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Share
Price:
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MYR6.44
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Target
Price:
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MYR6.40
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Recommendation:
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Hold
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What a weekend
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The failed military coup d’แบป-tat at Turkey adds to a long
adverse list against air travel. Second, the Malaysian government is
considering allowing only passengers to enter airport terminals in
order to enhance security. Both events are negative to MAHB. We keep
our earnings forecasts and HOLD call unchanged pending unfolding of the
events. We reduce our TP to MYR6.40 as the risk profile has risen; we
now apply a 10% discount to our DCF-based TP (WACC: 9.6%, terminal
growth: 2%).
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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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3,343.7
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3,871.0
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4,278.0
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4,612.3
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EBITDA
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815.4
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1,342.0
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1,578.6
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1,729.4
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Core net profit
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146.5
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(118.0)
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98.3
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224.4
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Core EPS (sen)
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10.9
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(7.4)
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5.9
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13.5
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Core EPS growth (%)
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(62.9)
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nm
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nm
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128.3
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Net DPS (sen)
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10.4
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0.9
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3.4
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8.3
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Core P/E (x)
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59.2
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(86.8)
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108.7
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47.6
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P/BV (x)
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1.2
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1.2
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1.2
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1.2
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Net dividend yield (%)
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1.6
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0.1
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0.5
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1.3
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ROAE (%)
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2.2
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(1.5)
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1.1
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2.6
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ROAA (%)
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0.9
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(0.5)
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0.5
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1.1
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EV/EBITDA (x)
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15.8
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10.1
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9.6
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8.3
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Net debt/equity (%)
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58.6
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52.2
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50.6
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42.5
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SECTOR RESEARCH
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Opportunities
favour the ready
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Semiconductor players should have seen a pick-up in
demand in preparation of major smartphone launches in 2H16.
Furthermore, 2QCY16 earnings will likely to be boosted by reversal in
forex losses incurred in 1QCY16 due to the stronger USD at quarter
end. Yet, YTD share prices remain in negative territory for most
technology players, offering a decent entry point for net USD
exporters with good demand visibility. We reiterate our POSITIVE
stance on the sector with BUYs on Inari and ViTrox.
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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China’s 2Q 2016 GDP growth was steady at +6.7% YoY (1Q
2016: +6.7% YoY), in line with the official full-year growth aim of
6.5%-7.0%. No change in our full-year growth forecast of +6.6% (1H
2016: +6.7%; 2015: +6.9%).
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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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Buoyant DJIA.
Rebounding FBMKLCI.
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The FBMKLCI rose 23.86 points WoW to close at 1,668.40
as the Dow led global markets up. The market traded in a wider range
and daily volume ranged from 1.40b to 1.89b shares last week.
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NEWS
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Outside Malaysia:
U.S: Consumer sentiment drops as high earners shaken by
Brexit. Consumer confidence in the U.S. dropped in July as U.K.’s vote to
leave the European Union flustered high- income earners. The University
of Michigan’s preliminary sentiment index fell to 89.5, a three-month
low, from 93.5 in June. The Brexit vote’s outcome caused global equity
markets to briefly slump, giving Americans in the upper third of the
income scale reason to shudder over their finances. The subsequent
rebound in stocks means confidence probably will soon regain some of its
lost ground, according to Richard Curtin, the Michigan survey’s director.
(Source: Bloomberg)
U.K. Property market proves resilient in face of Brexit
vote. The appeal of bricks and mortar remained relatively robust in the
face of the initial shock of Britain’s vote to leave the European Union.
U.K. house prices declined 0.9% to GBP 305,504 (USD 406,000) this month,
a drop only slightly greater than the average over the past six years,
according to property website operator Rightmove. Buyer demand declined
from last year, when it was boosted by the general election result, but
was at the same level as 2014 amid supply constraints and low mortgage
rates. (Source: Bloomberg)
China: Economy gets boost from property, construction
sectors. China’s real estate sector grew faster than the overall economy
in the second quarter as new home purchase restrictions in the biggest
cities failed to deter buyers. Economic output by real-estate brokers
surged 8.8% YoY in the April-to-June period, while construction
activities jumped 7.3% YoY, data from the National Bureau of Statistics
showed. The nation’s gross domestic product grew 6.7% YoY. Other
industries such as technology, health and education increased 9% YoY.
(Source: Bloomberg)
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Other News:
Ireka: Plans six projects worth MYR1.3b. Property
development and construction outfit Ireka Corp is expecting to roll-out
six property launches over the next 18 months, with total expected gross
development value (GDV) of MYR1.3b. The six projects planned are mainly
spread out in Kajang and Nilai (with a small portion in Mont Kiara),
including the first phase of its dwi@Rimbun Kasia project, a court-yard
style apartment project in Nilai with an expected GDV of MYR130m, and
will be the first to be launched. The group’s FY17 business, however,
will still have to rely on its construction segment as its planned
property projects are only expected to provide meaningful contribution to
the group’s earnings from FY18. (Source: The Edge Financial Daily)
CIMB: Cuts base lending rate. CIMB Group Holdings has
joined other banks in lowering its base rate (BR) by 20 basis points
(bps) for loans or financing products for its Malaysian business
following Bank Negara Malaysia’s reduction in its overnight policy rate
last week. Thus, all loans/financing pegged to its BR/base lending rate
(BLR)/ base financing rate (BFR) will be adjusted accordingly. In line
with this change, CIMB’s deposit rates will be revised downwards by up to
20bps. (Source: The Edge Financial Daily)
Thong Guan: Plans to be largest PVC food wrap producer in
S-E Asia. Packaging firm Thong Guan Industries is targeting to be the
largest polyvinyl chloride (PVC) food wrap producer in South-East Asia by
end-2017. The company would be spending USD6m (MYR23.76m) to acquire four
more production lines over the next two years. The company is also
building a MYR1m warehouse to store the raw materials and finished goods
for the PVC packaging products. The PVC food wrap output per annum is now
about 8,000 tonnes. The output is expected to increase to 14,000 tonnes
by 2018. (Source: The Star)
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