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Share
Price:
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SGD1.08
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Target
Price:
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SGD1.25
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Recommendation:
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Buy
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Great start to
2017
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Although we lifted our estimates recently, 1Q17 core net
profit still outperformed our expectation. Trade receivables
impairments in 1Q17 was a record low and we gather that they may trend
even lower going forward. On another note, we lift our core net profit
estimates by 4-14% as GENS will redeem its SGD2.3b perpetual bonds in
Sep/Oct 2017. Our SGD1.25 TP based on 12x FY17E EV/EBITDA, its
eight-year mean, is unchanged as our EBITDA estimates were not lifted.
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FYE Dec (SGD 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
|
2,400.9
|
2,228.1
|
2,260.9
|
2,260.9
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EBITDA
|
812.3
|
779.0
|
1,027.0
|
1,030.7
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Core net profit
|
267.4
|
285.1
|
538.7
|
607.8
|
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Core FDEPS (cts)
|
2.2
|
2.4
|
4.4
|
5.0
|
|
Core FDEPS growth(%)
|
(42.2)
|
7.1
|
87.6
|
12.8
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Net DPS (cts)
|
1.5
|
3.0
|
3.0
|
3.0
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Core FD P/E (x)
|
48.8
|
45.6
|
24.3
|
21.5
|
|
P/BV (x)
|
1.8
|
1.8
|
1.7
|
1.7
|
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Net dividend yield (%)
|
1.4
|
2.8
|
2.8
|
2.8
|
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ROAE (%)
|
1.0
|
7.3
|
8.4
|
8.0
|
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ROAA (%)
|
2.2
|
2.4
|
5.2
|
6.7
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EV/EBITDA (x)
|
7.1
|
8.9
|
10.3
|
9.8
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
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Share
Price:
|
MYR5.80
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Target
Price:
|
MYR5.40
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Recommendation:
|
Hold
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Decision on
tribal casino by 19 Jun 2017
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The U.S. Department of Interior (DOI) will effectively
decide if construction of the First Light Resort & Casino (FLRC)
can proceed by 19 Jun 2017. If the outcome is unfavourable, our
SOP-based TP may be trimmed by MYR0.20/sh. If the outcome is favourable,
our SOP-TP may get a MYR0.14/sh lift. For now, our FY17/FY18/FY19
earnings estimates are little changed at -3%/+1%/+1% and our SOP-based
TP is tweaked +2% to MYR5.40 on housekeeping changes only.
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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
|
8,395.9
|
8,931.6
|
10,109.8
|
11,756.8
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EBITDA
|
2,013.1
|
2,388.4
|
2,769.1
|
3,383.4
|
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Core net profit
|
1,154.7
|
1,542.5
|
1,680.9
|
2,143.5
|
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Core FDEPS (sen)
|
20.4
|
27.2
|
29.5
|
37.6
|
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Core FDEPS growth(%)
|
(15.0)
|
33.6
|
8.6
|
27.5
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Net DPS (sen)
|
7.1
|
16.5
|
10.0
|
11.7
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Core FD P/E (x)
|
28.5
|
21.3
|
19.6
|
15.4
|
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P/BV (x)
|
1.7
|
1.7
|
1.6
|
1.5
|
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Net dividend yield (%)
|
1.2
|
2.8
|
1.7
|
2.0
|
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ROAE (%)
|
7.1
|
14.8
|
8.2
|
9.9
|
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ROAA (%)
|
4.8
|
5.6
|
5.7
|
6.8
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EV/EBITDA (x)
|
12.3
|
10.6
|
11.6
|
9.3
|
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Net debt/equity (%)
|
0.1
|
net cash
|
net cash
|
net cash
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Share
Price:
|
MYR0.28
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Target
Price:
|
MYR0.58
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Recommendation:
|
Buy
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Thai’s RE Phase
2 expansion underway
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KNM has successfully commissioned the Phase 1 operations
of its 200,000LPD bio-ethanol plant in Thailand and will expand its
capacity by another 150% (Phase 2) by 3Q19. This is a positive, as KNM
progressively transforms itself into a renewable energy (RE) play. Our
TP is unchanged, based on 0.4x EV/MYR1.3b backlog peg, offering a 107%
upside.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
1,641.3
|
1,646.8
|
1,646.9
|
1,721.5
|
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EBITDA
|
205.7
|
(160.8)
|
150.9
|
176.5
|
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Core net profit
|
45.7
|
(262.3)
|
49.7
|
70.5
|
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Core EPS (sen)
|
2.4
|
(12.3)
|
2.3
|
3.3
|
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Core EPS growth (%)
|
3.4
|
nm
|
nm
|
41.8
|
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Net DPS (sen)
|
0.0
|
0.0
|
0.0
|
0.0
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Core P/E (x)
|
11.5
|
nm
|
12.0
|
8.5
|
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P/BV (x)
|
0.2
|
0.2
|
0.2
|
0.2
|
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Net dividend yield (%)
|
0.0
|
0.0
|
0.0
|
0.0
|
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ROAE (%)
|
2.0
|
(12.2)
|
2.1
|
2.9
|
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ROAA (%)
|
1.1
|
(5.8)
|
1.1
|
1.5
|
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EV/EBITDA (x)
|
7.1
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nm
|
9.5
|
7.7
|
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Net debt/equity (%)
|
19.2
|
37.4
|
34.6
|
30.8
|
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Share
Price:
|
MYR2.50
|
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Target
Price:
|
MYR2.20
|
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Recommendation:
|
Hold
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Unlocking value
in CITN
|
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STAR is disposing its 53% stake in CITN for MYR360m cash.
We are confident in STAR’s capability to sustain annual DPS at 15sen
despite >100% DPR. Our earnings estimate are trimmed by 5%-7% as we
deconsolidate CITN’s earnings but tempered by higher interest income.
As the disposal price of SGD0.90/CITN shr is slightly lower than our
previously ascribed share price of SGD0.92/ CITN shr, we keep our
MYR2.20 SOP-TP. Maintain HOLD with total negative return of 6%
including our 15sen FY17 DPS estimate
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
1,019.0
|
932.1
|
1,007.8
|
937.1
|
|
EBITDA
|
206.2
|
162.1
|
165.1
|
161.4
|
|
Core net profit
|
131.9
|
69.9
|
78.1
|
81.2
|
|
Core EPS (sen)
|
17.9
|
9.5
|
10.6
|
11.0
|
|
Core EPS growth (%)
|
(12.9)
|
(47.0)
|
11.6
|
4.1
|
|
Net DPS (sen)
|
18.0
|
18.0
|
15.0
|
15.0
|
|
Core P/E (x)
|
14.0
|
26.4
|
23.6
|
22.7
|
|
P/BV (x)
|
1.6
|
1.6
|
1.4
|
1.4
|
|
Net dividend yield (%)
|
7.2
|
7.2
|
6.0
|
6.0
|
|
ROAE (%)
|
11.6
|
9.7
|
24.0
|
6.3
|
|
ROAA (%)
|
7.8
|
4.1
|
4.5
|
4.7
|
|
EV/EBITDA (x)
|
6.9
|
9.0
|
8.0
|
8.3
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
Jade Tam
|
|
|
|
Samuel Yin Shao
Yang
|
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MACRO RESEARCH
|
|
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|
OPR unchanged, “neutral” MPS
by
Suhaimi Ilias
|
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BNM kept the Overnight Policy Rate (OPR) at 3.00% at
its MPC meeting on 12 May 2017. The tone of the accompanying Monetary
Policy Statement (MPS) remained “neutral”. No change in our view of
OPR staying at 3.00% this year.
|
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Suhaimi Ilias
|
|
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|
Zamros
Dzulkafli
|
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Technically attractive ASEAN Small & Mid Cap
stocks
by Nik
Ihsan Raja Abdullah
|
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We use MSCI ASEAN Index (MXSO Index) to understand the
current trend of major equity markets in the Southeast Asia. Based on
weekly Heikin-Ashi chart, MXSO Index is still hovering in an uptrend
channel. The rebound from 61.8% Fibonacci Retracement in Dec 2016
further lifted the index above the 'Ichimoku Cloud'.
|
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Nik Ihsan Raja
Abdullah
|
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|
Tee Sze Chiah
|
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NEWS
|
|
|
Outside Malaysia:
China: Credit growth exceeds estimates despite regulatory
curbs. China’s broadest measure of new credit exceeded estimates in April
even as regulators push to clamp down on financial leverage and curb the
nation’s debt pile. Aggregate financing expanded CNY 1.39tr (USD 201b),
the People’s Bank of China said, versus an increase of CNY 2.12tr in
March. New yuan loans rose to CNY 1.1tr. The broad M2 money supply
increased 10.5 % YoY, less than the 10.8% YoY forecast. (Source:
Bloomberg)
China: Xi opens globalization forum with USD 78b pledge.
President Xi Jinping laid the framework for Chinese-style globalization
and his ambition to lead it during a speech inaugurating his cornerstone
diplomatic trade initiative for a new Silk Road. Grounding the plan in
China’s history, Xi described the Belt and Road Initiative as a
"project of the century" that had its inspiration in the
ancient trade routes linking the country with the world. He pledged an
additional CNY 100b (USD 14.5b) for China’s Silk Road Fund, CNY 380b in
new lending for participating nations, and CNY 60b in coming years to
developing countries and international organizations that join the
program. (Source: Bloomberg)
Crude Oil: Halts gains as more U.S. rigs counter OPEC cut
deal report. U.S. rigs targeting crude rose a 17th week, countering a
report that OPEC and other major producers reached an initial agreement
to extend output cuts. The Organization of Petroleum Exporting Countries
and other major producers have reached a preliminary agreement to extend
limits on output, state-run Kuwait News Agency reported, citing Oman’s
Oil Minister Mohammed Al Rumhy. U.S. drillers added nine rigs targeting
crude bringing the total to 712, the most since April 2015, Baker Hughes
Inc. said. Brent for July was USD 50.76/bbl. (Source: Bloomberg)
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Other News:
AirAsia: AirAsia, Everbright JV to establish LCC in China.
The group has signed a memorandum of understanding (MoU) with China
Everbright Group and Henan Government Working Group to establish a
low-cost carrier (LCC) based in Zhengzhou, the capital of Henan province
in central China. Zhengzhou was chosen as a base due to its strategic
location and importance as a logistics hub. As China's gateway to Europe,
Zhengzhou sits at the centre of a vast rail, highway and air transport
network that forms the lynchpin of China's development plans for its
central and western regions. (Source: The Sun Daily)
Ancom: Teams up with 3 foreign firms to bid for MRT
Jakarta works. Its indirect wholly-owned subsidiary Puncak Berlian S/B
has entered into a preliminary agreement with PT Alternatif Media Group,
PT Avabanindo Perkasa and Thailand-listed VGI Global Media PCL to set up
a consortium to bid for the tender. The consortium members will jointly
prepare the request for proposal or any other similar document required
by MRT Jakarta, in order to become a participant of the project tender.
(Source: The edge Financial Daily)
TNB: Completes 50% acquisition of Vortex Solar. Tenaga
Nasional has completed the acquisition of a 50% interest in Vortex Solar
Investments S.a.r.l. for the acquisition of an operational 365MW solar PV
portfolio in the United Kingdom via Vortex Solar UK Limited. The
acquisition, with an enterprise value of circa GBP470m, achieves a key
objective of TNB’s five-year international expansion plan to acquire up to
250 MW capacity of renewable energy projects by 2020. TNB funded the
acquisition through a USD750m sukuk proceeds issued by the company in
October last year. (Source: The Star)
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