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Share
Price:
|
MYR1.51
|
Target
Price:
|
MYR1.50
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Recommendation:
|
Hold
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A resolution
finally
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The successful conclusion to the land lease agreement
(LLA) negotiations and official PPA signing puts an end to the
uncertainty surrounding YTLP’s Malaysia plant. Our TP already reflects
the PPA extension, as we had merely assumed a deferment in start date
when the LLA impasse first began. Maintain HOLD with an unchanged TP of
MYR1.50.
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FYE Jun (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
Revenue
|
11,858.1
|
10,240.5
|
9,359.9
|
9,729.7
|
EBITDA
|
3,112.9
|
2,717.8
|
2,599.7
|
2,791.0
|
Core net profit
|
894.9
|
872.0
|
697.9
|
846.6
|
Core FDEPS (sen)
|
12.3
|
11.2
|
9.0
|
10.9
|
Core FDEPS growth(%)
|
(35.2)
|
(8.5)
|
(20.0)
|
21.3
|
Net DPS (sen)
|
10.0
|
10.0
|
10.0
|
10.0
|
Core FD P/E (x)
|
12.3
|
13.4
|
16.8
|
13.8
|
P/BV (x)
|
0.9
|
0.9
|
0.9
|
0.9
|
Net dividend yield (%)
|
6.6
|
6.6
|
6.6
|
6.6
|
ROAE (%)
|
8.4
|
8.8
|
5.6
|
6.8
|
ROAA (%)
|
2.1
|
2.0
|
1.6
|
2.0
|
EV/EBITDA (x)
|
8.7
|
9.3
|
10.3
|
9.8
|
Net debt/equity (%)
|
138.5
|
115.6
|
122.7
|
125.1
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Ta Ann (TAH MK)
by Chee
Ting Ong
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Share
Price:
|
MYR3.62
|
Target
Price:
|
MYR4.25
|
Recommendation:
|
Hold
|
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Negative
surprise on its timber
|
|
The proposal to raise Sarawak’s hill timber charges to
MYR50 per cu m (from 80sen) is negative on earnings. We keep our
earnings forecasts for Ta Ann for now pending further clarification
with management. But there is a 4-6% downside risk to our FY17-19 EPS
forecasts if the revised cess is implemented. Our TP, pegged onto
forward earnings, consequently has downside potential too. Maintain
HOLD.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
Revenue
|
1,048.3
|
1,147.1
|
997.7
|
1,048.0
|
EBITDA
|
328.2
|
277.6
|
277.6
|
313.6
|
Core net profit
|
177.3
|
121.6
|
125.9
|
138.1
|
Core EPS (sen)
|
39.9
|
27.3
|
28.3
|
31.0
|
Core EPS growth (%)
|
74.7
|
(31.4)
|
3.5
|
9.7
|
Net DPS (sen)
|
16.7
|
10.0
|
12.7
|
14.0
|
Core P/E (x)
|
9.1
|
13.2
|
12.8
|
11.7
|
P/BV (x)
|
1.4
|
1.3
|
1.2
|
1.1
|
Net dividend yield (%)
|
4.6
|
2.8
|
3.5
|
3.9
|
ROAE (%)
|
16.7
|
9.9
|
9.6
|
9.9
|
ROAA (%)
|
9.2
|
6.0
|
5.8
|
6.0
|
EV/EBITDA (x)
|
6.2
|
6.8
|
7.0
|
5.9
|
Net debt/equity (%)
|
11.2
|
5.5
|
20.5
|
11.0
|
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Chee Ting Ong
|
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Amirah Azmi
|
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Share
Price:
|
MYR3.10
|
Target
Price:
|
MYR3.20
|
Recommendation:
|
Hold
|
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No clear
read-through
|
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GMB’s results were in line, taking into account
seasonality. GMB’s spread seemingly trended below our MYR1.90/mmBTU
assumption, but we note spreads are volatile on a quarterly basis. Our
earnings forecasts and MYR3.20 TP are unchanged. With the share price
now approaching our TP, we downgrade the stock to HOLD (from BUY).
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
Revenue
|
3,619.0
|
4,053.0
|
4,720.0
|
5,549.9
|
EBITDA
|
191.0
|
264.6
|
266.5
|
274.9
|
Core net profit
|
106.2
|
165.1
|
170.7
|
178.5
|
Core EPS (sen)
|
8.3
|
12.9
|
13.3
|
13.9
|
Core EPS growth (%)
|
(36.7)
|
55.6
|
3.4
|
4.6
|
Net DPS (sen)
|
8.3
|
12.9
|
13.3
|
13.9
|
Core P/E (x)
|
37.5
|
24.1
|
23.3
|
22.3
|
P/BV (x)
|
4.1
|
3.9
|
3.9
|
3.9
|
Net dividend yield (%)
|
2.7
|
4.1
|
4.3
|
4.5
|
ROAE (%)
|
10.7
|
16.6
|
16.7
|
17.5
|
ROAA (%)
|
5.5
|
7.7
|
7.7
|
7.7
|
EV/EBITDA (x)
|
14.9
|
10.2
|
13.5
|
12.9
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Share
Price:
|
MYR5.39
|
Target
Price:
|
MYR5.30
|
Recommendation:
|
Hold
|
|
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|
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Strong 4Q but
expected
|
|
Strong 4QFY3/17 net profit was driven by the higher sales
volume as well as forex-related gains. Our FY18-19 EPS forecasts are
raised marginally by 1% p.a. after updating for FY17 numbers. Our TP is
also raised to MYR5.30 (+5%) as we attach its latest mean PER of 22x
(from 21x) on 2018 EPS. Though near-term earnings growth momentum is
strong (we project +29% in FY18), the stock is fairly valued, now
trading at mean.
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FYE Mar (MYR m)
|
FY16A
|
FY17A
|
FY18E
|
FY19E
|
Revenue
|
1,498.3
|
1,822.1
|
2,198.8
|
2,412.9
|
EBITDA
|
386.8
|
419.4
|
520.9
|
594.8
|
Core net profit
|
257.6
|
283.0
|
366.7
|
412.4
|
Core FDEPS (sen)
|
15.5
|
17.1
|
21.9
|
24.7
|
Core FDEPS growth(%)
|
16.3
|
9.8
|
28.6
|
12.5
|
Net DPS (sen)
|
8.0
|
8.0
|
10.3
|
11.6
|
Core FD P/E (x)
|
34.7
|
31.6
|
24.6
|
21.8
|
P/BV (x)
|
5.9
|
5.3
|
4.7
|
4.2
|
Net dividend yield (%)
|
1.5
|
1.5
|
1.9
|
2.1
|
ROAE (%)
|
na
|
na
|
na
|
na
|
ROAA (%)
|
15.1
|
13.3
|
14.9
|
15.0
|
EV/EBITDA (x)
|
21.0
|
19.9
|
17.7
|
15.5
|
Net debt/equity (%)
|
10.9
|
11.3
|
14.8
|
13.7
|
|
|
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MACRO RESEARCH
|
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Construction Index: northern wall broken
by Nik
Ihsan Raja Abdullah
|
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|
FBMKLCI failed to hold onto its early gains on
Tuesday. At day’s end, the benchmark closed 1.59pts lower at
1,766.56. Broader market was relatively mixed with losers still
outpacing gainers by 455 to 427. A total of 3.23b shares worth
MYR2.73b were transacted. The pullback, in our view, was healthy as
the index remains above the recent low of 1,754. Expect bargain
hunting for today in light of strong recovery in oil price.
|
|
|
|
|
Nik Ihsan Raja
Abdullah
|
|
|
Tee Sze Chiah
|
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NEWS
|
|
|
Outside Malaysia:
U.S: Fed’s Rosengren favors three more 2017 hikes to foil
overheating. Federal Reserve Bank of Boston President Eric Rosengren
urged his policy-making colleagues to raise interest rates three more
times this year and consider starting to shrink the central bank’s
balance sheet after their next hike to avoid creating an “over-hot
economy.” Rosengren said he, along with most economists in the Blue Chip
Economic Indicators survey - expects above-potential growth over the next
year, pushing unemployment even farther below its lowest sustainable
level. Unemployment fell to 4.4% in April, already under his 4.7%
estimate for full employment. (Source: Bloomberg)
U.K: Demand for housing dropped to a nine-month low in
April in a sign the property market continues to cool, according to the
Royal Institution of Chartered Surveyors. A measure of inquiries from
potential buyers fell to minus 4 from 1 in March, RICS said in its
monthly survey of real- estate agents. A gauge of instructions from
sellers also declined. Increases in home values have slowed this year as
accelerating inflation erodes household incomes and Brexit clouds the
economic outlook. RICS said anecdotal evidence also pointed to a lack of
properties for sale, uncertainty ahead of the June 8 general election,
and a previous rise in stamp duty as hampering activity. (Source:
Bloomberg)
Japan: Records another strong current-account surplus in
March, supported by income from overseas investments and the profits of
trade. The surplus tends to be larger in March as that’s the end of the
financial year and many companies book overseas revenue, adding to the
primary income surplus. Surplus was JPY 2.9tr (USD 25.4b). The primary
income surplus was JPY 2.2tr. The surplus in goods trade was almost JPY
866b. (Source: Bloomberg)
Crude Oil: Holds biggest gain this year as U.S. stockpiles
extend drop. Oil held its biggest gain this year as U.S. crude stockpiles
fell by more than twice what had been forecast, continuing a decline from
a record and easing an inventory overhang. Stockpiles dropped by 5.25
million barrels last week for a fifth weekly decline, according to
government data. It’s the biggest fall this year and compares with the
median estimate for a 2-million barrel decrease in a Bloomberg survey.
Gasoline and distillate supplies also shrank, helping allay concerns
about another gain in U.S. crude output. Brent for July settlement
advanced to USD 50.22/bbl a barrel. (Source: Bloomberg)
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Other News:
Gadang Holdings: Gadang JV secures MYR327m job. Gadang
CRFG Consortium S/B a 51:49 joint venture between Gadang Engineering (M)
S/B and CRFG Malaysia has bagged a MYR327.90m contract from TRX City S/B
to upgrade part of the Jalan Tun Razak highway. The contract involves the
traffic dispersal and upgrading the stretch from Jalan Langgak Golf to
the Kampung Pandan roundabout. (Source: The Star)
ManagePay: Unit to facilitate card payments for new taxi
e-hailing app. The group has been appointed by a joint venture company
(JVCo) formed by major taxi consortiums here known as PICK N GO S/B as
the sole card payment facilitator for the JVCo's taxi e-hailing mobile
application. Additionally, MPay will is deploying card terminals or MPOS
for the acceptance of physical card payments for up to 8,000 registered
taxis in Malaysia under the consortium by end of this year.(Source: The
Edge Financial Daily)
TRC Synergy : Signs agreement with Starwood Australia to
manage hotel in Melbourne. Its wholly-owned subsidiary, TRC (Aust) Pty
Ltd (TRCA), entered into a 12-year operating service agreement (OSA) with
Starwood Australia to run the hotel known as Element Melbourne Richmond.
Both parties also signed a Centralized Services Agreement for certain
services provided to the hotel; and a Design Review Agreement for certain
services with regards to the design and development of the hotel.
(Source: The Edge Financial Daily)
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