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Share
Price:
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MYR4.09
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Target
Price:
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MYR3.80
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Recommendation:
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Hold
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Stepping up
competitiveness
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The recent share price strength (+7% in 1 month) could be
due to the positive 1H17 outlook. While we expect volume to be weaker
in 2H17 (UASC to move certain volume to PSA), Westports is endeavouring
to secure new volume at certain fast-growing trade lanes. We maintain
our EPS forecasts for now, which is based on volume growth assumption
of +2%/-5%/+5% for FY17-19. Maintain HOLD and DCF-derived TP of MYR3.80
(2025-54 growth rate: +2%, WACC: 6.7%).
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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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1,578.3
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1,804.3
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1,837.2
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1,820.0
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EBITDA
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869.1
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963.5
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967.7
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975.9
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Core net profit
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504.9
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616.6
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620.6
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526.8
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Core EPS (sen)
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14.8
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18.1
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18.2
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15.4
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Core EPS growth (%)
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(1.4)
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22.1
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0.7
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(15.1)
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Net DPS (sen)
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11.1
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14.0
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13.6
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11.6
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Core P/E (x)
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27.6
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22.6
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22.5
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26.5
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P/BV (x)
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7.3
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6.7
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6.3
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5.9
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Net dividend yield (%)
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2.7
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3.4
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3.3
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2.8
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ROAE (%)
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27.6
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32.1
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28.9
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23.0
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ROAA (%)
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12.8
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14.7
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13.6
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10.9
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EV/EBITDA (x)
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17.0
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16.0
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15.7
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15.5
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Net debt/equity (%)
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39.7
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35.3
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57.7
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48.4
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MACRO RESEARCH
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Slightly faster
by
Suhaimi Ilias
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China’s 1Q 2017 real GDP growth edged up +6.9% YoY (4Q
2016: +6.8% YoY), ahead of this year’s target of around +6.5%,
justifying the shift in policy from “managing growth” to “managing
risk” as reflected by increases in PBoC’s interest rates and new rounds
of property curbs. Revised our full-year growth forecasts to +6.7%
from +6.5% previously (2016: +6.7%).
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Suhaimi Ilias
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Zamros
Dzulkafli
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Steady YTD growth momentum
by
Suhaimi Ilias
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Growth in Overseas Filipino workers’ remittances
(OFWR) for Feb 2017 moderated to +3.4% YoY (Jan 2017: +8.6% YoY) but
growth momentum was intact in the first two months of 2017 at +5.9%
YoY (2016: +5.0%). The sustained expansion in global economic activities
in 1Q 2017 led by the major economies, rebound in world trade and
firmer crude oil prices and global trade should sustained growth in
OFWR.
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Suhaimi Ilias
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Zamros
Dzulkafli
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NEWS
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Outside Malaysia:
U.S: Homebuilder sentiment cools from almost 12-year high.
Confidence among U.S. home builders cooled in April after jumping a month
earlier to the highest level since mid-2005, according to data from the
National Association of Home Builders/Wells Fargo. Builder sentiment
eased to 68 in April from a reading of 71 in March that was the strongest
since June 2005. Measure of six-month sales outlook fell to 75 after a
reading of 78 that matched the highest since 2005. (Source: Bloomberg)
China: The value of home sales remained buoyant in March,
though volume figures indicated that curbs in a number of cities may be
slowing the recent buying frenzy. New home sales by value rose 18% to
CNY1t (USD 145b) last month from a year earlier, according to Bloomberg
calculations based on data released by the National Bureau of Statistics.
The increase compares with a 23% surge in the first two months of the
year. But the value of sales partly reflected surging home prices. By
volume, home sales grew only 11% in March to 130 million square meters,
according to Bloomberg calculations, below the 24% growth in the first
two months of 2017. (Source: Bloomberg)
China: Economy stormed back in the first quarter, clocking
its first back-to-back acceleration in seven years and bolstering the
global growth outlook just as signs of subdued consumer spending have
surfaced in the U.S. The Chinese economy accelerated to a
better-than-expected 6.9%, powered by strength in housing, infrastructure
investment, exports and retail sales. And it looks to have done so
without worsening credit risks, a welcome development for economists
worried about the nation’s towering debt burden. (Source: Bloomberg)
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Other News:
BTM Resources: Partners eye MYR435m power plant in
Malacca. The group plans to team up with two overseas partners to set up
a municipal waste-to-energy plant in Malacca with an estimated investment
cost of MYR435m. It had inked a memorandum of understanding with
Singapore-based China Western Power International Pte Ltd and China-based
Sichuan No. 2 Electric Power Construction Co to build the plant with a
minimum capacity of 1,000 tonnes per day. (Source: The Star)
Kelington: Bags MYR24.2m process piping job. Its
wholly-owned subsidiary Kelington Engineering (S) Pte Ltd was awarded a
USD7.67m (MYR24.2m) contract to provide works for a process piping
system. The works entail the provision of engineering, design,
procurement, installation, testing and commissioning of process piping
system in Singapore. The company expects to complete the contract by
December this year. (Source: The Edge Financial Daily)
Key Alliance: Bags MYR24.7m data centre deal. The group
has received a conditional letter of award from Avenue Escapade S/B for
the design, build and management of a data centre for MYR24.74m. The data
centre to be located at Persoft Tower in Persiaran Tropicana, Petaling
Jaya. A few years ago, approval was received for Persoft Tower to be
developed into one of MSC Malaysia Cybercentres. (Source: The Star)
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