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Share
Price:
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MYR2.75
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Target
Price:
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MYR4.35
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Recommendation:
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Buy
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FY16 in line;
FPSO Genesis to drive growth
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FY1/16 core net profit (+21% YoY) yielded no surprises,
with the O&G business contributing 98% of the core profit.
Meanwhile, the projected 15sen special DPS payment, post the divestment
of non O&G operations by 2HCY16, is a short-term catalyst. Overall,
we remain positive over Yinson’s long-term prospects, for its strong
earnings growth and steady cash flow profile. Our MYR4.35 SOP-based TP
offers a 58% upside. BUY.
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FYE Jan (MYR m)
|
FY15A
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FY16A
|
FY17E
|
FY18E
|
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Revenue
|
1,083.4
|
986.0
|
996.0
|
1,286.2
|
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EBITDA
|
225.4
|
261.0
|
288.5
|
417.8
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Core net profit
|
142.6
|
173.1
|
184.2
|
220.0
|
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Core EPS (sen)
|
13.8
|
16.2
|
17.3
|
20.6
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Core EPS growth (%)
|
114.7
|
17.5
|
6.4
|
19.4
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Net DPS (sen)
|
2.0
|
1.9
|
2.0
|
2.4
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Core P/E (x)
|
19.9
|
17.0
|
15.9
|
13.3
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P/BV (x)
|
2.0
|
1.3
|
1.2
|
1.1
|
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Net dividend yield (%)
|
0.7
|
0.7
|
0.7
|
0.9
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ROAE (%)
|
13.9
|
9.4
|
7.9
|
8.7
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ROAA (%)
|
6.1
|
4.8
|
3.5
|
3.5
|
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EV/EBITDA (x)
|
15.1
|
15.6
|
14.8
|
10.3
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Net debt/equity (%)
|
31.6
|
51.9
|
55.2
|
51.3
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Share
Price:
|
MYR4.12
|
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Target
Price:
|
MYR4.30
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Recommendation:
|
Hold
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Still bucking
the trend
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Container volumes in Jan-Feb 2016 bucked the trend with
growth of estd. 8% YoY on organic growth and some ad-hoc moves. We
continue to think that the volume could slow ahead on softer global
trade. We maintain our earnings forecasts, projecting EPS growth of 18%
in FY16 on throughput growth of 3% and a lower tax rate. Trading at
2016 PER of 23.6x, we think its share price already reflects its solid
fundamentals. Maintain HOLD and DCF-derived TP of MYR4.30 (WACC: 6.7%,
beta: 0.6).
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
|
FY17E
|
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Revenue
|
1,503.0
|
1,578.3
|
1,693.4
|
1,770.3
|
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EBITDA
|
800.8
|
869.1
|
940.1
|
1,017.1
|
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Core net profit
|
512.2
|
504.9
|
596.4
|
628.2
|
|
Core EPS (sen)
|
15.0
|
14.8
|
17.5
|
18.4
|
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Core EPS growth (%)
|
17.7
|
(1.4)
|
18.1
|
5.3
|
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Net DPS (sen)
|
11.3
|
11.1
|
13.1
|
13.8
|
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Core P/E (x)
|
27.4
|
27.8
|
23.6
|
22.4
|
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P/BV (x)
|
8.0
|
7.4
|
6.9
|
6.4
|
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Net dividend yield (%)
|
2.7
|
2.7
|
3.2
|
3.4
|
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ROAE (%)
|
30.4
|
27.6
|
30.2
|
29.6
|
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ROAA (%)
|
13.8
|
12.8
|
14.3
|
14.4
|
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EV/EBITDA (x)
|
15.2
|
17.0
|
16.2
|
15.0
|
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Net debt/equity (%)
|
40.0
|
39.7
|
59.9
|
53.0
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NEWS
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Outside Malaysia:
Brazil: Budget deficit swells to record as economy
shrinks. Brazil recorded the largest-ever primary budget gap in 12 months
through February as a two-year economic recession sapped tax collection
while expenses grew further. The deficit before interest payments, which
includes results of states, municipalities and government-owned
companies, reached BRL 125.14b (USD 5b) in the 12- month period, or a
record 2.11% of gross domestic product, the central bank said. The result
shows a growing mismatch between government revenue and expense over the
past year, said Tulio Maciel, head of the central bank’s economic
research department. “While revenues are falling sharply due to the
economic situation, at a rate of 12% to 13% (a year), expenses continue
to grow,” he told reporters in Brasilia. (Source: Bloomberg)
E.U: Euro-area economic confidence fell to the lowest
level in more than a year just as the European Central Bank deployed
fresh stimulus to spur growth and quash the threat of deflation. An index
of executive and consumer confidence slumped for a third month, declining
to 103.0 in March from a revised 103.9 the previous month, the European
Commission in Brussels said. (Source: Bloomberg)
Germany: Inflation unexpectedly climbed above zero in
March in a sign that domestic demand and European Central Bank stimulus
may be starting to spur price gains. Consumer prices rose O.1% YoY, data
from the Federal Statistics Office showed, based on a European
Union-harmonized calculation. Prices rose 0.8% MoM from the previous
month. (Source: Bloomberg)
U.K: Consumer confidence stalls as ‘Brexit’ clouds
outlook. Fears that Britain might vote to leave the European Union helped
keep consumer confidence at the lowest level in more than a year,
according to a survey published. GfK’s consumer-confidence index stayed
at zero in March. A gauge of expectations for the economic situation over
the next 12 months was minus 12, unchanged on the month and down 18
points from a year earlier. “Despite good economic headlines about low inflation,
interest rates and prices in the shops, concerns about Brexit and the
ongoing euro-zone crisis appear to be hitting home,” said Joe Staton,
head of market dynamics at GfK. (Source: Bloomberg)
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Other News:
Construction: AlloyMTD withdraws bid for USD2.65b project
in Manila. Malaysian infrastructure conglomerate AlloyMTD Group, a merger
between MTD Capital and Alloy Consolidated Sdn Bhd, has pulled out of
bidding for a USD2.65b (MYR10.41b) contract to build a 47km expresssway,
flood control dike, and for 700ha land reclamation works near Taguig in
Manila, the Philippines. The group cited unresolved issues affecting the
propriety and validity of the procurement process for the Laguna
Lakeshore Expressway Dike project for the withdrawal. The bidding process
has become risky for the group as the only foreign bidder due to legal
questions over the government’s right to turn a portion of a lake into a
land, which would then be sold to private sector. (Source: The Edge
Financial Daily)
Lay Hong: Partners NH Foods to expand meat-based business
abroad. Integrated poultry company Lay Hong plans to set up a plant in
Selangor and will have its first Nippon Nutriplus product in Malaysia by
mid-year, following its joint venture (JV) with NH Foods Limited. Under
the JV agreement, a private limited company named NHF Manufacturing
(Malaysia) Sdn Bhd will be established with an initial authorised share
capital of MYR30m divided into 30 million shares. NH Foods and Lay Hong
will hold 51% and 49% stake respectively. Lay Hong expects to fund its
portion for the JV company via internally-generated funds, bank
borrowings and/or additional funds to be raised from the capital market.
(Source: The Sun Daily)
Perdana Petroleum: Cancels work barge acquisition. Perdana
Petroleum has canceled the acquisition of an accommodation work barge
identified as Vessel Hull No. SK 316 from Nam Cheong International Ltd.
The termination of the memorandum of agreement (MOA) with Nam Cheong was
necessary as to date, no potential charter contract has been identified
for the vessel SK316. The group has written-off MYR36.1m being the 20%
deposit for the vessel SK316 in the financial statement for the year
ended Dec 31, 2015. It does not foresee any financial impact in 2016.
(Source: The Sun Daily)
Dialog: To build industrial estate in Pengerang. Dialog
Group, which has a 46% effective interest in the MYR5b Pengerang
Independent Deepwater Petroleum Terminal, plans to develop an industrial
estate within its deepwater terminal land. It had incorporated a wholly
owned subsidiary, Sungai Rengit Industrial Estate Sdn Bhd, to develop the
industrial estate that would support the development of the petroleum and
petrochemical industry in Pengerang, Johor. The terminal project would
help attract MYR80b to MYR90b in investments to the area as it expanded
over the years. (Source: The Star)
Digi: To partner edotco for telecom infrastructure ops.
DiGi.Com has appointed edotco Malaysia as its preferred partner in the
telecommunications infrastructure services business. With this agreement
being signed, edotco would deliver both co-location and build-to-suit
sites over five years, giving Digi the advantage of further strengthening
its network footprint and service quality nationwide. This agreement will
pave the way for Digi to access edotco’s telecoms infrastructure
footprint of over 3,600 sites nationwide and new built-to-suit sites.
Both companies have been in network collaborations since 2013. (Source:
The Star)
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