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Share
Price:
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MYR14.32
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Target
Price:
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MYR16.40
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Recommendation:
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Buy
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Solid delivery
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FY16 results were ahead of expectations due to
lower-than-expected taxes. Rising coal prices is potentially both a
near-term dampener, and a medium-term re-rating catalyst. Our BUY
rating is unchanged with a marginally higher MYR16.40 TP (+40sen).
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FYE Aug (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
|
43,286.8
|
44,531.5
|
48,470.6
|
49,809.9
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EBITDA
|
13,921.8
|
14,794.2
|
15,566.9
|
15,927.0
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Core net profit
|
7,050.7
|
7,725.8
|
7,549.6
|
7,673.0
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Core EPS (sen)
|
124.9
|
136.9
|
133.8
|
136.0
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Core EPS growth (%)
|
29.9
|
9.6
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(2.3)
|
1.6
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Net DPS (sen)
|
29.0
|
32.0
|
34.0
|
36.0
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Core P/E (x)
|
11.5
|
10.5
|
10.7
|
10.5
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P/BV (x)
|
1.7
|
1.5
|
1.4
|
1.3
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Net dividend yield (%)
|
2.0
|
2.2
|
2.4
|
2.5
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ROAE (%)
|
13.5
|
14.8
|
13.7
|
12.6
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ROAA (%)
|
6.2
|
6.2
|
5.6
|
5.5
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EV/EBITDA (x)
|
5.7
|
6.8
|
6.4
|
6.1
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Net debt/equity (%)
|
33.3
|
32.6
|
32.9
|
26.5
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Share
Price:
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MYR6.50
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Target
Price:
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MYR7.20
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Recommendation:
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Buy
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Headed the right
path
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3Q16 core net income was MYR18.6m (+201% YoY) after
adjusting for deferred tax. This was slightly ahead of our expectation
and is on track to meet our full year 2016 earning forecast. Outlook is
looking more positive, buoyed by strong passenger demand and airlines
adding more capacity. Maintain BUY, with no change to our DCF-based TP
of MYR7.20.
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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
|
3,343.7
|
3,871.0
|
4,204.4
|
4,506.7
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EBITDA
|
815.4
|
1,342.0
|
1,505.0
|
1,623.8
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Core net profit
|
146.5
|
(118.0)
|
39.4
|
136.7
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Core EPS (sen)
|
10.9
|
(7.4)
|
2.4
|
8.2
|
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Core EPS growth (%)
|
(62.9)
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nm
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nm
|
247.0
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Net DPS (sen)
|
10.4
|
0.9
|
3.4
|
8.3
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Core P/E (x)
|
59.7
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nm
|
273.7
|
78.9
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P/BV (x)
|
1.2
|
1.2
|
1.2
|
1.3
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Net dividend yield (%)
|
1.6
|
0.1
|
0.5
|
1.3
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ROAE (%)
|
na
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na
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na
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na
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ROAA (%)
|
0.9
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(0.5)
|
0.2
|
0.7
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EV/EBITDA (x)
|
15.8
|
10.1
|
10.1
|
9.0
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Net debt/equity (%)
|
58.6
|
52.2
|
51.3
|
44.8
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Share
Price:
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MYR0.88
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Target
Price:
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MYR1.16
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Recommendation:
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Buy
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Secures charter
for Naga 8
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Clinching a rig charter contract from Hess, its 2nd
charter win year to-date in this challenging environment is
commendable. This contract may not be enough to pull UMWOG out from the
red but UMWOG will be cashflow positive. Optimising rigs utilisation over
DCR is a key priority for 2016-17. We opine that the worst is over.
Much of the tough operating and financial outlook over the next 12
months has been reflected in the share price. Hence, our contrarian
Trading BUY call.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
|
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
|
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Core net profit
|
251.8
|
(7.5)
|
(277.8)
|
(215.1)
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Core EPS (sen)
|
11.6
|
(0.3)
|
(12.8)
|
(9.9)
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Core EPS growth (%)
|
51.4
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nm
|
nm
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nm
|
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Net DPS (sen)
|
100.0
|
0.0
|
0.0
|
0.0
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Core P/E (x)
|
7.5
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nm
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nm
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nm
|
|
P/BV (x)
|
0.6
|
0.6
|
0.6
|
0.7
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Net dividend yield (%)
|
114.3
|
0.0
|
0.0
|
0.0
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ROAE (%)
|
8.4
|
(11.3)
|
(8.7)
|
(7.3)
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ROAA (%)
|
5.2
|
(0.1)
|
(3.8)
|
(3.2)
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EV/EBITDA (x)
|
15.0
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nm
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nm
|
104.5
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Net debt/equity (%)
|
33.6
|
90.6
|
99.7
|
109.8
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Share
Price:
|
MYR1.02
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Target
Price:
|
MYR0.90
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Recommendation:
|
Sell
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Tough and
challenging
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9M16 results were in line, on continued weaker QoQ
earnings trend. Orderbook replenishment is a challenge in a capex
deprived environment. Earnings visibility is poor and cash is
depleting. An asset impairment exercise is not discounted given the low
yard utilisation. MMHE is not a privatisation candidate, in our view.
Our MYR0.90 TP is pegged to 1x EV/order backlog. MMHE needs a
significant order win to warrant a re-rating, in our view.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
2,700.5
|
2,459.0
|
1,298.6
|
1,003.1
|
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EBITDA
|
248.2
|
157.9
|
88.4
|
84.0
|
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Core net profit
|
173.1
|
93.3
|
41.8
|
36.8
|
|
Core EPS (sen)
|
10.8
|
5.8
|
2.6
|
2.3
|
|
Core EPS growth (%)
|
(26.8)
|
(46.1)
|
(55.2)
|
(12.1)
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Net DPS (sen)
|
0.0
|
0.0
|
0.0
|
0.0
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Core P/E (x)
|
9.4
|
17.5
|
39.0
|
44.4
|
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P/BV (x)
|
0.6
|
0.6
|
0.6
|
0.6
|
|
Net dividend yield (%)
|
0.0
|
0.0
|
0.0
|
0.0
|
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ROAE (%)
|
5.0
|
1.7
|
1.6
|
1.3
|
|
ROAA (%)
|
3.6
|
2.1
|
1.1
|
1.0
|
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EV/EBITDA (x)
|
10.2
|
4.8
|
9.3
|
9.7
|
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Share
Price:
|
MYR1.74
|
|
Target
Price:
|
MYR1.80
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Recommendation:
|
Hold
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3Q16: A flattish
quarter
|
|
3Q16 results were within our expectations but below
consensus’. PavREIT’s revenue was lifted by new assets’ contributions
but was mainly offset by steeper interest costs leading to a flattish
bottomline. We trim our FY16-18 net profit forecasts by <3% p.a.
post our key assumption revisions. Consequently, our new DDM-based TP
is MYR1.80 (-5sen; cost of equity: 7.5%).
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
402.1
|
413.9
|
462.6
|
545.3
|
|
Net property income
|
282.7
|
291.5
|
318.5
|
375.8
|
|
Distributable income
|
239.9
|
248.9
|
246.2
|
267.6
|
|
DPU (sen)
|
7.2
|
7.4
|
7.3
|
8.0
|
|
DPU growth (%)
|
8.1
|
3.1
|
(0.5)
|
8.7
|
|
Price/DPU(x)
|
24.3
|
23.6
|
23.7
|
21.8
|
|
P/BV (x)
|
1.4
|
1.4
|
1.1
|
1.1
|
|
DPU yield (%)
|
4.1
|
4.2
|
4.2
|
4.6
|
|
ROAE (%)
|
6.3
|
6.3
|
5.7
|
5.7
|
|
ROAA (%)
|
5.2
|
5.1
|
4.4
|
4.0
|
|
Debt/Assets (x)
|
0.2
|
0.2
|
0.2
|
0.3
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR1.77
|
|
Target
Price:
|
MYR1.80
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
1QFY17: A good
start
|
|
1QFY6/17 results and first interim gross DPU of 2.27sen
were in line whereby earnings growth was mainly contributed by
improvement at the retail segment. Our earnings forecasts and DDM-based
TP of MYR1.80 (cost of equity: 7.8%) are intact.
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|
FYE Jun (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
453.5
|
507.0
|
522.6
|
562.7
|
|
Net property income
|
340.8
|
373.9
|
395.8
|
428.1
|
|
Distributable income
|
256.6
|
270.6
|
268.6
|
296.0
|
|
DPU (sen)
|
7.8
|
8.3
|
8.2
|
9.0
|
|
DPU growth (%)
|
4.3
|
5.2
|
(1.0)
|
9.7
|
|
Price/DPU(x)
|
22.6
|
21.4
|
21.6
|
19.7
|
|
P/BV (x)
|
1.3
|
1.3
|
1.3
|
1.3
|
|
DPU yield (%)
|
4.4
|
4.7
|
4.6
|
5.1
|
|
ROAE (%)
|
14.1
|
8.1
|
6.7
|
7.4
|
|
ROAA (%)
|
4.0
|
4.0
|
4.1
|
4.4
|
|
Debt/Assets (x)
|
0.3
|
0.3
|
0.3
|
0.4
|
|
|
|
|
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SECTOR RESEARCH
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Sector Note
by Thong
Jung Liaw
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Saudi Aramco taking a 50% stake in PETRONAS’ RAPID
project for USD21b would be a major positive. For PETRONAS, this
means: (i) the ability to realise value from its RAPID investment,
(ii) new capital can be deployed to other capex programs (i.e.
upstream E&P), that has been affected by the cyclical downturn
and (iii) PETRONAS’s commitment & ability to pay dividends to the
Government will remain intact. Our key BUYs in the sector are Yinson
(TP: MYR4.35), Icon (TP: MYR0.42) and KNM (TP: MYR 0.80)
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NEWS
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Outside Malaysia:
U.S: Orders for capital goods in September decline by most
since February, indicating corporate investment is having trouble gaining
traction. Bookings for non-military capital goods excluding aircraft
dropped 1.2%, erasing a 1.2% August gain that was stronger than
previously reported, Commerce Department data showed. Demand for all
durable goods eased 0.1%. (Source: Bloomberg)
U.K: Economy grew faster than forecast in 3Q 2016 with
services single-handedly ensuring resilience against any Brexit fallout.
The 0.5% expansion was better than the 0.3% median forecast of economists
in a Bloomberg survey. Services surged 0.8%, offsetting declines in
construction and production, its performance helped by box-office
receipts for summer movies including Jason Bourne and Star Trek. (Source:
Bloomberg)
Spain: Unemployment rate falls to more than six-year low,
led by a surge in services jobs as Acting Prime Minister Mariano Rajoy
moves closer to forming a government after a 10-month political deadlock.
The jobless rate dropped to 18.9% in the three months through September,
the National Statistics Institute said in Madrid. That’s down from 20% in
the second quarter. The number of Spaniards out of work fell to 4.3
million total for the quarter compared to a crisis record of 6 million in
2013. (Source: Bloomberg)
China: Profits of industrial corporations slowed from a
three-year high, signaling stabilization in manufacturing remains
fragile. Industrial profits rose 7.7% YoY in September to CNY 577.1b (USD
85b), the National Bureau of Statistics said. That follows a jump of
19.5% YoY in August that was the biggest in three years. (Source:
Bloomberg)
S. Korea: November manufacturers’ confidence falls to 72
following the 75 recorded a month earlier, according to Bank of Korea
statement. Proportion of companies surveyed complaining about weak
domestic demand rises to 26.5% from 26.3% in last survey. Confidence
index for non-manufacturers for November falls to 73 from 75. Results
based on survey conducted October 14-21, with responses from 1,702
manufacturers and 1,082 non-manufacturers. (Source: Bloomberg)
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Other News:
SP Setia: Plans MYR3b projects. SP Setia plans to launch
MYR3b worth of properties on the island over the next 10 years. The
company had undeveloped landbank of 56.6ha on the eastern side of the
island, Tanjung Bungah, Jelutong, Teluk Kumbar, and Balik Pulau. SP Setia
expects to launch at least one project per year. There will be a mixture
of high-rise and landed properties planned for our future launches.
(Source: The Star)
IGB Corp: IGB, Southkey City to raise MYR1b for JB mall.
The JV company Southkey Megamall Sdn Bhd will issue medium-term notes of
up to MYR1b for the fund raising exercise. Hong Leong Investment Bank
(HLIB) and Maybank Investment Bank (Maybank IB) have been appointed as
joint principal advisers, as well as HLIB, Maybank IB and RHB Investment
Bank as joint lead arrangers and managers for the medium-term notes
programme. The shopping mall forms part of the larger MYR6b integrated
mixed use development by Southkey Megamall which will comprise three
hotels, four office towers and one serviced apartment. (Source: The Sun
Daily)
Perisai Petroleum. Served with winding up petition.
Perisai Petroleum Teknologi has been served with a winding up petition on
its failure to make payment for its bonds. The claimant Ravi Murarka is a
holder of SGD15m out of the SGD125m 6.9% fixed rate bonds, which Perisai
had defaulted on. The due date of the bonds was on October 3. Its
51%-owned subsidiary SJR Marine (L) Ltd yesterday received a notice dated
27 October 2016 from the solicitors for OCBC Al-Amin Bank on the default
of a financing facility granted to SJR. SJR is required to make a
repayment of the sum of USD20.54m (MYR85.3m) within 14 days from the
notice date. (Source: The Sun Daily)
TH Heavy Engineering: Signs JV with Destini to execute
MMEA contract. TH Heavy Engineering (THHE) signed a JV agreement with
Destini yesterday, to execute a shipbuilding project to construct and
supply three units of Offshore Patrol Vessels (OPV) awarded by the
Malaysian Maritime Enforcement Agency (MMEA). It will seek written
approval of the Ministry of Finance and/or any other relevant agencies
for the award of the contract detailed in a Letter of Intent received by
THHE on July 27. The value of the contract was not disclosed. The
construction of the three units of OPV is estimated to take three and a
half years to be completed. The Offshore Patrol Vessels are 80-metres
long and will be the largest vessels amongst the MMEA fleet. (Source: The
Sun Daily)
Sasbadi: Gets MYR 3.8m deal to supply Lego Education sets
to schools. Sasbadi Holdings will supply Lego Education robotics sets to
primary and secondary schools in Malaysia for the expansion of the
robotics programme. Its unit Sasbadi Sdn Bhd had received a MYR3.85m
contract from the Education Ministry. The contract is for the period from
Oct 26 to Dec 31, 2016. (Source: The Star)
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