Thursday, May 11, 2017

MAHB : Malaysia Airports said to plan stake sale in Istanbul airport

YTLP Power : Paka PPA secured                 HOLD

We maintain our HOLD recommendation. Our fair value of RM1.67/share (from RM1.66/share) is derived from a SOP valuation. This includes YTLP’s remaining entities being valued on a DCF basis as well. It implies a forward P/E of 17x, well above its historical average of 12.5x. However, the stock offers an attractive dividend yield of 7.0%. Tenaga announced it has signed a new PPA and land lease agreement (LLA) with YTL Power (YTLP). The PPA is for an extension of 3 years and 10 months on the generation and sale of electricity from YTL Power’s 585MW combined-cycle gas-fired power plant in Paka, Terengganu. The scheduled commercial commencement date of the plant is 1 Sep 2017. The new LLA will replace the original LLA dated 1993. It enables YTLP to lease the land on which the Paka power plant occupies. The LLA extends for the length of the PPA extension and subsequent demobilisation of the plant.

The impact to YTL Power is positive but minimal. Meanwhile, it is an earnings neutral event to TNB. Earnings are back loaded till FY21F as we trim our FY18 net profit by -1.5% as we initially assumed for the Paka power plant to commence operations by FY18. It factors in an additional year reflecting the longer term PPA of 3 years and 10 months (vs. 2 years and 10 months previously). We deem lacklustre earnings visibility over its various operating entities to weigh on YLTP’s growth prospects in the interim.

Hartalega Holdings : A good wrap to FY17              HOLD
Oceancash Pacific, Kretam Holdings,Magni-Tech Industries,Inari Amertron

Malaysia : Anticipate OPR to stand pat in next MPC meeting

MAHB : Malaysia Airports said to plan stake sale in Istanbul airport
AirAsia  : AirAsia, Tourism Malaysia team up to promote tourism
Selangor Dredging : SDB diversifies back into mining

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

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