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Share
Price:
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MYR3.89
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Target
Price:
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MYR3.90
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Recommendation:
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Hold
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Below
expectation; D/G to HOLD
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1Q16 net profit of MYR4m disappointed as operating margin
collapsed on weaker revenue, exacerbated by forex translation losses.
We cut FY16-18 earnings forecasts by 36%-52% on lower sensor demand and
lower USD/MYR assumption. Pegging at a lower PER multiple of 15x (from
16x; on FY17 EPS) to account for the less sanguine near-term outlook,
our revised TP is MYR3.90 (-43%), warranting a downgrade in call to
HOLD.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
|
355.0
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343.7
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283.6
|
362.6
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EBITDA
|
108.6
|
96.3
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70.2
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97.1
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Core net profit
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64.4
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71.3
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45.1
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73.3
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Core FDEPS (sen)
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22.9
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25.3
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15.9
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25.9
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Core FDEPS growth(%)
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20.5
|
10.4
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(37.0)
|
62.4
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Net DPS (sen)
|
23.0
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20.0
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12.8
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20.8
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Core FD P/E (x)
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17.0
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15.4
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24.4
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15.0
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P/BV (x)
|
3.8
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3.7
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3.6
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3.4
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Net dividend yield (%)
|
5.9
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5.1
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3.3
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5.3
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ROAE (%)
|
23.0
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24.4
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14.8
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23.2
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ROAA (%)
|
18.5
|
19.9
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12.4
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19.5
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EV/EBITDA (x)
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9.7
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17.3
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12.8
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9.2
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Net debt/equity (%)
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net cash
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net cash
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net cash
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net cash
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Share
Price:
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MYR75.00
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Target
Price:
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MYR73.00
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Recommendation:
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Hold
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1Q16: Within
expectations
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Looking forward, domestic operations could improve further
towards year end, taking cue from the recent uptick in consumer
sentiment. As for exports, it should continue to see positive revenue
momentum on export potential from coffee, confectionary, RTD, and
noodle products. There is no change to our earnings forecasts, still
expecting mid-single digit core earnings growth over the near-medium
term.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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4,808.9
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4,838.0
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5,152.4
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5,554.3
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EBITDA
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837.2
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886.0
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964.4
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1,027.6
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Core net profit
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550.4
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590.7
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615.1
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649.5
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Core EPS (sen)
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234.7
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251.9
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262.3
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277.0
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Core EPS growth (%)
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(2.0)
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7.3
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4.1
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5.6
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Net DPS (sen)
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235.0
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260.0
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259.7
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274.2
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Core P/E (x)
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32.0
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29.8
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28.6
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27.1
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P/BV (x)
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22.6
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24.8
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24.6
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24.4
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Net dividend yield (%)
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3.1
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3.5
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3.5
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3.7
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ROAE (%)
|
69.1
|
79.5
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86.4
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90.5
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ROAA (%)
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25.1
|
24.7
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23.9
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24.0
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EV/EBITDA (x)
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19.4
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19.8
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18.6
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17.4
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Net debt/equity (%)
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20.4
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47.4
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42.8
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36.1
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Share
Price:
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MYR54.50
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Target
Price:
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MYR50.00
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Recommendation:
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Hold
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1Q16:Below
expectations
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1Q16 results disappointed on higher-than-expected volume
contraction in the domestic market post the excise tax hike (~40%) in
November 2015. Outlook remains challenging on persistent regulatory
risks and down trading pressure in this weaker environment. HOLD
maintained with a lower DCF-TP of MYR50 (MYR55 previously).
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
|
4,796.0
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4,581.5
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4,155.8
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3,858.0
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EBITDA
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1,277.0
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1,277.3
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1,090.0
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1,084.3
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Core net profit
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910.0
|
914.5
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775.4
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777.2
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Core EPS (sen)
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318.7
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320.3
|
271.6
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272.2
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Core EPS growth (%)
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10.5
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0.5
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(15.2)
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0.2
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Net DPS (sen)
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309.0
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312.0
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244.4
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258.6
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Core P/E (x)
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17.1
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17.0
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20.1
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20.0
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P/BV (x)
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29.7
|
28.5
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24.9
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23.5
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Net dividend yield (%)
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5.7
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5.7
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4.5
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4.7
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ROAE (%)
|
176.3
|
170.8
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132.5
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120.8
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ROAA (%)
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nm
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nm
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nm
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nm
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EV/EBITDA (x)
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14.8
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12.8
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14.4
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14.4
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Net debt/equity (%)
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65.9
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50.5
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25.7
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13.5
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Share
Price:
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MYR1.50
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Target
Price:
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MYR1.55
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Recommendation:
|
Hold
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Narrowing
upside; D/G to HOLD
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1Q16 earnings came in within expectations. Earnings growth
was largely supported by sustained occupancy rates and positive rental
reversions. We maintain our earnings forecasts and DCF-based TP of
MYR1.55 (WACC: 7.6%, terminal yield 7.0%). However, the REIT is now a
HOLD on narrowed upside (total returns <10%), following strong unit
price rise of +15% YTD.
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FYE Dec (MYR m)
|
FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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461.8
|
489.2
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507.3
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524.9
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Net property income
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312.6
|
342.8
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353.3
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365.9
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Distributable income
|
268.8
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291.0
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309.0
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320.5
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DPU (sen)
|
7.0
|
7.4
|
8.0
|
8.2
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DPU growth (%)
|
10.7
|
5.1
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8.3
|
3.0
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Price/DPU(x)
|
21.4
|
20.4
|
18.8
|
18.2
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P/BV (x)
|
1.4
|
1.4
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1.4
|
1.4
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DPU yield (%)
|
4.7
|
4.9
|
5.3
|
5.5
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ROAE (%)
|
6.4
|
6.9
|
7.3
|
7.6
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ROAA (%)
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4.6
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4.9
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5.2
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5.4
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Debt/Assets (x)
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0.2
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0.2
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0.2
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0.2
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Malaysia’s National Transformation Programme (NTP) is
on track since its implementation in 2010. Up to 2015, GNI per capita
grew 4.7% p.a., 23.3m people have benefited, and critical fiscal
reforms were implemented. Key challenges now are undertaking broader
economic reforms as per the TPP Agreement and managing perception.
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Suhaimi Ilias
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Zamros
Dzulkafli
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Economics Research
by
Suhaimi Ilias
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Industrial Production (IP) reported a slower decline
of –0.5% YoY in Mar 2016 (Feb 2016: -3.8% YoY) as improved output in
biomedical and electronics softened the steep fall in transport
engineering.
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Suhaimi Ilias
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Zamros
Dzulkafli
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NEWS
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Outside Malaysia:
U.S: Home prices in 20 cities increased less than forecast
in February. The S&P/Case-Shiller index of property values in 20
cities increased 5.4% YoY, the smallest gain since October, after
climbing 5.7% YoY in the year ended in January, a report from the group
showed. Nationally, prices rose 5.3% YoY. (Source: Bloomberg)
U.S: Consumer confidence fell more than forecast in April
as Americans’ optimism about the outlook for the economy and employment
waned. The Conference Board’s sentiment index fell to 94.2 this month
from a revised 96.1 reading in March, the New York-based private research
group said. A measure of consumers’ expectations decreased to a more than
two-year low. Sentiment has remained subdued as Americans digest
election-year uncertainty and financial markets that are shaking off
early-year turbulence caused by concerns about the global economy.
Stronger U.S. labor-market prospects, including emerging signs of a
pickup in wage growth, should help keep confidence from faltering.
(Source: Bloomberg)
U.S: Orders for durable goods rose less than forecast in
March as demand for capital equipment remained weak, a sign that a
diminished growth outlook is impeding investment. Bookings for items
meant to last at least three years rose 0.8% after a revised 3.1% slump a
month earlier, data from the Commerce Department showed. Orders for
business equipment were little changed last month, also weaker than
projected. (Source: Bloomberg)
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Other News:
Petronas Gas: MYR4.5b capex for next 5 years. The two
major growth projects that it is involved in are the LNG Regasification
Terminal (RGT) and the Air Separation Unit (ASU) project, both of which
are located in Pengerang. The RGT project is now at 25% progress on
ground and the first storage tank should be commissioned before the end
of 2017 while the second tank, which will complete the whole project,
will be commissioned by the first quarter of 2018. The group also aims to
enter into its final investment decision for the ASU project by the
second quarter of this year. The ASU is being built to cater for the
requirements of the Petronas Refinery and Petrochemical Integrated
Development (Rapid) project. (Source: The Sun Daily)
Tenaga Nasional: In MYR2.3b worth of coal shipment deals.
Tenaga Nasional (TNB) has signed five long-term contracts of
affreightment (COA) valued about MYR2.3b for the shipment of coal from
Indonesia. Its wholly owned unit, TNB Fuel Services Sdn Bhd (TNBF),
entered into the contracts that will bring in 7.5 million tonnes of coal
a year (Mtpa). As the long-term COA commence, the total allocated 7.5
Mtpa is actually less than 30% of the total shipping services required by
TNBF in 2016, that is, 27 Mtpa. By 2019 when the coal requirement is
anticipated to be around 40 Mtpa, the long-term COA will contribute about
18.75% of the total shipping services. (Source: The Sun Daily)
Axiata: Celcom to allocate about MYR2b in capex for 4G LTE
development. The network would be developed through its collaboration
with Ericsson Malaysia Sdn Bhd and Huawei Technologies (M) Sdn Bhd as its
main network infrastructure partners. Both partners would be responsible
for the full turnkey supply and delivery of product, equipment, system,
works and services for Celcom Radio Access Network. (Source: The Star)
Maybulk: To transport coal for TNB for MYR563m. Malaysian
Bulk Carriers Bhd (Maybulk) has clinched a 15-year contract estimated to
be worth MYR563m to transport coal for Tenaga Nasional Bhd unit TNB Fuel
Services Sdn Bhd. The affreightment contract would involve shipping about
1.50 million metric tonnes of steam coal per year to Malaysia. The
contract, from Sept 1, 2016, to Aug 31, 2031, is on a consecutive voyage
charter contract basis. (Source: The Star)
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