.1b Gemas-Johor Baru electrified double-track train
(EDTT) project and it expects to get the tender results by the end of
this month. Fajarbaru is positive on getting the jobs, based on their
track record and experience. (Source: The Sun)
MRCB: To inject Menara Shell into MQREIT for MYR640m. Its
wholly-owned subsidiary 348 Sentral Sdn Bhd had entered into a heads of
agreement with Maybank Trustees Bhd, the trustee for MRCB-Quill REIT (MQREIT),
for the disposal of the office tower that is located next to Kuala Lumpur
Sentral. The purchase is expected to be funded by MQREIT via a
combination of cash and issuance of new units. (Source: The Edge)
Tekala Corp: Directors proposes MYR513m asset injection
plan. The directors of Tekala Corp are proposing to inject their own
property and construction assets in a share swap deal to revive the loss
making timber company. Under the proposed deal, a special purpose vehicle
will be set up to acquire the targeted assets and it will then inject its
assets into Tekala via a share swap deal. (Source: The Star)
MAHB: Eyes growth; glut to persist among budget airlines.
MAHB expects the return of several international airlines to Kuala Lumpur
International Airport (KLIA) and the government’s initiatives to promote
the travel industry to be key growth catalyst for next year. The
initiatives include online visa application for certain countries by
mid-2016, and the allocation of MYR1.2b to the tourism and culture
ministry to spur tourist arrivals next year. (Source: The Edge)
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