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Share
Price:
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MYR1.64
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Target
Price:
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MYR1.50
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Recommendation:
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Hold
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Carnival Mall
extension in plan
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| We are positive on SunREIT’s proposed acquisition of a
vacant land from Sunway Bhd which could pave the way for Sunway
Carnival Mall’s expansion in the near future. We also believe that the
purchase price is fair based on the district’s average asking price.
However, our DCF-based TP of MYR1.50 (WACC: 6.6%, terminal yield: 7%)
and forecasts are unchanged at this juncture, pending SC’s approval and
further details on the planned extension. Maintain HOLD. |
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FYE Jun (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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427.8
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453.5
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504.5
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522.6
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Net property income
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321.0
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340.8
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388.7
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403.6
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Distributable income
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231.9
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242.0
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257.1
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266.7
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DPU (sen)
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7.5
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7.8
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7.6
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7.9
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DPU growth (%)
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0.7
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4.3
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(2.6)
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3.7
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Price/DPU(x)
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21.8
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20.9
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21.5
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20.7
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P/BV (x)
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1.3
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1.2
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1.2
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1.2
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DPU yield (%)
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4.6
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4.8
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4.7
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4.8
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ROAE (%)
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6.4
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6.3
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6.3
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6.4
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ROAA (%)
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4.3
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4.0
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4.0
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4.0
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Debt/Assets (x)
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0.3
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0.3
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0.4
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0.4
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Share
Price:
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MYR2.90
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Target
Price:
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MYR3.15
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Recommendation:
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Hold
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Strong end to
FY16 but still cautious
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| 4QFY4/16 and FY16 earnings and dividends were within our
expectations. Gross NFO revenue per draw continues to be a tad weak
though. Therefore, we trim our FY17/FY18 gross NFO revenue per draw
growth assumption from +2%/+2% to -2%/+2%. The net impact is lower
earnings estimates by -5% p.a. and SOP-based TP by 5sen to MYR3.15.
While BST is currently offering attractive dividend yields of >7%
p.a., we maintain our HOLD call for now as upside potential is just 9%. |
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FYE Apr (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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5,283.6
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5,563.2
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5,499.6
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5,562.9
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EBITDA
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566.4
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508.6
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515.4
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520.6
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Core net profit
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343.5
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306.2
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316.1
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325.9
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Core EPS (sen)
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25.5
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22.7
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23.5
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24.2
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Core EPS growth (%)
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(0.6)
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(11.0)
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3.3
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3.1
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Net DPS (sen)
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21.5
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19.0
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20.5
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21.0
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Core P/E (x)
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11.4
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12.8
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12.4
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12.0
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P/BV (x)
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5.7
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5.1
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4.9
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4.6
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Net dividend yield (%)
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7.4
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6.6
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7.1
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7.2
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ROAE (%)
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52.3
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42.3
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40.3
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39.4
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ROAA (%)
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15.6
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12.6
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12.3
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13.1
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EV/EBITDA (x)
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8.3
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8.8
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8.2
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8.1
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Net debt/equity (%)
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38.7
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38.9
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31.4
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23.6
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SECTOR RESEARCH
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May 2016 TIV remains subdued on weak consumer
sentiment, recording just 44.7k units (+6% MoM, -13% YoY). This
brings 5M16 TIV to 218k units (-18% YoY), representing only 35% of
our 2016 TIV forecast of 620k units (-7% YoY). The last time annual
TIV saw a double-digit YoY decline was in 2006 (-11% YoY). Expect
downgrades in TIV forecasts by consensus. Risk remains on the
downside; maintain SELL on UMWH and TCM. |
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MACRO RESEARCH
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Technical Research
by Lee
Cheng Hooi
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The FBMKLCI rose by 10.05 points to close at 1,634.23
yesterday, while the FBMEMAS and the FBM100 gained 49.01 points and
50.44 points respectively. In terms of market breadth, the
gainer-to-loser ratio was 365-to-366 while 361 counters were
unchanged. A total of 1.24b shares were traded valued at MYR1.41b. |
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NEWS
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Outside Malaysia:
U.K: Brexit vote in the balance as polls differ over which
side leads. A YouGov poll of 1,652 voters for the Times newspaper
published showed “Leave” at 44% and 42% for “Remain”, while a survey of
800 people by ORB for the Daily Telegraph had “Remain” at 53% and “Leave”
at 46% among those certain to vote. (Source: Bloomberg)
India: Rajan’s departure leaves India Bank cleanup as
unfinished task. Raghuram Rajan’s announcement that he won’t seek a new
term as governor of the Reserve Bank of India leaves a key policy
challenge to his successor - the successful completion of a clean-up of
more than USD 100b of stressed assets on the books of Indian banks.
Rajan’s campaign to force the country’s banks to recognize the true state
of their bad loans culminated in a six-month asset-quality review that
led to banks reporting a surge in bad- debt disclosures and higher losses
earlier this year. But the March 2017 deadline set by Rajan for the
completion of the clean-up will come after he leaves office in early
September. (Source: Bloomberg) |
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Other News:
Puncak Niaga: Received notices of arbitration. The
company’s wholly owned subsidiary Puncak Niaga Construction Sdn Bhd, has
received two notices of arbitration from Genbina Sdn Bhd for a total
alleged sum of RM143.9 million, due to disputes arising from the
termination of Genbina’s appointment as a subcontractor. Puncak Niaga had
appointed Genbina as its subcontractor for the project in Bunus catchment
area worth MYR394m via a letter of award dated March 6, 2014. (Source:
The Sun Daily)
IPO: Rhone Ma plans to offer 42.12 million shares for IPO.
The number 42.12 million shares offered for IPO on Bursa Malaysia
represents 25.37% equity stake in Rhone Ma, according to the draft
prospectus on the Securities Commission’s website yesterday. The funds
raised from the IPO would be utilized for capital expenditure (77.55%),
estimated listing expenses (15.83%) and working capital (6.62%). The
company is a supplier of animal health solution and food ingredients.
(Source: The Edge Financial Daily)
IPO: HSS Engineers to issue shares via IPO. The company
has named M&A Securities Sdn Bhd as the underwriter for its proposed
initial public offering (IPO) on the ACE Market of Bursa Malaysia
Securities. M&A Securities will also act as HSS principal adviser,
sponsor, and placement agent for the IPO, which Bursa Malaysia approved
on June 1. Out of the 63.82m new shares to be issued, 15.95 million
shares will be available to Malaysian public, and 7.98 million shares
will be earnmarked for eligible directors, employees and business
associates, as well as 39.89 million issue shares allocated for private
placement to selected investors. The listing also involves an offer for
sale of 31.91 million existing shares available for private placement to
selected bumiputera investors. (Source: The Edge Financial Daily)
Ikhmas Jaya: Bidding for jobs worth MYR8.9b. The company
has tendered for MYR8.9b worth of jobs under Klang Valley Mass Rapid
Transit Line 2 (KVMRT2) and highway projects such as Pan Borneo Highway
Sarawak, Damansara-Shah Alam Elevated Expressway and Sungai Besi-Ulu
Kelang Elevated Expressway. The group is also looking to participate in
the MYR60b Bandar Malaysia project. (Source: The Sun Daily)
Sime Darby: Wins second PSA Singapore deal. Terberg
Tractors Malaysia Sdn Bhd, a 50:50 joint venture between the company’s
unit Terberg Tractors Malaysia Sdn Bhd and Netherlands-based Terberg
Group has won contracts worth more than MYR90m from PSA Singapore
Terminals. The JV would manufacture and supply PSA with a total of 290
terminal tractors, with an option for another 390 units. The delivery
would take place between October 2016 and March 2017. (Source: The Star)
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