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Share
Price:
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MYR1.90
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Target
Price:
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MYR2.20
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Recommendation:
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Buy
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Not all hope is
lost
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Core net loss widened QoQ to MYR32m (-2% YoY), underpinned
by (i) a sharp fall in revenue (-19% QoQ, -32% YoY) due to weak vehicle
sales and (ii) the absence of Nissan Motor Corp’s positive adjustments
to component cost which featured in 4Q16. We expect TCM to report
better results in forward quarters as sales pick up while not ruling
out further cost adjustments from Nissan. We remain BUYers of TCM from
a trough valuation angle, currently trading at 0.4x P/NTA.
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FYE Dec (MYR m)
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FY15A
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FY16A
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FY17E
|
FY18E
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Revenue
|
5,716.7
|
5,460.8
|
5,319.6
|
5,710.5
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EBITDA
|
307.2
|
158.9
|
192.4
|
227.1
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Core net profit
|
76.5
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(48.4)
|
(12.0)
|
23.8
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Core EPS (sen)
|
11.7
|
(7.4)
|
(1.8)
|
3.7
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Core EPS growth (%)
|
11.5
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nm
|
nm
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nm
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Net DPS (sen)
|
5.0
|
2.0
|
1.0
|
1.0
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Core P/E (x)
|
16.2
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nm
|
nm
|
52.0
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P/BV (x)
|
0.4
|
0.4
|
0.4
|
0.4
|
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Net dividend yield (%)
|
2.6
|
1.1
|
0.5
|
0.5
|
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ROAE (%)
|
2.7
|
(1.9)
|
(0.4)
|
0.8
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ROAA (%)
|
1.5
|
(0.9)
|
(0.2)
|
0.4
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EV/EBITDA (x)
|
9.1
|
16.8
|
14.4
|
12.0
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Net debt/equity (%)
|
37.7
|
51.2
|
52.3
|
50.2
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Share
Price:
|
MYR7.42
|
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Target
Price:
|
MYR7.60
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Recommendation:
|
Hold
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Dividend
surprises again
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The sequentially stronger 1Q17 earnings were within
expectations, with improvements across all segments. We are, however,
surprised by its first interim dividend of 7 sen/shr (46% payout) as
MISC has never declared dividend upon its 1Q results release. Given its
low net gearing of 16% and the long-term nature of its chartering
business, we think the high dividend payout could be sustained.
Maintain our HOLD call and SOP-based TP of MYR7.60.
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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
|
10,908.4
|
9,597.2
|
8,784.7
|
9,181.4
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EBITDA
|
3,913.2
|
3,898.8
|
4,114.8
|
4,426.5
|
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Core net profit
|
2,782.0
|
1,914.0
|
1,938.3
|
2,095.0
|
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Core EPS (sen)
|
62.3
|
42.9
|
43.4
|
46.9
|
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Core EPS growth (%)
|
43.2
|
(31.2)
|
1.3
|
8.1
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Net DPS (sen)
|
20.0
|
30.0
|
30.4
|
32.8
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Core P/E (x)
|
11.9
|
17.3
|
17.1
|
15.8
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P/BV (x)
|
0.9
|
0.9
|
0.9
|
0.8
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Net dividend yield (%)
|
2.7
|
4.0
|
4.1
|
4.4
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ROAE (%)
|
na
|
na
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na
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na
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ROAA (%)
|
6.2
|
3.7
|
3.4
|
3.7
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EV/EBITDA (x)
|
11.2
|
10.3
|
9.9
|
9.4
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Net debt/equity (%)
|
2.3
|
15.4
|
15.2
|
16.9
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Share
Price:
|
MYR1.32
|
|
Target
Price:
|
MYR1.35
|
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Recommendation:
|
Buy
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1Q17: New asset
on board
|
|
1Q17 results were in-line. The strong YoY earnings growth
in 1Q17 was mainly lifted by Menara Shell’s contributions and sustained
occupancy rate of its portfolio. Our earnings forecasts and DDM-TP of
MYR1.35 (cost of equity: 7.5%) are intact. MQREIT currently offers the
highest CY17 net DPU of 5.7% in the M-REIT sector within our coverage
(sector: 5.0%).
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
115.2
|
131.8
|
185.1
|
187.5
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Net property income
|
90.3
|
102.3
|
139.5
|
141.3
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Distributable income
|
54.0
|
59.2
|
92.6
|
94.4
|
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DPU (sen)
|
6.9
|
7.5
|
7.6
|
7.6
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DPU growth (%)
|
(8.1)
|
8.8
|
0.4
|
0.9
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Price/DPU(x)
|
19.1
|
17.5
|
17.4
|
17.3
|
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P/BV (x)
|
1.0
|
0.6
|
1.0
|
1.0
|
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DPU yield (%)
|
5.2
|
5.7
|
5.7
|
5.8
|
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ROAE (%)
|
8.4
|
5.6
|
6.8
|
6.9
|
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ROAA (%)
|
4.3
|
3.0
|
4.0
|
4.1
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Debt/Assets (x)
|
0.4
|
0.4
|
0.4
|
0.4
|
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MACRO RESEARCH
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FBMKLCI Short-term Pressure
by Tee
Sze Chiah
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FBMKLCI sank 13.84pts to close at 1,758.67 yesterday
as profit taking intensified. Broader market reacted negatively with
losers outpacing gainers by 824 to 185. A total of 3.44b shares worth
MYR2.88b changed hands. The correction is set to continue in tandem
with the sharp pullback in oil price and subdued performances in
overnight US markets. The benchmark index is expected to trade
between 1,747 and 1,765. Downside supports are 1,744 and 1,730.
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NEWS
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Outside Malaysia:
U.S. Productivity falls by most in a year; labor costs
climb. U.S. worker productivity declined in the first quarter by the most
in a year as growth in the world’s largest economy weakened, a Labor
Department report showed. The measure of employee output per hour
decreased at a 0.6% annual rate (forecast was a 0.1 percent decline)
after a revised 1.8% gain in the prior three months. Expenses per worker
rose at a 3% pace (forecast was 2.7 percent increase) after a revised
1.3% gain. (Source: Bloomberg)
E.U: Activity in euro-area manufacturing and services
accelerated more than initially estimated as growth in the region’s three
largest economies converged. A composite Purchasing Managers’ Index rose
to 56.8 in April from 56.4 in March, IHS Markit said. An April 21 flash
report was for an increase to 56.7. The spread between gauges for the
rates of expansion in Germany, France, and Italy hasn’t been narrower
since data collection started in 1998. “With the final reading coming in
slightly above the earlier flash estimate, the PMI surveys portray an
economy that is growing at an encouragingly robust pace, and that risks
are moving from the downside to a more balanced situation,” said Chris
Williamson, chief business economist at IHS Markit. (Source: Bloomberg)
U.K: Growth in Britain’s services sector unexpectedly
strengthened in April, giving the economy a solid start to the second
quarter after a weaker-than-forecast performance at the start of the
year. IHS Markit’s index rose to 55.8 in April from 55 in March, defying
expectations for a decline to 54.5. Its measures for manufacturing and
construction published earlier this week also improved, and the gauges
suggest U.K. economic growth is running at a 0.6% pace. The services
survey also showed that new business grew at the fastest pace this year
and employment rose, albeit modestly. (Source: Bloomberg)
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Other News:
Pos Malaysia: Pos Malaysia, Lazada develop e-commerce
regional distribution centre. A MYR60m e-Commerce Regional Distribution
Centre is being established in Sepang, Selangor, via a collaboration
between Pos Malaysia Bhd and Lazada S/B. The distribution centre can
handle 182,000 tonnes of items. The group is targeting 34m items for next
year followed by 64m in 2019. The hub is expected to benefit both
international and local e-commerce players and customers in 30 countries
in the Asia-Pacific region. (Source: The Star)
Samchem: 1Q earnings up 38% on higher sales, higher profit
margin. Posted a 38% rise in net profit for the first quarter ended March
31, 2017 (1QFY17) to MYR5.01m from MYR3.64m a year ago, on higher sales
and wider profit margin. Quarterly revenue was up 36% to MYR217.57m from
MYR159.64m in the previous year, which was attributed to its market
positioning in the region as Samchem continues to strengthen its
competitive capabilities. (Source: The Edge Financial Daily)
Daibochi: 1Q earnings slip 11%, but expects better FY17
with new contracts. Net profit fell 11% in the first quarter ended March
31, 2017 (1QFY17) to MYR5.77m versus MYR6.51m in the same time last year,
despite higher revenue. The drop in earnings is due to lower foreign
currency gain and higher raw material costs. It declared the first
interim dividend of 1.32 sen per share for the quarter, with an estimated
payout of MYR3.6m, payable on June 22. It is set to see higher exports to
Indonesia’s burgeoning consumer market, on the back of new contracts to
major Food & Beverage and fast moving consumer goods companies.
(Source: The Edge Financial Daily)
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