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Share
Price:
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MYR3.00
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Target
Price:
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MYR2.80
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Recommendation:
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Hold
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Stable but still
not cheap
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FY1/16 core net profit and dividends were within
expectations. While we opine that it is admirable that ASTRO managed to
grow its subscriber base in this weak consumer climate, it continues to
strike a cautious tone on its outlook. Furthermore, it has already
hedged its content cost at forex rates above MYR4:USD1 which will limit
content cost savings when the MYR recovers. Maintain HOLD and MYR2.80
DCF-based TP.
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FYE Jan (MYR m)
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FY15A
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FY16A
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FY17E
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FY18E
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Revenue
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5,231.4
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5,475.4
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5,499.1
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5,734.5
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EBITDA
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1,808.3
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1,940.6
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1,803.0
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1,977.5
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Core net profit
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519.4
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672.5
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592.6
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776.1
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Core FDEPS (sen)
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10.0
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12.9
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11.4
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14.9
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Core FDEPS growth(%)
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15.9
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29.4
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(11.9)
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31.0
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Net DPS (sen)
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11.0
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12.0
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9.0
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12.0
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Core FD P/E (x)
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30.1
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23.3
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26.4
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20.2
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P/BV (x)
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22.5
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26.0
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21.6
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17.9
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Net dividend yield (%)
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3.7
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4.0
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3.0
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4.0
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ROAE (%)
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79.5
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103.9
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89.5
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97.1
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ROAA (%)
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7.5
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9.9
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8.1
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10.1
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EV/EBITDA (x)
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9.6
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9.1
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11.0
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9.9
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Net debt/equity (%)
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309.9
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nm
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nm
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446.2
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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External reserves increased USD0.5b to USD96.1b
(MYR412.3b) at 15 Mar 2016 from USD95.6b (MYR410.5b) at 29 Feb 2016
amid intensifying net foreign buying of Malaysian equities. The
latest count is equivalent to 8.4 months of retained imports and 1.2x
of short-term external debt.
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Suhaimi Ilias
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Zamros
Dzulkafli
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Technical Research
by Lee
Cheng Hooi
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Index is poised
to test 1,727
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The FBMKLCI gained 6.39 points to close at 1,724.75
yesterday, while the FBMEMAS and FBM100 gained 34.69 points and 37.90
points, respectively. In terms of market breadth, the gainer-to-loser
ratio was 403-to-466, while 353 counters were unchanged. A total of
2.42b shares were traded valued at MYR2.88b.
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NEWS
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Outside Malaysia:
U.S: House prices climbed 0.5% MoM in January as inventory
tight. Prices climbed 6% YoY. The low number of homes on the market is
holding back home sales and driving up prices. Closings on purchases of
existing homes decreased 7.1% to a 5.08 million annual rate in February,
a three-month low, after a 5.47 million pace in January, the National
Association of Realtors reported. (Source: Bloomberg)
E.U: Deflation risks persist even as Markit sees growth.
Economic growth in the euro area probably picked up at the end of the
first quarter, according to Markit Economics, which also said that
concerns remain about the health of the region. Markit’s composite
Purchasing Managers Index of manufacturing and services rose to a
three-month high of 53.7 in March from 53 in February. That keeps the
measure well above the 50 level that separates expansion from
contraction. (Source: Bloomberg)
Germany: Investor confidence rebounded from a 16-month low
after market turmoil calmed and the European Central Bank announced fresh
euro-area stimulus. The ZEW Center for European Economic Research in
Mannheim said its index of investor and analyst expectations, which aims
to predict economic developments six months ahead, advanced to 4.3 in
March from 1 in the previous month. (Source: Bloomberg)
U.K: Inflation rate was unexpectedly unchanged in
February, remaining far below the Bank of England’s 2% goal. Annual
consumer-price growth was at 0.3%, the Office for National Statistics
said. Inflation, which excludes volatile food and energy prices, held at
1.2%. Inflation has been below the BOE’s target for more than two years,
largely due to lower oil prices. With Governor Mark Carney warning about
international risks to the U.K. economy, weak price growth is giving him
leeway to keep interest rates at a record low. (Source: Bloomberg)
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Other News:
Top Glove: Moves into healthcare business. Top Glove Corp,
the world’s largest rubber glove manufacturer, is making a foray into the
healthcare business via a joint venture (JV) with DHS Emergency Asia Sdn
Bhd. The JV, when it is up and running, will have a total paid-up capital
of MYR2m. Top Glove will provide 75% of the capital, while the rest will
come from DHS. The JV is a long-term investment plan for the group and
would also provide medical facilities to serve the large number of the
group’s employees and the surrounding community. Its wholly owned
subsidiary – Top Glove Sdn Bhd (TGSB) – had entered into a JV agreement
with DHS to establish TG GD Medical Clinic Sdn Bhd. (Source: The Star)
CCM: Plans new plant and warehouse. Duopharma Biotech
(CCMD), a maker of medicine and pharmaceutical products, is planning to
build new manufacturing and warehousing facilities in Klang, Selangor,
for a total cost of MYR140.8m. The construction of the new facility was
necessary to keep up with the growing current operations and help expand
the current portfolio into specialty products. The completion of the
proposed state-of-the-art plant will cater for the future expansion plans
of CCMD, including expanding its production capacity by 40% to 50%.
MYR103.7m would be allocated for the new plant – including machinery –
and MYR37.1m for the new warehouse with roof-top car park. (Source: The
Star)
Sentoria: Clinches construction contracts worth MYR110m.
Property developer cum resort operator Sentoria Group bagged two development
projects in Kuantan and Sepang that are collectively worth some MYR110m.
Its wholly-owned subsiiart Sentoria Bina Sdn Bhd (SBSB) had accepted the
letter of award (LoA) from HA Properties Sdn Bhd yesterday. The LoA is
for a contract for the design and build, including sales and marketing of
a proposed development of 30.35ha of government land situated in Kuala
Kuantan, Pahang. The project is expected to commence on March 21 this
year and to be completed by March 31, 2020. (Source: The Edge Financial Daily)
IOI Corp: Could face downside risk if RSPO cert suspended.
Roundable for Sustainable Palm Oil (RSPO) complaint’s panel is reported
to have recommended the suspension to its board of governors following
IOI Corp’s alleged non-compliance with some of RSPO’s rules on possessing
environmental permits and clearing of fragile land in Indonesia. The RSPO
board is expected to make a decision in the next few weeks and if
certification is suspended, the company will be unable to claim that its
products are certified as sustainable. (Source: The Edge Financial Daily)
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