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Share
Price:
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MYR4.30
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Target
Price:
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MYR4.50
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Recommendation:
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Hold
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Better quarters
ahead
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Stripping out a MYR7m unrealized forex loss from OMS, 1Q17
core earnings of MYR30m met 13% of our FY17 forecast. We lower our
FY17-19 earnings forecasts by 4%-5% factoring in the
slower-than-expected progress of the Pan Borneo Sarawak Highway
construction and lower contribution from the road maintenance division.
Our revised SOP-based TP is MYR4.50 (-4%). CMS is now a HOLD due to a
smaller upside potential to our 12M target with much of the improving
outlook priced in for now.
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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
|
1,788.0
|
1,551.3
|
1,950.8
|
2,197.6
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EBITDA
|
394.8
|
418.9
|
388.1
|
420.3
|
|
Core net profit
|
244.7
|
212.4
|
221.3
|
258.9
|
|
Core EPS (sen)
|
22.8
|
19.8
|
20.6
|
24.1
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Core EPS growth (%)
|
7.0
|
(13.2)
|
4.2
|
17.0
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Net DPS (sen)
|
4.5
|
6.3
|
8.2
|
9.6
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Core P/E (x)
|
18.9
|
21.7
|
20.9
|
17.8
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P/BV (x)
|
2.3
|
2.1
|
2.0
|
1.8
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Net dividend yield (%)
|
1.0
|
1.5
|
1.9
|
2.2
|
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ROAE (%)
|
13.0
|
8.0
|
9.7
|
10.7
|
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ROAA (%)
|
8.1
|
6.4
|
6.1
|
6.6
|
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EV/EBITDA (x)
|
14.3
|
10.5
|
12.1
|
11.1
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Chew Hann Wong
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Adrian Wong
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Share
Price:
|
MYR14.80
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Target
Price:
|
MYR15.60
|
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Recommendation:
|
Hold
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1Q17: In line
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1Q17 results were in line. We believe management’s focus
on cost efficiencies, coupled with robust sales in Singapore, should
help support earnings growth in the near term. Moving forward, a
narrower loss at the associate level could provide a further boost to
CAB’s earnings. Our earnings forecasts, HOLD call and DCF-TP are
unchanged.
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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
|
1,659.9
|
1,679.5
|
1,732.4
|
1,805.6
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EBITDA
|
306.0
|
327.8
|
341.3
|
356.7
|
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Core net profit
|
228.3
|
205.0
|
230.4
|
245.6
|
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Core EPS (sen)
|
74.7
|
67.0
|
75.4
|
80.3
|
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Core EPS growth (%)
|
7.9
|
(10.2)
|
12.4
|
6.6
|
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Net DPS (sen)
|
72.0
|
72.0
|
75.0
|
80.0
|
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Core P/E (x)
|
19.8
|
22.1
|
19.6
|
18.4
|
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P/BV (x)
|
13.5
|
14.1
|
13.6
|
13.0
|
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Net dividend yield (%)
|
4.9
|
4.9
|
5.1
|
5.4
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ROAE (%)
|
66.7
|
62.4
|
70.5
|
72.2
|
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ROAA (%)
|
34.5
|
31.0
|
34.2
|
35.0
|
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EV/EBITDA (x)
|
11.7
|
13.0
|
13.3
|
12.7
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Share
Price:
|
MYR1.29
|
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Target
Price:
|
MYR1.11
|
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Recommendation:
|
Hold
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Earnings on
track
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UEMS’ 1Q17 net profit of MYR61.3m (+>100% YoY) was in
line but property sales fell short at MYR169m (just 14% of its 2017
sales target of MYR1.2b) due to the lack of new launches in 1Q17. Sales
should however pick up in the 2H with MYR1.7b of new pipeline launches.
We maintain our earnings forecasts and MYR1.11 TP on an unchanged 60%
discount to MYR2.85 RNAV/shr. Reiterate HOLD.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
1,749.9
|
1,841.5
|
1,873.6
|
1,578.6
|
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EBITDA
|
299.6
|
224.4
|
485.5
|
382.5
|
|
Core net profit
|
257.2
|
147.3
|
254.8
|
192.6
|
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Core FDEPS (sen)
|
5.2
|
2.9
|
4.9
|
3.7
|
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Core FDEPS growth(%)
|
(51.1)
|
(44.8)
|
73.0
|
(24.4)
|
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Net DPS (sen)
|
1.6
|
0.0
|
0.0
|
0.0
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Core FD P/E (x)
|
24.9
|
45.2
|
26.1
|
34.6
|
|
P/BV (x)
|
0.9
|
0.9
|
0.8
|
0.8
|
|
Net dividend yield (%)
|
1.2
|
0.0
|
0.0
|
0.0
|
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ROAE (%)
|
na
|
na
|
na
|
na
|
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ROAA (%)
|
2.2
|
1.2
|
1.9
|
1.4
|
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EV/EBITDA (x)
|
24.0
|
35.9
|
19.4
|
25.1
|
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Net debt/equity (%)
|
24.3
|
40.7
|
43.1
|
44.5
|
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|
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Share
Price:
|
MYR1.53
|
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Target
Price:
|
MYR1.45
|
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Recommendation:
|
Hold
|
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Buys prime land
in KL
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We are positive on MSGB’s latest land acquisition in
Titiwangsa for its fair pricing and strategic location. The land, which
will be developed under the transit-oriented development (TOD) concept,
has an estimated GDV of MYR650m. We lower earnings forecasts by -2% to
-8% to factor in the land purchase and recently-issued unrated senior
perpetual securities. Our RNAV-TP is marginally raised to MYR1.45
(+1sen, 0.6x P/RNAV). Maintain HOLD.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
3,108.5
|
2,957.6
|
2,980.0
|
3,119.6
|
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EBITDA
|
527.9
|
508.8
|
585.2
|
657.8
|
|
Core net profit
|
338.8
|
319.5
|
300.7
|
343.3
|
|
Core FDEPS (sen)
|
14.1
|
13.3
|
12.5
|
14.2
|
|
Core FDEPS growth(%)
|
(23.5)
|
(5.7)
|
(5.9)
|
14.1
|
|
Net DPS (sen)
|
6.5
|
6.5
|
5.0
|
5.7
|
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Core FD P/E (x)
|
10.9
|
11.5
|
12.3
|
10.7
|
|
P/BV (x)
|
1.2
|
1.1
|
1.1
|
1.0
|
|
Net dividend yield (%)
|
4.2
|
4.2
|
3.3
|
3.7
|
|
ROAE (%)
|
na
|
na
|
na
|
na
|
|
ROAA (%)
|
5.7
|
5.0
|
4.3
|
4.3
|
|
EV/EBITDA (x)
|
6.9
|
6.9
|
4.2
|
3.5
|
|
Net debt/equity (%)
|
3.7
|
2.0
|
net cash
|
net cash
|
|
|
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MACRO RESEARCH
|
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|
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Inflation rate off the high
by
Suhaimi Ilias
|
|
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|
|
Headline inflation rate in Apr 2017 eased to +4.4% YoY
(Mar 2017: +5.1% YoY) while core inflation was steady at +2.5% YoY
(Mar 2017: +2.5% YoY). Year-to-date headline inflation rate picked up
to +4.3% YoY (Jan-Apr 2016: +3.1% YoY) while core inflation rate
slowed to +2.4% YoY (Jan-Apr 2016: +3.3% YoY). No change in our
full-year 2017 inflation rate forecast at 3.5%-4.0% (2016: +2.1%).
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Suhaimi Ilias
|
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Zamros
Dzulkafli
|
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|
Stable jobless rate, slowing income growth
by
Suhaimi Ilias
|
|
|
|
|
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|
|
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|
|
Unemployment rate was 3.4% in Mar 2017 (Feb 2017:
3.5%) after staying at 3.5% for three consecutive months, but
continued to hover in the 3.4%-3.5% range since Dec 2015. Our
full-year average unemployment rate forecast is 3.4% (1Q 2017: 3.5%;
2016: 3.5%).
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Suhaimi Ilias
|
|
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|
Zamros
Dzulkafli
|
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|
|
Property Index: correction underway
by Nik
Ihsan Raja Abdullah
|
|
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|
|
|
|
|
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|
|
FBMKLCI ended 2.5pts lower at 1,775.65 yesterday amid
profit taking in blue chips stocks. Market breadth was slightly
negative with losers outpacing gainers by 473 to 417. A total of
3.45b shares worth MYR2.88b changed hands. Taking cue from the weaker
overnight US markets, the benchmark index is likely to trade in a
defensive mode, with possible movement between 1,755 and 1,775.
Downside supports are 1,755 and 1,729.
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Nik Ihsan Raja
Abdullah
|
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|
Tee Sze Chiah
|
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NEWS
|
|
|
Outside Malaysia:
U.K: Britons’ falling real wages show challenging times
have arrived. U.K. workers saw their real earnings fall for the first
time in 2 1/2 years, data from the Office for National Statistics showed.
That’s particularly problematic for a nation that has relied on buoyant
consumers to keep spending, not least as it enters negotiations to leave
the world’s largest trading bloc. Real earnings are still below their
level before the 2008 financial crisis, and their recovery over the past
two years is now going into reverse as the weak pound pushes up prices.
Regular pay adjusted for inflation fell 0.2%, the ONS said. Nominal
earnings slowed to growth of 2.1%, an eight-month low. The unemployment
rate fell to 4.6%, the lowest since 1975. At the same time, inflation is
heading toward 3% this year, squeezing consumer spending. (Source:
Bloomberg)
Japan: Economy extends run of gains as exports support
growth. Japan’s economy expanded for a fifth straight quarter, the
longest run of gains in a decade, supported by continued strength in
exports. Gross domestic product increased by an annualized 2.2% in the
three months ended March 31 (estimate +1.7%), accelerating from a revised
1.4% in the previous quarter. Private consumption gained 0.4% in the
first quarter from the previous three months (estimate +0.5%).Business
spending rose 0.2% (estimate -0.4%) Net exports, or shipments less
imports, added 0.1 percentage point to GDP. (Source: Bloomberg)
India: RBI targets rupee forwards as cash hinders spot
intervention. The central bank is increasingly turning to the forwards
market for currency intervention, as a banking system already flooded
with cash limits its ability to act in the spot market. The Reserve Bank
of India bought USD 8b of foreign currency in the forwards market in
March, latest official data released showed, as the rupee capped its best
first-quarter performance in four decades. (Source: Bloomberg)
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Other News:
Seacera: Buys Melaka land with warehouse on it for
MYR16.9m. Its subsidiary Seacera Ceramics S/B is acquiring a piece of
land in Melaka with a warehouse erected on it for MYR16.90m from QM
Sports S/B. At MYR16.9m, Seacera is purchasing the land at MYR99.76 per
sqf. As at end-2015, the 99-year old leasehold land, expiring in 2074,
has an audited net book value of MYR5.86m. The property will serve as its
warehouse and distribution hub for the southern region. (Source: The Edge
Financial Daily)
Focus Lumber: 1Q earnings up 89% on improved production,
recovery rate, lower cost. The group posted a 88.92% increase in net
profit in 1QFY17 to MYR6.26m or 6.06 sen per share, from MYR3.31m or 3.21
sen a year earlier. It attributed increase in earnings to an improved production
recovery rate and achieved lower production cost per cubic metre in the
current quarter.Going forward, Focus Lumber will continuously work
towards improving the quality of its products and reducing average
product cost, through investment in new machineries. (Source: The Edge
Financial Daily)
Anzo: Turns around in 4Q after 16 consecutive quarter s of
losses. Anzo has reported profit after 16 consecutive loss-making
financial quarters. Anzo reported a net profit of MYR1.27m or 0.42 sen
per share for 4QFY17, versus a net loss of MYR3.84m or 1.35 sen per share
a year ago. The improvement was mainly due to construction billings from
its Porto De Melaka project, amounting to MYR5.7m; reversal on provision
for doubtful debts of MYR1.3m; and no further inventory write down in the
current quarter. For the whole FY17, however, Anzo still reported a net
loss of MYR4.63m, which was 57.37% narrower than its MYR10.85m of net
loss back in FY16. (Source: The Edge Financial Daily)
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