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Share
Price:
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MYR1.28
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Target
Price:
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MYR1.52
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Recommendation:
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Buy
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Proposes private
placement
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We are not surprised by the proposed private placement
given ECW’s aggressive landbanking over the last two years and
intention to subscribe up to a 30% stake in the upcoming listing of an
international business unit. The undertaking by major shareholders removes
any overhang. We lower our FY16-18 EPS forecasts by -11% to -20% and
RNAV by 9%. Our new RNAV-TP is MYR1.52 based on a 40% discount to RNAV.
Maintain BUY.
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FYE Oct (MYR m)
|
FY14A
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FY15A
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FY16E
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FY17E
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Revenue
|
148.4
|
1,712.1
|
3,582.7
|
4,700.4
|
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EBITDA
|
42.3
|
411.9
|
562.9
|
751.3
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Core net profit
|
7.2
|
44.0
|
98.1
|
207.0
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Core FDEPS (sen)
|
2.8
|
2.6
|
3.3
|
7.0
|
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Core FDEPS growth(%)
|
(70.4)
|
(6.9)
|
25.8
|
110.9
|
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Net DPS (sen)
|
0.0
|
0.0
|
0.4
|
0.7
|
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Core FD P/E (x)
|
45.2
|
48.5
|
38.5
|
18.3
|
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P/BV (x)
|
1.0
|
1.0
|
0.8
|
0.9
|
|
Net dividend yield (%)
|
0.0
|
0.0
|
0.3
|
0.5
|
|
ROAE (%)
|
2.2
|
2.5
|
2.8
|
5.3
|
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ROAA (%)
|
1.2
|
1.2
|
1.1
|
1.8
|
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EV/EBITDA (x)
|
15.8
|
8.4
|
9.1
|
7.3
|
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Net debt/equity (%)
|
60.5
|
37.5
|
45.5
|
42.3
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Share
Price:
|
MYR1.68
|
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Target
Price:
|
MYR1.80
|
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Recommendation:
|
Buy
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1Q16 earnings on
track
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1Q16 results were in line. Flattish earnings were the
product of improved rental income but higher interest cost. From 2Q16
onwards, we expect additional profit contribution from its two newly
acquired malls. Our earnings forecasts and DCF-based TP of MYR1.80
(WACC: 6.4%, terminal yield: 6.5%) are unchanged.
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FYE Dec (MYR m)
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FY14A
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FY15A
|
FY16E
|
FY17E
|
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Revenue
|
402.1
|
413.9
|
477.1
|
553.0
|
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Net property income
|
282.7
|
291.5
|
332.9
|
382.9
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Distributable income
|
239.9
|
248.9
|
263.5
|
280.9
|
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DPU (sen)
|
7.2
|
7.4
|
7.9
|
8.4
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DPU growth (%)
|
8.1
|
3.1
|
6.5
|
6.6
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Price/DPU(x)
|
23.5
|
22.8
|
21.4
|
20.1
|
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P/BV (x)
|
1.3
|
1.3
|
1.1
|
1.1
|
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DPU yield (%)
|
4.3
|
4.4
|
4.7
|
5.0
|
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ROAE (%)
|
6.3
|
6.3
|
6.2
|
6.0
|
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ROAA (%)
|
5.2
|
5.1
|
4.8
|
4.2
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Debt/Assets (x)
|
0.2
|
0.2
|
0.2
|
0.3
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Share
Price:
|
MYR4.20
|
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Target
Price:
|
MYR4.30
|
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Recommendation:
|
Hold
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Lacks near-term
catalysts
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1Q16 core net profit of MYR151m (+25% YoY, +14% QoQ) was
within expectations, driven by robust volume growth. However, we think
earnings may soften ahead in the absence of an ad hoc activity in 1Q16
and higher costs. Meanwhile, impact of the potential shipping alliance
shake-outs may only gain clarity in 2017. Maintain HOLD and DCF-derived
TP of MYR3.80 (WACC: 7%, growth (2025-54): 2%).
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
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
|
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Core EPS (sen)
|
15.0
|
14.8
|
17.5
|
18.4
|
|
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)
|
28.0
|
28.4
|
24.0
|
22.8
|
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P/BV (x)
|
8.1
|
7.5
|
7.0
|
6.5
|
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Net dividend yield (%)
|
2.7
|
2.6
|
3.1
|
3.3
|
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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
|
16.5
|
15.2
|
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Net debt/equity (%)
|
40.0
|
39.7
|
59.9
|
53.0
|
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Share
Price:
|
MYR6.60
|
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Target
Price:
|
MYR7.10
|
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Recommendation:
|
Hold
|
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Things are
improving, slowly but surely
|
|
1Q16’s core net loss of MYR8.3m was relatively unchanged
YoY, but the headline EBITDA and cashflows showed solid YoY gains. Many
cost items have receded, partly due to the kitchen sinking in 4Q15 and
are exhibiting a positive trend. We raise our FY16-18 earnings
forecasts by +93%, +73% and +35% on revised revenue and cost
assumptions. MAHB is now a HOLD (from SELL) with a revised TP of
MYR7.10 (from MYR5.10) based on DCF (WACC: 9.6%, terminal growth: 2%).
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
3,343.7
|
3,871.0
|
4,278.0
|
4,612.3
|
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EBITDA
|
815.4
|
1,342.0
|
1,578.6
|
1,729.4
|
|
Core net profit
|
146.5
|
(118.0)
|
98.3
|
224.4
|
|
Core EPS (sen)
|
10.9
|
(7.4)
|
5.9
|
13.5
|
|
Core EPS growth (%)
|
(62.9)
|
nm
|
nm
|
128.3
|
|
Net DPS (sen)
|
10.4
|
0.9
|
3.4
|
8.3
|
|
Core P/E (x)
|
60.6
|
(89.0)
|
111.4
|
48.8
|
|
P/BV (x)
|
1.2
|
1.2
|
1.3
|
1.3
|
|
Net dividend yield (%)
|
1.6
|
0.1
|
0.5
|
1.3
|
|
ROAE (%)
|
2.2
|
(1.5)
|
1.1
|
2.6
|
|
ROAA (%)
|
0.9
|
(0.5)
|
0.5
|
1.1
|
|
EV/EBITDA (x)
|
15.8
|
10.1
|
9.7
|
8.5
|
|
Net debt/equity (%)
|
58.6
|
52.2
|
50.6
|
42.5
|
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|
MACRO RESEARCH
|
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|
Technical Research
by Lee
Cheng Hooi
|
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Waterfall
decline persists
|
|
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|
|
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|
The FBMKLCI tumbled 17.58 points to close at 1,674.76
yesterday, while the FBMEMAS and FBM100 plunged 96.63 and 96.14
points respectively. In terms of market breadth, the gainer-to-loser
ratio was 276-to-568, while 332 counters were unchanged. A total of 1.78b
shares were traded valued at MYR2.31b.
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NEWS
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Outside Malaysia:
U.S. Economy expands to 0.5% pace, weakest in two years as
American consumers reined in spending and companies tightened their belts
in response to weak global financial conditions and a plunge in oil
prices. Gross domestic product rose at a 0.5% annualized rate after a
1.4% fourth-quarter advance, Commerce Department data showed. Household
purchases, which account for almost 70 percent of the economy, rose at a
1.9% annual pace last quarter, compared with 2.4% in the final three
months of last year. (Source: Bloomberg)
E.U: Economic confidence in the euro area rose in April,
snapping three months of declines that had sent the index to the lowest
in more than a year. A gauge of executive and consumer confidence
increased to 103.9 from 103.0 in March, the European Commission said. The
pick up in the sentiment indicator follows weaker readings at the start
of the year, when China-led concerns about emerging market growth sent
ructions through global markets. (Source: Bloomberg)
Germany: Unemployment extended its decline, underscoring
the strength of the labor market as Europe’s largest economy seeks to
absorb a wave of refugees. The number of people out of work fell by a
seasonally adjusted 16,000 to 2.706 million in April, data from the
Federal Labor Agency showed. That’s the seventh consecutive drop. The
jobless rate stayed at 6.2%, the lowest level since German reunification.
The reading signals that German economic growth is strong enough to
prompt companies to tap into a pool of potential workers that is rising
after the country admitted more than 1 million migrants in 2015. (Source:
Bloomberg)
Japan: The BOJ held off on expanding monetary stimulus, as
Governor Haruhiko Kuroda and his colleagues opted to take more time to
assess the impact of negative interest rates. They left unchanged three
key easing tools -- the JPY 80t (USD 732b) target for expanding the
monetary base, mostly through government-bond purchases, the 0.1%
negative rate on a portion of the cash banks park at the BOJ, and a
program to buy riskier assets including stocks. Separately, they
postponed their time frame for reaching a 2% inflation target, to
sometime in fiscal 2017, for the fourth delay in about a year. “Kuroda
wanted to make it clear the BOJ won’t make monetary policy driven by market
demands. (Source: Bloomberg)
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Other News:
Petronas Chemicals: Not slowing down, allocating USD1b for
capex. A significant portion of the capex will be channelled towards its
investments in the refinery and petrochemical integrated development
(Rapid) project in Pengerang, Johor. The capex will be mainly used to
complete Samur (Sabah ammonia urea project) and the initial standing for
the investment in Rapid. (Source: The Edge Financial Daily)
Perdana Petroleum: Danajamin guarantees MYR635m worth of
Perdana’s sukuk. Danajamin Nasional, has guaranteed RM635mil worth of
sukuk for a 12-year RM650mil Sukuk Murabahah programme established by
Dayang Enterprise Holdings’ subsidiary Perdana Petroleum (PPB). Danajamin
had collaborated with United Overseas Bank (UOB Malaysia) for the
inaugural sukuk issuance that has a tenure of up to five years under the
programme. The said sukuk is rated AAA(fg) by RAM Rating Services and it
was successfully issued and fully-subscribed today. (Source: The Star)
Nestle: IOI not totally cut off as palm oil supplier.
Nestle (Malaysia) has not disengaged from IOI Corp on a total scale
following the suspension by the Roundtable on Sustainable Palm Oil (RSPO)
on IOI's certification, but has stopped sourcing from IOI's plantations
that are affected. Nestle has suspended the palm oil from the plantation
mentioned. (Source: The Sun Daily)
Muhibbah Engineering: Proposes to raise MYR111.93m via
private placement. The issue price will be announced later after all
relevant approvals for the proposed private placement have been received.
The total gross proceeds, it plans to use MYR75m to pare down the group’s
borrowings, which will result in interest cost savings of MYR3.68m.
Another MYR35.36m will be use for working capital and some MYR1m to be
used to defray listing expenses. (Source: The Edge Financial Daily)
Astro: Ventures into the Philippines via Globe Telecom
partnership. Astro has entered into a memorandum of understanding with
Globe Telecom to offer Filipino customers Tribe over-the-top video
services, which were recently launched in Indonesia with offerings
including live sports, Asian movies and TV series. (Source: The Edge
Financial Daily)
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