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Share
Price:
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MYR4.92
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Target
Price:
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MYR4.90
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Recommendation:
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Hold
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Slight tax drag
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FY16 results were in-line, albeit at the low end of
expectations, as net profit took a slight hit from an unexpected MYR35m
tax charge. Maintain HOLD with an unchanged TP of MYR4.90. Relative to
peers, Digi has the least operational concerns, in our view.
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FYE Dec (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
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6,914.0
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6,597.1
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6,745.0
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6,918.8
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EBITDA
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2,982.3
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2,954.9
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2,967.8
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3,044.3
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Core net profit
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1,722.6
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1,632.7
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1,616.9
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1,637.8
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Core EPS (sen)
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22.2
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21.0
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20.8
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21.1
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Core EPS growth (%)
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(15.2)
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(5.2)
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(1.0)
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1.3
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Net DPS (sen)
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22.0
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20.9
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20.8
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21.1
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Core P/E (x)
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22.2
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23.4
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23.7
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23.4
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P/BV (x)
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73.7
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73.7
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73.7
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73.7
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Net dividend yield (%)
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4.5
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4.2
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4.2
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4.3
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ROAE (%)
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285.8
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314.4
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311.4
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315.4
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ROAA (%)
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38.4
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32.1
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29.0
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28.8
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EV/EBITDA (x)
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14.4
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13.4
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13.6
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13.2
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Net debt/equity (%)
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204.2
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366.9
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384.8
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396.1
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Chi Wei Tan
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Syairah Malek
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NEWS
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Outside Malaysia:
U.S: Trump revamps trade focus in pull out of pacific
deal. With the stroke of a pen, President Donald Trump abruptly ended the
decades-old U.S. tilt toward free trade by signing an executive order to
withdraw from an Asia-Pacific accord that had been promoted by companies
including Nike Inc. and Wal-Mart Stores Inc. as well as family farmers
and ranchers. “Great thing for the American worker, what we just did,”
Trump said after signing an order withdrawing the U.S. from the
Trans-Pacific Partnership accord with 11 other nations. He didn’t take
any step to initiate a renegotiation of the Nafta deal with Mexico and
Canada, but an aide, who spoke on condition of anonymity, said action on
the accord is still in the works. “We’ve been talking about this a long time,”
Trump said. (Source: Bloomberg)
EU: Euro-area government debt declined to the lowest level
in almost four years amid mounting signs that the economic recovery is
gaining traction. The ratio of debt to gross domestic product fell to
90.1% in the third quarter, the European Union’s statistics office said.
That compares with 91.5% a year earlier and 91.2% in the previous three
months and is the lowest level since the final quarter of 2012. (Source:
Bloomberg)
U.K: Industrial strategy seeks to pick winning areas for
the country. The U.K. government will pick winning areas in the economy
to champion as part of an industrial strategy aimed at boosting Britain’s
productivity as the country prepares to leave the European Union.
Announcing the long-promised plan, Prime Minister Theresa May said she
wanted to see “sector deals” to identify and address barriers to
expansion in different industries. The government also aims to target
areas where it thinks the U.K. could excel in the future, including
biotechnology, artificial intelligence, and mobile networking. Ministers
will hold a cabinet meeting in northwest England to emphasize their
desire to help parts of the country that have sometimes be left behind by
industrial shifts. (Source: Bloomberg)
U.K: Can only discuss trade, not negotiate deals, EU says.
The U.K. is allowed to discuss trade agreements with other countries as
long as it doesn’t formally negotiate with them before it leaves the
European Union, a spokesman for the bloc said. “There’s nothing in the
treaties that prohibits you from discussing trade,” European Commission
spokesman Margaritis Schinas told reporters in Brussels. But he
reiterated previous remarks that EU countries can’t hold official talks
on future deals while still a member. “It’s very clear that in order to
sign and have a bilateral agreement with third countries, the U.K. first
needs to reach a settlement with the EU,” Maltese Prime Minister Joseph
Muscat said in an interview. “This is rather clear, and I believe that
it’s also in the minds of the British negotiators.” (Source: Bloomberg)
Singapore: Consumer prices rose in December for the first
time in more than two years, adding to signs of recovery in the
city-state’s economy. CPI rose 0.2% YoY, compared with unchanged prices
in November. Core inflation, which excludes costs of accommodation and
private road transport, rose 1.2% YoY in December. Lower oil costs and
government measures to rein in property values have driven consumer
prices down in the trade-dependent economy since November 2014. (Source:
Bloomberg)
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Other News:
MyEG: Contract to register foreign workers extended till
year-end. MyEG contract to manage the registration of illegal foreign
workers under the rehiring programme has been extended until Dec 31,
2017. MyEG said it would be able to register all foreign workers except
those from Myanmar. The company said the project had no fixed value as it
depended on the number of illegal foreign workers successfully
registered. Recently the Immigration Department gave MyEG the mandate to
provide online renewal of temporary employment pass for foreign workers
for a period of five years, backdated to start from May 23, 2015.(Source:
The Star)
Aemulus: Buys Penang land, plans MYR25m investment. The
group plans to invest RM25m in research and development (R&D) over
the next three years following the purchase of a piece of land in the
Bayan Lepas industrial estate, Penang. Aemulus, which designs and
assemble automated test equipment and test and measurement instruments,
said on Monday it was buying 1.62 acres of land in the industrial park
for MYR9.93m. Aemulus plans to invest MYR25m for the next three years in
R&D in this project. The corporate office and design centre with
built-up area of 50,000 square feet are expected to be ready by December
2018. (Source: The Star)
NWP: Eyes property project in Melaka. Having successfully
diversified into construction business, the timber products company NWP
Holdings is venturing into property development too. And the loss making
company hope to see a turnaround in its current year results. The company
will venture into property development this year said chief executive
officer, Datuk Seri Nelson Kee Soon Ling. In November, NWP Builder S/B, a
wholly owned subsidiary of NWP, entered into a turnkey construction
agreement with Listari Marina S/B for construction of nine tower blocks
with 160 unit of serviced suites in Melaka for MYR22m. (Source: The Edge
Financial Daily)
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