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Share
Price:
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MYR4.21
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Target
Price:
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MYR4.40
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Recommendation:
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Hold
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Watching THE
Alliance closely
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Westports continued to outperform in 4Q16 with robust
volume growth (+9% YoY). While CMA CGM will be moving a substantial
volume out, there could be mitigating factors coming from incremental
volume from: (i) ad hoc activities; (ii) other Ocean Alliance members
(ex-CMA CGM); and (iii) in the event that the THE Alliance picks
Westports as its South East Asia hub. Maintain HOLD and DCF-derived TP
of MYR4.40 (WACC: 6.7%; 2025-54 growth rate: 2%), pending the outcome
from the THE Alliance.
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FYE Dec (MYR m)
|
FY14A
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FY15A
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FY16E
|
FY17E
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Revenue
|
1,503.0
|
1,578.3
|
1,748.7
|
1,812.3
|
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EBITDA
|
800.8
|
869.1
|
984.1
|
1,050.9
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Core net profit
|
512.2
|
504.9
|
625.9
|
649.1
|
|
Core EPS (sen)
|
15.0
|
14.8
|
18.4
|
19.0
|
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Core EPS growth (%)
|
17.7
|
(1.4)
|
24.0
|
3.7
|
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Net DPS (sen)
|
11.3
|
11.1
|
13.8
|
14.3
|
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Core P/E (x)
|
28.0
|
28.4
|
22.9
|
22.1
|
|
P/BV (x)
|
8.1
|
7.6
|
7.0
|
6.5
|
|
Net dividend yield (%)
|
2.7
|
2.6
|
3.3
|
3.4
|
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ROAE (%)
|
30.4
|
27.6
|
31.7
|
30.4
|
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ROAA (%)
|
13.8
|
12.8
|
15.0
|
14.9
|
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EV/EBITDA (x)
|
15.2
|
17.0
|
15.8
|
14.8
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Net debt/equity (%)
|
40.0
|
39.7
|
59.4
|
52.2
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Share
Price:
|
MYR10.30
|
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Target
Price:
|
MYR12.80
|
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Recommendation:
|
Buy
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Regional banca
with Stanchart
|
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Allianz SE’s regional general insurance banca agreement
with Standard Chartered Bank (Stanchart) is long-term positive for its
Malaysian operations, Allianz (M), filling in a void that will be left
by the termination of the current banca agreement with CIMB. In the
immediate term though, we do not expect any contributions to be
material to Allianz (M). We maintain our BUY call and SOP-TP of
MYR12.80.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
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Net earned premiums
|
3,254.3
|
3,504.3
|
3,616.5
|
3,695.3
|
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Core profit (MYR m)
|
295.9
|
308.9
|
302.7
|
317.5
|
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BVPS (MYR)
|
6.6
|
7.6
|
8.4
|
9.5
|
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P/B (x)
|
1.6
|
1.4
|
1.2
|
1.1
|
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EVPS (MYR)
|
na
|
na
|
na
|
na
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PEV (x)
|
na
|
na
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na
|
na
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VNB (MYR)
|
na
|
na
|
na
|
na
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VNB multiple (x)
|
na
|
na
|
na
|
na
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ROE (%)
|
na
|
na
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na
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na
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ROA (%)
|
0.0
|
0.0
|
0.0
|
0.0
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Share
Price:
|
MYR1.65
|
|
Target
Price:
|
MYR1.70
|
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Recommendation:
|
Hold
|
|
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|
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Growth plans are
intact
|
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Post analyst briefing, we remain positive on Axis’ active
acquisition strategy which focuses on industrial assets. We, however,
believe its vacant office space would remain a near-term challenge. We
nudge up FY17-19 earnings by 0.5-2%, our DDM-TP of MYR1.70 is unchanged
(cost of equity: 7.8%).
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
165.7
|
171.3
|
178.7
|
193.8
|
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Net property income
|
141.9
|
144.3
|
152.4
|
165.5
|
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Distributable income
|
91.5
|
90.2
|
99.2
|
102.2
|
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DPU (sen)
|
7.6
|
7.4
|
8.1
|
8.3
|
|
DPU growth (%)
|
(14.9)
|
(1.8)
|
8.8
|
3.0
|
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Price/DPU(x)
|
21.8
|
22.2
|
20.4
|
19.8
|
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P/BV (x)
|
1.3
|
1.3
|
1.3
|
1.3
|
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DPU yield (%)
|
4.6
|
4.5
|
4.9
|
5.0
|
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ROAE (%)
|
7.2
|
8.9
|
7.1
|
7.3
|
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ROAA (%)
|
4.3
|
4.1
|
4.4
|
4.3
|
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Debt/Assets (x)
|
0.3
|
0.3
|
0.3
|
0.4
|
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Share
Price:
|
MYR1.82
|
|
Target
Price:
|
MYR1.75
|
|
Recommendation:
|
Hold
|
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4Q16: A
temporary setback
|
|
4Q16 results were within our expectations as we had
already anticipated a weaker quarter due to a major but temporary
tenants repositioning exercise at Pavilion Mall. PavREIT has also
declared a final gross DPU of 4.1sen, bringing FY16 gross DPU to 8.2sen
– in line. We lower our FY17-18 earnings forecasts by 1-8% and DDM-TP
to MYR1.75 (-5sen; cost of equity: 7.5%) after revising our Pavilion
Mall and Pavilion Elite assumptions.
|
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
413.9
|
459.7
|
519.6
|
574.3
|
|
Net property income
|
291.5
|
314.8
|
356.3
|
393.0
|
|
Distributable income
|
248.9
|
248.8
|
247.5
|
264.3
|
|
DPU (sen)
|
7.4
|
7.4
|
7.4
|
7.9
|
|
DPU growth (%)
|
3.1
|
0.5
|
(0.5)
|
6.8
|
|
Price/DPU(x)
|
24.7
|
24.5
|
24.7
|
23.1
|
|
P/BV (x)
|
1.4
|
1.4
|
1.3
|
1.3
|
|
DPU yield (%)
|
4.1
|
4.1
|
4.1
|
4.3
|
|
ROAE (%)
|
6.3
|
6.1
|
6.2
|
6.3
|
|
ROAA (%)
|
5.1
|
4.5
|
4.1
|
4.0
|
|
Debt/Assets (x)
|
0.2
|
0.3
|
0.3
|
0.3
|
|
|
|
|
|
|
|
|
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|
SECTOR RESEARCH
|
|
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KL-Klang BRT is a go!
by Chew
Hann Wong
|
|
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The Land Public Transport Commission (SPAD) has
initiated bids from interested parties to implement the Kuala lumpur
- Klang Bus Rapid Transit (KL-Klang BRT). We believe Sunway
Construction Group (SCGB MK; Buy) is in the driving seat as a
potential beneficiary due to its previous experience with the
construction of the 5.5km Bandar Sunway BRT Line which was launched
in June 2015. Maintain POSITIVE on the construction sector with
Gamuda and SCGB as our sector Top BUYs.
|
|
|
|
|
|
Chew Hann Wong
|
|
|
|
Adrian Wong
|
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|
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Clouds have not cleared
by Ivan
Yap
|
|
|
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|
|
|
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2016 TIV sales dropped 13% YoY to 580.1k units (worst
YoY contraction in the last 15 years) and were within expectations at
101% of our forecast. Looking ahead, we expect TIV to see a 5% YoY
recovery in 2017, fuelled by a full-year contribution of mass-market
launches and new model launches ahead. Nonetheless, we also caution
that auto profitability would likely remain suppressed with pressure
points coming from a weak MYR and lower ASPs due to down-trading by
consumers. Maintain NEUTRAL.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACRO RESEARCH
|
|
|
|
|
|
|
|
OPR stays, biased on growth
by
Suhaimi Ilias
|
|
|
|
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|
|
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|
|
BNM kept the Overnight Policy Rate (OPR) at 3.00% at
the first MPC meeting for the year, while the Statutory Reserve
Requirement (SRR) was also maintained at 3.50%. We maintain the view
that OPR to stay at 3.00% in 2017.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
|
|
|
|
|
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|
|
|
|
NEWS
|
|
|
Outside Malaysia:
U.S: The cost of living in the U.S. climbed for a fifth
month on the back of shelter and fuel prices, pushing inflation closer to
the Federal Reserve’s goal. The consumer-price index rose 0.3% in
December, matching the median projection of economists, after a 0.2% gain
the previous month, Labor Department figures showed. Prices were up 2.1%
from a year earlier, the most since June 2014. Excluding volatile food
and fuel, the so-called core measure rose 0.2% from November. With energy
moving higher and rents and medical costs continuing to firm up, price
pressures are gaining traction in the world’s largest economy. (Source:
Bloomberg)
U.S: Factory output rose less than forecast in December,
held back by less production of textiles and chemicals, indicating U.S.
manufacturing will take time to recover. Production at factories, which
makes up 75% of all output, climbed 0.2% after a 0.1% decrease in
November, a Federal Reserve showed. Total industrial output, which
includes mines and utilities, rose a larger-than-estimated 0.8% as
temperatures returned to normal. (Source: Bloomberg)
E.U: The European Central Bank left its
quantitative-easing program unchanged as policy makers wait to see if a
pickup in inflation will be sustained. The Governing Council reaffirmed
its December decision that asset purchases will be reduced to EUR 60b
(USD 64b) a month from April, from EUR 80b currently. Policy makers also
kept the main refinancing rate at zero and the deposit rate at minus
0.4%. (Source: Bloomberg)
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|
|
Other News:
Destini: THHE, Destini bag MYR739m deal to supply offshore
vessels to MMEA. THHE Destini S/B, a 51:49 joint venture (JV) between
Destini and TH Heavy Engineering (THHE), has clinched a MYR738.9m
contract to supply three offshore patrol vessels for the Malaysian
Maritime Enforcement Agency.THHE Destini will supply, test and commission
the 83-metre vessels, complete with fittings and accessories, under the
42-month contract.THHE said the deal was expected to contribute
positively to its earnings and net assets per share for the financial
years ending Dec 31, 2017 through 2020.(Source: The Star)
MMC: Disposes MMC Oil & Gas Engineering for MYR50m.The
group is selling its 100% beneficial interest in MMC Oil & Gas
Engineering S/B, an engineering design consultancy licensed by Petroliam
Nasional, for MYR50m cash to Melati Pertiwi S/B. The proposed disposal
will enable the MMC group to streamline its business operations and focus
on the core businesses, namely ports and logistics, energy and utilities,
and engineering and construction. The group is expected to make a one-off
gain of MYR16.5m from the proposed. The proposed disposal is expected to
be completed by the first half of this year.(Source: The Star)
Ekovest: Construction order book rises to MYR1.3b. The group
construction order book had increased to about MYR13b with the inclusion
of the Duta-Ulu Kelang Expressway (DUKE) phase 2A highway project it
announced last week. These projects will keep the group busy for five
years. On Tuesday Ekovest received approval in principle to undertake
DUKE Phase 2, which complements the existing DUKE and under construction
DUKE Phase 2 highways. Ekovest’s shareholders unanimously approved the
proposed disposal of the 40% equity interest held in Konsortium Lebuhraya
Utara-Timur S/B (Kesturi) to the Employees Provident Fund Board for a
total cash consideration of MYR1.13b and the proposed share split in the
company during the Extraordinary General Meeting held yesterday.(Source:
The Edge Financial Daily)
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