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Share
Price:
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MYR1.61
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Target
Price:
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MYR1.80
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Recommendation:
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Buy
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A slow start
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| 1Q16 results were below expectations primarily on cost
escalations mainly relating to maintenance. Nevertheless, with
maintenance activities tapering off, and PD Power’s extended PPA
kicking in, Malakoff’s earnings outlook should improve in the coming quarters.
BUY rating retained with an unchanged TP of MYR1.80. |
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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
|
5,594.5
|
5,302.0
|
6,365.0
|
6,515.2
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EBITDA
|
2,407.1
|
2,468.8
|
2,972.8
|
2,896.6
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Core net profit
|
341.5
|
453.2
|
571.5
|
494.9
|
Core EPS (sen)
|
9.7
|
9.1
|
11.4
|
9.9
|
Core EPS growth (%)
|
111.4
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(6.8)
|
26.1
|
(13.4)
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Net DPS (sen)
|
4.5
|
7.0
|
8.0
|
7.9
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Core P/E (x)
|
16.6
|
17.8
|
14.1
|
16.3
|
P/BV (x)
|
1.4
|
1.4
|
1.3
|
1.3
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Net dividend yield (%)
|
2.8
|
4.3
|
5.0
|
4.9
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ROAE (%)
|
8.7
|
9.3
|
9.7
|
8.2
|
ROAA (%)
|
1.2
|
1.5
|
1.9
|
1.6
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EV/EBITDA (x)
|
na
|
8.9
|
6.9
|
6.5
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Net debt/equity (%)
|
361.6
|
238.9
|
205.8
|
175.3
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Share
Price:
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MYR8.46
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Target
Price:
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MYR7.00
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Recommendation:
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Sell
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Concrete cracks
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| Poor core 1Q16 net profit of MYR26m was significantly
below our and market’s expectations. Furthermore, LMC has also lost its
only appeal as a high-yield play with its first interim dividend
reduced to only 3sen/shr (-63% YoY); annualising it indicates a dividend
yield of only 1.4% for 2016. Maintain our earnings forecasts, SELL call
and TP of MYR7.00 (22x 2016 PER; mean) pending a briefing next Monday. |
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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
|
2,743.1
|
2,750.8
|
2,627.7
|
2,751.6
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EBITDA
|
493.5
|
509.4
|
552.6
|
595.1
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Core net profit
|
256.0
|
251.0
|
268.7
|
281.3
|
Core EPS (sen)
|
30.1
|
29.5
|
31.6
|
33.1
|
Core EPS growth (%)
|
(30.2)
|
(1.9)
|
7.1
|
4.7
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Net DPS (sen)
|
34.0
|
31.0
|
31.0
|
31.5
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Core P/E (x)
|
28.1
|
28.6
|
26.7
|
25.6
|
P/BV (x)
|
2.3
|
2.3
|
2.3
|
2.3
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Net dividend yield (%)
|
4.0
|
3.7
|
3.7
|
3.7
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ROAE (%)
|
8.1
|
8.1
|
8.7
|
9.1
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ROAA (%)
|
6.4
|
6.0
|
6.2
|
6.4
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EV/EBITDA (x)
|
15.9
|
14.9
|
13.0
|
11.8
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Net debt/equity (%)
|
net cash
|
1.0
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net cash
|
net cash
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Share
Price:
|
MYR0.91
|
Target
Price:
|
MYR1.16
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Recommendation:
|
Buy
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1Q16 a miss
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| 1Q16 results fell short, on widening QoQ core net losses.
This prompted a 69-104% rise to our net loss forecasts for FY16-18.
Despite the setback, downside is limited for the tough operating and
financial outlook over the next 12 months has been reflected in the
share price’s performance (-56% since a year ago). We reiterate our
contrarian Trading BUY call with an unchanged MYR1.16 TP, based on 1x
EV/replacement value. |
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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
|
1,014.9
|
839.9
|
576.5
|
675.4
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EBITDA
|
410.8
|
(64.2)
|
(14.5)
|
48.2
|
Core net profit
|
251.8
|
(7.5)
|
(277.8)
|
(215.1)
|
Core EPS (sen)
|
11.6
|
(0.3)
|
(12.8)
|
(9.9)
|
Core EPS growth (%)
|
51.4
|
nm
|
nm
|
nm
|
Net DPS (sen)
|
100.0
|
0.0
|
0.0
|
0.0
|
Core P/E (x)
|
7.8
|
(260.9)
|
(7.0)
|
(9.1)
|
P/BV (x)
|
0.6
|
0.6
|
0.6
|
0.7
|
Net dividend yield (%)
|
110.5
|
0.0
|
0.0
|
0.0
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ROAE (%)
|
8.3
|
(0.2)
|
(8.7)
|
(7.3)
|
ROAA (%)
|
5.2
|
(0.1)
|
(3.8)
|
(3.2)
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EV/EBITDA (x)
|
15.0
|
nm
|
nm
|
105.9
|
Net debt/equity (%)
|
33.7
|
90.9
|
100.1
|
110.3
|
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Share
Price:
|
MYR10.64
|
Target
Price:
|
MYR10.00
|
Recommendation:
|
Hold
|
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Lacks catalyst
|
|
| 1Q16 core PATMI came in below expectations largely on
negative FFB output growth, and low CPO ASP achieved. Earnings will get
better but largely in 2H16 as FFB output is expected to remain weak in
2Q16. Given the lack of catalyst and trading at 26x 2016 PER, GENP
remains a HOLD with an unchanged RNAV-based TP of MYR10.00. |
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
Revenue
|
1,642.9
|
1,374.9
|
1,601.5
|
1,778.8
|
EBITDA
|
562.6
|
358.7
|
512.0
|
638.3
|
Core net profit
|
380.0
|
205.7
|
322.5
|
414.0
|
Core EPS (sen)
|
49.3
|
26.3
|
41.2
|
52.9
|
Core EPS growth (%)
|
22.7
|
(46.7)
|
56.8
|
28.4
|
Net DPS (sen)
|
10.0
|
5.5
|
8.2
|
10.6
|
Core P/E (x)
|
21.6
|
40.5
|
25.8
|
20.1
|
P/BV (x)
|
2.1
|
2.0
|
1.9
|
1.7
|
Net dividend yield (%)
|
0.9
|
0.5
|
0.8
|
1.0
|
ROAE (%)
|
10.4
|
5.1
|
7.4
|
8.9
|
ROAA (%)
|
7.3
|
3.2
|
4.3
|
5.3
|
EV/EBITDA (x)
|
14.1
|
26.3
|
18.8
|
15.1
|
Net debt/equity (%)
|
net cash
|
20.5
|
23.7
|
22.3
|
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Share
Price:
|
MYR1.15
|
Target
Price:
|
MYR1.30
|
Recommendation:
|
Hold
|
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|
1Q16: Dragged by
weak output
|
|
| THP’s 1Q16 results fell short due to weaker-than-expected
FFB output that was affected by the dry weather. However, earnings
should improve in the coming quarters on seasonally stronger production
and higher CPO price. Therefore, our earnings forecasts are unchanged.
Maintain HOLD at an unchanged TP of MYR1.30 based on 1x trailing P/NTA
(-1SD of 3-year mean trailing P/NTA) due to the lack of catalyst. |
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
Revenue
|
488.9
|
455.3
|
510.0
|
575.0
|
EBITDA
|
156.8
|
75.4
|
166.7
|
187.0
|
Core net profit
|
34.6
|
9.7
|
26.4
|
36.1
|
Core EPS (sen)
|
3.9
|
1.1
|
3.0
|
4.1
|
Core EPS growth (%)
|
(45.4)
|
(72.0)
|
173.0
|
36.8
|
Net DPS (sen)
|
2.0
|
0.0
|
0.9
|
1.2
|
Core P/E (x)
|
29.4
|
105.1
|
38.5
|
28.1
|
P/BV (x)
|
0.8
|
0.8
|
0.8
|
0.8
|
Net dividend yield (%)
|
1.7
|
0.0
|
0.8
|
1.1
|
ROAE (%)
|
2.9
|
0.8
|
2.1
|
2.8
|
ROAA (%)
|
1.0
|
0.3
|
0.8
|
1.0
|
EV/EBITDA (x)
|
16.8
|
33.7
|
15.4
|
13.7
|
Net debt/equity (%)
|
60.7
|
91.3
|
92.8
|
90.4
|
|
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|
MACRO RESEARCH
|
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Economics Research
by
Suhaimi Ilias
|
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|
Deflation but
core edging up
|
|
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|
|
Headline inflation rate continued to decline in Apr
2016 by -0.5% YoY (Mar 2016: -1.0% YoY) while core inflation edged up
+0.8% YoY (Mar 2016: +0.6% YoY). MAS maintain their headline
inflation forecast for 2016 at -1.0%-0.0% and core inflation forecast
at +0.5-1.5%. No change to our 2016 headline inflation rate forecast
at -0.4% and expect core inflation rate at +0.5%. |
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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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|
The FBMKLCI rose by 6.10 points to close at 1,634.89
yesterday, while the FBMEMAS and FBM100 gained 41.36 and 44.18 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 339-to-449, while 378 counters were unchanged. A total of 1.74b
shares were traded valued at MYR1.38b. |
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NEWS
|
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|
Outside Malaysia:
U.S: Fed’s Harker sees two to three hikes in 2016 as
prices gain. Federal Reserve Bank of Philadelphia President Patrick
Harker said that he could see two to three rate hikes in 2016 and that
prices will return towards the central bank’s inflation target over the
medium term. “Although I cannot give you a definitive path for how policy
will evolve, I can easily see the possibility of two or three rate hikes
over the remainder of the year,” he told an audience in Philadelphia.
Harker later told reporters that “if the data comes in and it’s not that
consistent with my view of the strength in the economy, then I would
pause, but otherwise, I think a June rate increase is appropriate.” The
policy-setting Federal Open Market Committee next meets June 14-15 in Washington.
(Source: Bloomberg)
E.U: Growth in the Euro Area’s private sector unexpectedly
slowed in May, signaling that the region won’t maintain the strong pace
of expansion recorded at the start of the year. A Purchasing Managers
Index slipped to 52.9 from 53 in April, London-based Markit Economics
said. A gauge for services activity held at 53.1, while one for
manufacturing fell to 52.4 from 52.6. The 19-nation economy expanded 0.5%
in the first quarter, the fastest pace in a year. (Source: Bloomberg)
Crude oil: Trades near USD 48/bbl as US stockpiles seen
declining. Inventories dropped by 2 million barrels last week, according
to a Bloomberg survey before Energy Information Administration data
Wednesday. All of the Canadian oil-sands facilities that workers
evacuated as a wildfire spread are being allowed to prepare for restart
as cool, humid weather have helped contain the inferno. Oil has surged
more than 80% from a 12-year low earlier this year on signs the global
surplus will ease as U.S. output declines. The Organization of Petroleum
Exporting Countries is unlikely to set a production target when it meets
June 2 as it sticks with Saudi Arabia’s strategy to squeeze out rivals,
according to all but one of 27 analysts surveyed by Bloomberg. (Source:
Bloomberg) |
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Other news:
Reach Energy: To raise up to MYR180m via a private
placement. Reach Energy proposes to undertake a private placement
exercise to raise up to MYR180m to address the potential cash shortfall
to purchase shares from dissenting shareholders in relation to its qualifying
acquisition. Last March, the company signed a conditional sale and
purchase agreement with MIE Holdings Corp to acquire a 60% equity
interest in Palaeontol BV, the sole interest holder of Kazakhstan’s
Emir-Oil LLP, for USD 154.9m. In the event there are no dissenting
shareholders, the company will have sufficient funds to settle the entire
adjusted purchase consideration for the proposed acquisition at
completion which shall not be greater than USD175.89m (MYR715m). (Source:
The Sun Daily)
EG Industries: Bags MYR146m smart button deal. EG
Industries has clinched a two-year contract worth USD36m (MYR146m) from
Swedish-based Short cut Labs AB to be the sole manufacturer of a wireless
smart button, known as Flic, and to distribute the button in Asia. Flic
is a wireless smart button that creates a shortcut to favorite actions on
mobile devices. In addition to producing Flic, the company is also the
sole distributor in the Asian market. (Source: The Edge Financial Daily)
MAHB: Kick-starts Aeropolis project with 5 partnerships.
Malaysia Airports Holdings (MAHB) has formed five partnerships with
several parties, including, AirAsia and DRB Hicom, to expand air cargo
operations as well as aeronautical support; logistics; and maintenance;
repair and overhaul services locally. MAHB entered into three memoranda
of understanding (MOU) and two partnership agreements for the development
of KLIA Aeropolis yesterday. Under the MOU with AirAsia, the low-cost
carrier will develop a regional distribution centre at the cargo terminal
for its low-cost express courier and parcel delivery services called
Redbox. Under the MOU with DRB Hicom, its wholly-owned unit KL Airport
Services Sdn Bhd an aviation ground services provider will develop a
450,000 sq ft space in the former low-cost carrier terminal (LCCT) into a
cargo terminal. (The Edge Financial Daily) |
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