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Share
Price:
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MYR5.01
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Target
Price:
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MYR4.60
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Recommendation:
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Hold
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Reversal of
tailwinds
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| While the upcoming 3QFY8/16 results could be sequentially
weaker, it could still be within ours and market’s expectations.
Nevertheless, we cut FY8/17-18 EPS forecasts by 11% p.a. on a lower
USD/MYR assumption of 4.00. We also lower 2017 PER target to its mean
of 15x (from 19x) given its normalising earnings outlook. Consequently,
our new TP is MYR4.60 (from MYR6.50) and the stock is now a HOLD
(previously BUY). |
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FYE Aug (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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2,275.4
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2,510.5
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2,972.0
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3,039.9
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EBITDA
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298.5
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454.3
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623.5
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581.8
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Core net profit
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180.5
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279.8
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400.2
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367.2
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Core EPS (sen)
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14.6
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22.6
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32.3
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29.6
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Core EPS growth (%)
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(8.2)
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55.0
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43.0
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(8.2)
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Net DPS (sen)
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8.0
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11.5
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16.1
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14.8
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Core P/E (x)
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34.4
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22.2
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15.5
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16.9
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P/BV (x)
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4.5
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3.9
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3.4
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3.1
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Net dividend yield (%)
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1.6
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2.3
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3.2
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3.0
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ROAE (%)
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13.3
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18.6
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23.4
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19.3
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ROAA (%)
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9.8
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12.1
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14.2
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12.0
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EV/EBITDA (x)
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9.4
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10.1
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9.6
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10.0
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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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NEWS
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Outside Malaysia:
U.K: Four polls put U.K. on course to leave EU as ‘Sun’
backs Brexit. Britain appeared to be on course to leave the European
Union, with four polls from three companies putting the “Leave” campaign
ahead of “Remain.” Monday saw a day of intense volatility on the currency
markets, as the pound swung between losses of 1% and gains of 0.5%. Then
in the evening came a series of polls putting “Leave” ahead. In the day’s
final blow to “Remain,” the Sun, Britain’s biggest-selling newspaper,
backed a so-called Brexit on its front page. (Source: Bloomberg)
China: Investment growth slows in May. Fixed asset
investment, an important gauge of infrastructure spending, slowed to its
weakest pace in 16 years government statistics showed, a worrying trend
despite other signs of economic stabilisation in the Asian giant. The
moderation comes after a record credit binge in the first quarter of the
year, a splurge aimed at stimulating China’s slowing economy. Fixed asset
investment rose 9.6% YoY in the first five months of the year according
to the National Bureau of Statistics. The world’s number two economy, a
key driver of global expansion, grew just 6.9% in 2015, the weakest rate
in a quarter of a century. (Source: AFP)
India: Retail inflation accelerated more than estimated in
May, the second surprise in as many months that reduces room for more
interest-rate cuts. Consumer prices rose 5.76% YoY after a 5.47% increase
in April, the Statistics Ministry said. Focus now shifts to the monsoon,
which waters more than half of India’s farmlands and can keep food costs
low. While the weather department has forecast above-normal rainfall this
year after two droughts, more clarity will emerge only next month on how
much help it will offer central bank Governor Raghuram Rajan in meeting
his 5% CPI target for March 2017. (Source: Bloomberg) |
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Other News:
Aviation: Rayani Air appeals for second chance. The
airline will appeal to the Malaysia’s airline authority after the
Malaysian Aviation Commission (Mavcom) and Department of Civil Aviation
(DCA) revoked the airline’s Air Service Licence and Air Operator's
Certificate, effective Monday. The revocation is said to be caused by the
company breaching the conditions of the license and lacks financial and
management capacity for operations. (Source: The Star)
Crest Builder: Clinches MYR438.3m contract. The company
wins a contract to build residential and commercial buildings at Sime
Darby Property’s KL East development in Setapak. The project is expected
to take about 30 months from site possession to complete, with completion
targeted by the first quarter of 2019. (Source: The Edge Financial Daily)
Westports: Poised to lose biggest customer. The company’s
largest customer, French container shipping firm CMA GGMSA, plans to move
its shipping traffic from Malaysia to Singapore following a deal with the
Port of Singapore (PSA). Last year, the company handled 9.1m 20-foot
equivalent units (TEUs) of containers, 30% of which were businesses from
CMA CGM. (Source: The Edge Financial Daily)
LTKM: Buys CN Asia land. The company, plans to buy four
parcels of adjoining land measuring 25,837sq m, currently occupied by CN
Asia Corporation for MYR58.4m, for future property development. LTKM also
agreed to buy two other leasehold land measuring 4,760sq m and 4,849sq m
respectively from Crystal Bond Sdn Bhd and Marvellous Production Sdn Bhd.
CN Asia will use the sale proceeds mainly to repay its bank borrowings
and future working capital. (Source: The Sun Daily) |
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