Friday, May 19, 2017

Press Metal: 1Q net profit up 56.6%, pays 1.5 sen dividend. Net profit jump 56.6% to MYR148.05m in the first quarter ended March 31, 2017 (1QFY17), from MYR94.56m a year ago, mainly due to higher production output generated by its Samalaju Phase 2 smelting plant in Sarawak and improved metal price. Quarterly revenue grew 56.7% to MYR2.02b in 1QFY17, from MYR1.29b in 1QFY16. Press Metal also declared a first interim dividend of 1.5 sen per share for financial year ending Dec 31, 2017 (FY17), payable on June 21. (Source: The Edge Financial Daily)






ViTrox Corp | Just the tip of the iceberg
Ivan Yap







Tambun Indah Land | Beats expectation
Wei Sum Wong







Media Prima | Diversification & evolution
Samuel Yin Shao Yang









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Philippines | Slower start
Suhaimi Ilias







Malaysia | VIX Index – Risk escalating
Nik Ihsan Raja Abdullah








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COMPANY RESEARCH





Results Review





ViTrox Corp (VITRO MK)
by Ivan Yap





Share Price:
MYR6.02
Target Price:
MYR4.70
Recommendation:
Buy




Just the tip of the iceberg

Despite a seasonally soft quarter, 1Q17 revenue hit a record high at MYR70m while core net profit of MYR19m came in at 30% of our and consensus full-year forecasts. Strong demand in its AXI division prompts our 23%-48% FY17-19 profit upgrade. Campus 2.0 completion (3x current floor space) by 3Q17 would ease current floor space constraint, offering further scaling up opportunities. BUY with a higher MYR7.20 TP (+53%) as we peg ViTrox to 18x CY18 PER (from 14.5x), in line with regional peers.



FYE Dec (MYR m)
FY15A
FY16A
FY17E
FY18E
Revenue
160.3
234.0
305.6
368.1
EBITDA
59.1
65.2
95.6
119.7
Core net profit
38.9
68.9
78.9
94.4
Core EPS (sen)
16.5
29.2
33.4
40.0
Core EPS growth (%)
(18.8)
77.1
14.4
19.7
Net DPS (sen)
5.0
6.5
8.4
10.0
Core P/E (x)
36.5
20.6
18.0
15.0
P/BV (x)
6.8
5.4
4.4
3.6
Net dividend yield (%)
0.8
1.1
1.4
1.7
ROAE (%)
23.1
27.5
27.1
26.5
ROAA (%)
16.1
21.8
18.1
17.3
EV/EBITDA (x)
12.7
12.2
14.2
11.1
Net debt/equity (%)
net cash
net cash
net cash
net cash










Results Review





Tambun Indah Land (TILB MK)
by Wei Sum Wong





Share Price:
MYR1.54
Target Price:
MYR1.55
Recommendation:
Hold




Beats expectation

Tambun Indah (TI)’s 1Q17 net profit of MYR24m (+1.6% YoY) was above our expectation but in-line with consensus. 1Q17 locked-in sales of MYR36.2m (-69% YoY, +104% QoQ) was also in line. Management is keeping its sales target of MYR180m for 2017 supported by c.MYR170m worth of new launches. We raise our FY17 net profit forecast by +8% but keep FY18-19 largely unchanged. Our RNAV-TP is largely intact at MYR1.55 (+1sen) on an unchanged 0.5x RNAV peg. Maintain HOLD.



FYE Dec (MYR m)
FY15A
FY16A
FY17E
FY18E
Revenue
367.7
360.8
333.5
219.0
EBITDA
129.0
145.8
103.5
58.2
Core net profit
94.4
107.0
77.1
43.6
Core EPS (sen)
22.3
25.1
17.9
10.1
Core EPS growth (%)
(8.3)
12.6
(28.7)
(43.5)
Net DPS (sen)
9.7
9.0
7.1
4.0
Core P/E (x)
6.9
6.1
8.6
15.3
P/BV (x)
1.4
1.2
1.1
1.1
Net dividend yield (%)
6.3
5.8
4.6
2.6
ROAE (%)
na
na
na
na
ROAA (%)
13.2
14.1
9.7
5.3
EV/EBITDA (x)
4.7
4.5
6.7
11.8
Net debt/equity (%)
1.9
10.2
4.1
2.9










Company Update





Media Prima (MPR MK)
by Samuel Yin Shao Yang





Share Price:
MYR1.09
Target Price:
MYR1.10
Recommendation:
Hold




Diversification & evolution

MPR organised an investor day entitled ‘Inside Out’ on 17 May 2017. The key message was that MPR needs to diversify its operations and evolve with the times. Targets have been set and MPR did not discount more M&As to achieve those targets. We are positive that MPR has an action plan but opine that it is too early to quantify its impact yet. Our estimates are unchanged pending the 1Q17 results due on 29 May. Our MYR1.10 TP, based on 0.9x ex-goodwill BVPS, is also unchanged for now.



FYE Dec (MYR m)
FY15A
FY16A
FY17E
FY18E
Revenue
1,427.7
1,289.0
1,372.0
1,444.5
EBITDA
325.8
163.6
181.0
195.4
Core net profit
138.7
38.7
68.0
82.8
Core EPS (sen)
12.5
3.5
6.1
7.5
Core EPS growth (%)
(2.4)
(72.1)
75.5
21.8
Net DPS (sen)
10.0
8.0
8.0
6.0
Core P/E (x)
8.7
31.2
17.8
14.6
P/BV (x)
0.7
0.8
0.8
0.8
Net dividend yield (%)
9.2
7.3
7.3
5.5
ROAE (%)
8.6
(3.8)
4.7
5.7
ROAA (%)
5.8
1.7
3.3
4.2
EV/EBITDA (x)
4.0
7.5
6.9
6.3
Net debt/equity (%)
net cash
net cash
2.1
1.0








MACRO RESEARCH






Slower start
by Suhaimi Ilias


Economics Research





Real GDP growth eased to +6.4% YoY in 1Q 2017 (4Q 2016: +6.6% YoY) as both domestic demand and net external demand growth decelerated. Maintain our 2017 growth forecast of +6.4% (official: +6.5% to +7.5%).












VIX Index – Risk escalating
by Nik Ihsan Raja Abdullah


Technical Research





FBMKLCI fell 8.48pts to close at 1,767.17 yesterday. Broader market was equally bearish with losers outpacing gainers by 625 to 317. A total of 2.98b shares worth MYR2.64b changed hands. Yesterday’s selloff was on thinner trading volume, suggesting that selling pressure was well contained.







NEWS


Outside Malaysia:

U.S: Trump trade-deficit review looks at industries big and small. The Trump administration is looking at options big and small to re-balance American trade. The U.S. Commerce Department will listen to a wide range of representatives from catfish farmers to manufacturers and even the National Football League during a day-long hearing on how to reduce the country’s USD 750b merchandise trade deficit. President Donald Trump has ordered his administration to study the causes of trade deficits as part of his wider agenda to bring back home U.S. manufacturing jobs. Included in that review, the Commerce Department is holding the public sessions in which 35 individuals are scheduled to testify about their ideas for reducing the trade gap. (Source: Bloomberg)

Mexico: Unexpectedly raises rate to avoid inflation spreading. Mexico’s central bank unexpectedly raised its key interest rate for a sixth straight meeting to keep an increase in consumer prices from deepening after inflation accelerated to almost double policy makers’ target. Banco de Mexico, led by Governor Agustin Carstens, lifted its benchmark by a quarter point to 6.75%, surprising most of the economists surveyed by Bloomberg. (Source: Bloomberg)

U.K: Retail sales gained more than expected in April as nice weather prompted Britons to splurge on their homes and gardens. The volume of goods sold in stores and online increased 2.3% after a 1.4% drop in March, the Office for National Statistics said. Average store-price inflation slowed. The data suggest consumer spending, the mainstay of economic growth, is holding up in the face of rapidly increasing food and fuel costs. Retail sales declined for the first quarter in seven years in the three months through March. (Source: Bloomberg)

Indonesia: Central bank left its benchmark interest rate unchanged for a seventh month as inflation heads closer to the top of the target band. Governor Agus Martowardojo and his board held the seven-day reverse repurchase rate at 4.75%. The bank went on a cutting spree last year as it lowered rates six times, but has been on hold since the last move in October. (Source: Bloomberg)

Australia: Jobless rate fell in April, adding to the previous month’s strong employment gains, reinforcing expectations that the central bank won’t cut interest rates further. Employment rose 37,400 from March. Jobless rate fell to 5.7%, the lowest since January. Full-time jobs fell 11,600; part-time employment rose 49,000. Participation rate held at 64.8% vs forecast 64.7%. The unexpectedly strong result bolsters the central bank’s view that the labor market is starting to gather steam, even though the data series is notoriously volatile. The Reserve Bank of Australia is looking for improved jobs and wage growth to pull core inflation back into its 2-3% target band, but is mindful of record high underemployment. (Source: Bloomberg)





Other News:

Press Metal: 1Q net profit up 56.6%, pays 1.5 sen dividend. Net profit jump 56.6% to MYR148.05m in the first quarter ended March 31, 2017 (1QFY17), from MYR94.56m a year ago, mainly due to higher production output generated by its Samalaju Phase 2 smelting plant in Sarawak and improved metal price. Quarterly revenue grew 56.7% to MYR2.02b in 1QFY17, from MYR1.29b in 1QFY16. Press Metal also declared a first interim dividend of 1.5 sen per share for financial year ending Dec 31, 2017 (FY17), payable on June 21. (Source: The Edge Financial Daily)

JCY International: Reports 2nd profitable quarter in a row, declares 1.25 sen dividend. Reported a net profit of MYR15.41m in its second quarter ended March 31, 2017 (2QFY17), compared with a net loss of MYR6.43m a year ago, due to favourable U.S. dollar to ringgit exchange rate in the current reporting period. The group declared a second interim dividend of 1.25 sen per share for financial year ending Sept 30, 2017, with the entitlement and payment dates to be announced later. (Source: The Edge Financial Daily)

Tomypak Holdings: 1Q surges 78.3% on increased demand, declares 2 sen dividend. Its net profit for its first financial quarter ended March 31, 2017 (1QFY17) surge 78.3% to MYR6.26m, from MYR3.51m a year ago, on higher demand from its local and overseas customers, improved production cost, and lower foreign exchange losses. Tomypak declared a dividend of 2 sen per share to be paid on June 16, to shareholders whose names appear on the record of depositors on June 2. (Source: The Edge Financial Daily)

Century Logistics: 1Q profit strengthens 9%. Posted a 9% rise in net profit to MYR4.85m in the first quarter ended March 31, 2017 (1QFY17), versus MYR4.46m a year ago, on higher contribution from its total logistics services segment. Revenue was up 2% to MYR71.03m, from MYR69.54m a year ago (1QFY16), on higher activities from the same segment. (Source: The Edge Financial Daily)


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