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Share
Price:
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MYR1.45
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Target
Price:
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MYR1.60
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Recommendation:
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Buy
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Snaps up Mexico
deal
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The USD113m Pemex EPC job ensures continuity of work flow
(2% of backlog), earnings and decent asset utilisation (Sapura 3500) in
this low activity market. While the key is to survive this cyclical
downturn, SAKP is shaping up (financially and operationally) to
capitalise on the eventual upturn. Signing of several new, bigger GSAs
are midterm key catalysts. SAKP is also a high beta stock for the
strengthening of oil price play.
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FYE Jan (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
|
9,943.0
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10,184.0
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7,232.9
|
7,633.5
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EBITDA
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3,120.5
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3,088.6
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2,254.8
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2,242.9
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Core net profit
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1,216.7
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1,009.4
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107.6
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143.3
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Core EPS (sen)
|
20.3
|
16.9
|
1.8
|
2.4
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Core EPS growth (%)
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13.6
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(16.8)
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(89.3)
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33.2
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Net DPS (sen)
|
4.3
|
1.4
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0.0
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0.0
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Core P/E (x)
|
7.1
|
8.6
|
80.5
|
60.4
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P/BV (x)
|
0.7
|
0.7
|
0.7
|
0.7
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Net dividend yield (%)
|
3.0
|
0.9
|
0.0
|
0.0
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ROAE (%)
|
11.0
|
8.3
|
0.9
|
1.2
|
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ROAA (%)
|
4.0
|
2.8
|
0.3
|
0.4
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EV/EBITDA (x)
|
10.2
|
8.9
|
10.9
|
10.7
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Net debt/equity (%)
|
131.0
|
134.2
|
129.5
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123.1
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Share
Price:
|
MYR8.89
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Target
Price:
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MYR9.05
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Recommendation:
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Hold
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Results Review
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Bursa’s flattish 2Q16 and 1H16 profits were in line,
supported by stable equity trading value, with a marginal lift from
higher derivative trading volume. An interim dividend of 17sen
represents a 92% payout, also in line. There is no change to our earnings
forecasts and MYR9.05 TP which pegs the stock to 23x 2016 PER, in line
with peers’ average. 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
|
503.8
|
518.5
|
540.6
|
568.8
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EBITDA
|
297.0
|
302.5
|
315.0
|
333.2
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Core net profit
|
198.2
|
198.6
|
210.1
|
222.9
|
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Core EPS (sen)
|
37.2
|
37.2
|
39.3
|
41.7
|
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Core EPS growth (%)
|
14.4
|
(0.0)
|
5.7
|
6.1
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Net DPS (sen)
|
54.0
|
34.5
|
36.5
|
39.0
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Core P/E (x)
|
23.9
|
23.9
|
22.6
|
21.3
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P/BV (x)
|
6.3
|
5.9
|
5.8
|
5.7
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Net dividend yield (%)
|
6.1
|
3.9
|
4.1
|
4.4
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ROAE (%)
|
25.4
|
25.6
|
25.9
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27.0
|
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ROAA (%)
|
11.7
|
10.6
|
9.9
|
10.2
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EV/EBITDA (x)
|
13.7
|
13.8
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14.3
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13.6
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
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Share
Price:
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MYR3.78
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Target
Price:
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MYR3.80
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Recommendation:
|
Buy
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Wins Pan Borneo
contract
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The Pan Borneo Sarawak Highway project contract win will
triple CMS’ outstanding orderbook to MYR1.45b while bolstering demand
for its building materials. We estimate a total net profit contribution
of MYR30m (3sen EPS) over 4 years into 2020 but our forecasts remain
intact, having factored in job wins. Maintain BUY and our SOP-based TP
of MYR3.80 for now pending further clarification with management.
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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
|
1,673.9
|
1,788.0
|
1,543.9
|
2,022.1
|
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EBITDA
|
372.5
|
398.2
|
345.0
|
418.4
|
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Core net profit
|
221.3
|
248.1
|
182.4
|
233.1
|
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Core EPS (sen)
|
21.3
|
23.1
|
17.0
|
21.7
|
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Core EPS growth (%)
|
23.9
|
8.5
|
(26.5)
|
27.8
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Net DPS (sen)
|
8.5
|
4.5
|
6.8
|
8.7
|
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Core P/E (x)
|
17.8
|
16.4
|
22.3
|
17.4
|
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P/BV (x)
|
2.2
|
2.0
|
1.9
|
1.8
|
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Net dividend yield (%)
|
2.2
|
1.2
|
1.8
|
2.3
|
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ROAE (%)
|
12.8
|
13.0
|
8.8
|
10.6
|
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ROAA (%)
|
8.5
|
8.2
|
5.3
|
6.2
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EV/EBITDA (x)
|
9.8
|
14.2
|
13.0
|
10.9
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Net debt/equity (%)
|
net cash
|
net cash
|
4.9
|
5.0
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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The decline in headline inflation rate for Jun 2016
eased to -0.7% YoY (May 2016: -1.6% YoY) while core inflation was
firm at +1.1% YoY (May 2016: +1.0% YoY). The decline was mainly
attributed to lower cost in “Housing & Utilities” as well as
“Transport”, cancelling the positive contribution by “Food” prices.
No change to our 2016 headline inflation rate forecast at -0.4% but
raised our core inflation rate forecast to +1.0% from +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 10.84 points to close at 1,668.26
yesterday and the FBMEMAS and the FBM100 gained 72.77 points and
72.81 points respectively. In terms of market breadth, the
gainer-to-loser ratio was 416-to-363, while 362 counters were
unchanged. A total of 1.60b shares were traded valued at MYR1.57b.
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NEWS
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Outside Malaysia:
S. Korea: Growth rate improves on consumption,
construction. South Korea’s growth rate advanced in the second quarter
supported by gains in private consumption and construction. Gross
domestic product rose 0.7% from the first quarter, when it expanded 0.5%,
the Bank of Korea said. The economy grew 3.2% YoY. An extension until the
end of June of temporary tax discounts for car purchases helped
consumption and a construction boom continued, spurred by low interest
rates. The central bank earlier this month cut its full-year GDP forecast
slightly to 2.7%, citing risks including restructuring of indebted
companies, implementation of an anti-corruption law and global
uncertainty amid the U.K.’s vote to leave the European Union. (Source:
Bloomberg)
Philippine: New leader sets out growth focus in first big
speech. Philippine President Rodrigo Duterte promised to keep the
economic policies of his predecessor “and even do better,” outlining
policies he said would boost growth and create jobs to lift people out of
poverty. The former mayor, who took office June 30, vowed in his first
state of the nation address to relax economic restrictions and make it
easier to do business, in a bid to attract more foreign investment.
Duterte pledged to lower personal and corporate income taxes and relax
rules protecting the secrecy of bank deposits. (Source: Bloomberg)
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Other News:
VS Industry: Buys stake in NEP for MY60m. VS Industry has
to date entered into a conditional subscription agreement with NEP and
Lim Chang Huat to subscribe to up to 251,451 shares in NEP, which
represents a 20% stake in the company in the Diamond water filtration
system producer NEP Holdings (M) Bhd for MYR60m cash. The original
equipment manufacturer said the major shareholder of NEP has given a
minimum profit guarantee of MYR40m for the financial year ending June 30,
2017 (FY6/17). The MYR60m cash will come from VS Industry’s internal
funds and bank borrowings. VS Industry’s acquisition price valued the NEP
group at MYR300m, versus the fair value range of between MYR358m and
MYR477m assigned by FHMH Corporate Advisory Sdn Bhd, an independent
market valuer. (Source: The Star)
Sedania Innovator: Sedania, Cloudera tie up for data
analytics services. Sedania Innovator has entered into a partnership with
global data analytics giant Cloudera to be the first and only gold
partner in big data analytics services in Southeast Asia. Under the
five-year partnership agreement signed yesterday, Sedania Innovator would
have rights to provide Cloudera data analytics services to corporations
in Malaysia, as well as access to the rest of the Southeast Asia region.
This venture would enable both Sedania and Cloudera to capture sizable
market share in the big data analytics market, in light of Cloudera’s
comprehensive service offerings and IDC’s prediction of almost USD80m
(MYR325.8m) spending in Malaysia for Big Data Analytics by the year of
2018. (Source: The Sun daily)
Scomi Engineering: Court dismisses Scomi's suit against
Prasarana. The High Court has dismissed the suit filed by Scomi Transit
Projects Sdn Bhd (STP), a unit of Scomi Engineering , against Prasarana
Malaysia over Prasarana’s termination of a contract between the two
parties dated June 9. Under the contract, STP was to deliver 12 sets of
new four-car monorail trains, construct a new depot, install a new
signalling system and upgrade the KL Monorail stations, including the
electrical and mechanical system, for a total of MYR494m. Prasarana,
however, claimed that only six sets of new four-car trains had been
delivered to date. Both parties are in dispute over the delay of the
train delivery. Scomi said the suit was a step taken in an ongoing effort
by STP to ensure that the project was completed and to prevent Prasarana
from unfairly terminating the contract. (Source: The Edge Financial
Daily)
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