Tuesday, February 7, 2017

AWC: Wins RM14.6m Putrajaya jobs. Its wholly-owned subsidiary M&C Engineering and Trading S/B (M&C) has been appointed subcontractor by Sunway Construction S/B for MYR14.64m worth of jobs for the government office buildings in Putrajaya. AWC said M&C has been awarded two packages, which involved the supply, delivery, installation, testing, commissioning and maintenance of fire protection services for the project known as “Parcel F” in Precinct 1, Putrajaya. (Source: The Sun Daily)


FEATURE
CALLS

Malaysia | V.S. Industry
Dusting off the competition
Ivan Yap








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TRADERS' ALMANAC | FBMKLCI ROAR!
Tee Sze Chiah








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COMPANY RESEARCH





Initiation





V.S. Industry (VSI MK)
by Ivan Yap





Share Price:
MYR1.54
Target Price:
MYR1.78
Recommendation:
Buy




Dusting off the competition

VSI’s established status as a vertically integrated player is a testament of its capabilities as a one-stop shop contract manufacturer. Currently serving several growing world-renowned consumer electronics brands including a prominent global consumer electronics brand (Customer X) and an American single-serve coffee maker, Keurig, we expect stronger orders from these existing key clients to drive our projected 14% 3-year earnings CAGR. Initiate coverage on VSI with a BUY and MYR1.78 TP.



FYE Jul (MYR m)
FY15A
FY16A
FY17E
FY18E
Revenue
1,936.9
2,175.6
2,564.1
3,115.3
EBITDA
239.2
226.4
278.2
341.2
Core net profit
135.7
135.1
142.6
187.1
Core FDEPS (sen)
10.4
8.5
9.0
11.8
Core FDEPS growth(%)
111.8
(18.2)
5.6
31.3
Net DPS (sen)
4.8
4.7
4.1
5.0
Core FD P/E (x)
14.8
18.0
17.1
13.0
P/BV (x)
2.6
2.3
1.8
1.6
Net dividend yield (%)
3.1
3.1
2.7
3.3
ROAE (%)
20.4
14.2
14.0
14.4
ROAA (%)
8.0
7.0
6.9
8.2
EV/EBITDA (x)
8.5
9.2
8.7
7.2
Net debt/equity (%)
17.2
18.4
7.2
net cash







SECTOR RESEARCH






FBMKLCI ROAR!
by Tee Sze Chiah


Sector Note





FBMKLCI opened the week in the positive note after recorded a gain of 6.23pts to close at 1,691.24 yesterday. The charge was led by KLK (+2.69%), AXIATA (+2.63%) and PCHEM (+2.10%) with 17 index-linked stocks closed on positive note. Tracking intraday movement, buying interest in the benchmark index consistently increased throughout the day and cemented by last minutes push to close at the highest level. For today we expect another attempt to test previous high at 1,695 and ...









NEWS


Outside Malaysia:

E.U: Draghi rebuts Trump lines on currency wars, bank rules. Mario Draghi took the Trump administration to task, addressing recent assertions that Germany is a currency manipulator and warning against the rollback of post-crisis financial regulation. Speaking at a hearing in Brussels, the European Central Bank president responded to the charge by U.S. National Trade Council Director Peter Navarro and others that Germany is using a “grossly undervalued” euro to gain an unfair trade advantage. “The ECB has not intervened in the foreign exchange markets since 2011,” Draghi told European Union lawmakers, adding that Germany’s trade surplus was the result of productivity gains. “Germany has a significant bilateral trade surplus with the U.S., a material current account surplus, but it has not engaged in persistent one-sided intervention in the foreign exchange market.” (Source: Bloomberg)

U.K. Business says Brexit already having a negative effect. Brexit has already damaged businesses even before Prime Minister Theresa May triggers the start of Britain’s withdrawal from the European Union, according to a survey of the country’s largest companies. More than half – 58% -- of the top executives at Britain’s biggest firms that responded to the Ipsos MORI “Captains of Industry” poll said the vote to quit the bloc has had a negative impact on their businesses. Two-thirds of the chief executives, chairmen and directors interviewed for the survey said they believed the business situation would worsen in the next 12 months. (Source: Bloomberg)

Russia: Inflation decelerated more than forecast in January, dropping to the weakest pace since 2012, as consumer demand remained a drag on price pressure by lagging behind the broader economic recovery. Annual inflation eased for a seventh month, slowing to 5% YoY from 5.4% YoY in December, the Federal Statistics Service said. Prices increased 0.6% in the month. (Source: Bloomberg)





Other News:

Gadang: To buy land for MYR56m cash. Its indirect unit, Gadang Construction S/B, has entered into a sale and purchase agreement with Nusvista Development S/B to buy leasehold commercial land in Damansara Perdana in Petaling Jaya for MYR55.7m cash. It bought the 2.66 acres of land for investment due to its strategic location within Damansara Perdana, and since it is likely to appreciate in value. (Source: The Star)

Gabungan AQRS: Sells land for MYR55.69m. Its wholly owned subsidiary Nusvista Development S/B is selling its leasehold land in Mukim Sungai Buloh, Petaling Jaya for MYR55.69m cash. Nusvista yesterday signed a sale and purchase agreement with Gadang Construction S/B. It said the land measures 10,779 sq m, equivalent to 2.66 acres or 116,024.19 sq ft. At a price tag of MYR55.69m, this means that Gadang is buying the land at MYR479.99 per sqf. As at Dec 31, 2016, the land had a net book value of MYR38.58m. Gabungan AQRS expects the sale of the land to yield a gain of MYR11.69m net of tax. (Source: The Edge Financial Daily)

AWC: Wins RM14.6m Putrajaya jobs. Its wholly-owned subsidiary M&C Engineering and Trading S/B (M&C) has been appointed subcontractor by Sunway Construction S/B for MYR14.64m worth of jobs for the government office buildings in Putrajaya. AWC said M&C has been awarded two packages, which involved the supply, delivery, installation, testing, commissioning and maintenance of fire protection services for the project known as “Parcel F” in Precinct 1, Putrajaya. (Source: The Sun Daily)

Uzma: Bags Petronas Carigali contract. Its wholly-owned subsidiary Uzma EngineeringS/B was awarded the three-year contract, which commenced from Dec 1, 2016 till Nov 30, 2019. The contract has two extension options of one year each (3+1+1 years) for cased hole logging services across the Pan Malaysia area. This will enable Uzma’s wireline division, better known as uzmaWIRELINE, to pursue potential collaboration with other international companies, which will further strengthen its presence in Malaysia; particularly for electric wireline logging services. (Source: The Sun Daily)


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