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Share
Price:
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MYR1.03
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Target
Price:
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MYR1.12
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Recommendation:
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Hold
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Growing horizons
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Eco World International (EWI) is the first and only
Malaysia listed developer with pure overseas exposure in the UK and
Australia property markets. Earnings growth would be strong in
FY18-FY20 with the staggered contributions from its London and Sydney/Melbourne
projects. We initiate coverage with a HOLD and MYR1.12 RNAV-TP (0.75x
P/RNAV).
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FYE Oct (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
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0.0
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0.7
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0.6
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0.7
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EBITDA
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0.0
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(37.6)
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(63.3)
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(60.4)
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Core net profit
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0.0
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(220.1)
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(103.5)
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225.9
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Core FDEPS (sen)
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0.0
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(89.3)
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(4.3)
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9.4
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Core FDEPS growth(%)
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na
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nm
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nm
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nm
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Net DPS (sen)
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0.0
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0.0
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0.0
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0.0
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Core FD P/E (x)
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nm
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nm
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nm
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10.9
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P/BV (x)
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nm
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2.4
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0.8
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0.9
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Net dividend yield (%)
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0.0
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0.0
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0.0
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0.0
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ROAE (%)
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na
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na
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na
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na
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ROAA (%)
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na
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(35.4)
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(4.4)
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6.3
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EV/EBITDA (x)
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na
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na
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nm
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nm
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Net debt/equity (%)
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nm
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nm
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net cash
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net cash
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Wei Sum Wong
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Syairah Malek
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Share
Price:
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MYR2.03
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Target
Price:
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MYR2.85
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Recommendation:
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Buy
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Within ours but
beat street’s
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9MFY7/17 core net profit of MYR122m met our expectation at
71% of our full-year forecast but beat streets’ estimate at 75%. We
expect 4QFY17 net profit to sustain at MYR50-58m to meet our FY17 net
profit forecast of MYR172m. Our forecasts are unchanged but we see
further upside in the Malaysian operation should the box-build
operation progresses faster than expected. Higher TP of MYR2.85,
pegging a 17.5x CY18 PER (previously 14x CY18 PER). Reiterate BUY.
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FYE Jul (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
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1,936.9
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2,175.6
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2,968.4
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3,978.9
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EBITDA
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239.2
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226.4
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321.3
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420.7
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Core net profit
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135.7
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135.1
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171.7
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236.3
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Core FDEPS (sen)
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10.4
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8.5
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10.9
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14.9
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Core FDEPS growth(%)
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111.8
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(18.2)
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27.2
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37.6
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Net DPS (sen)
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4.8
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4.7
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5.6
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7.2
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Core FD P/E (x)
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19.5
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23.8
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18.7
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13.6
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P/BV (x)
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3.4
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3.0
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2.4
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2.1
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Net dividend yield (%)
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2.4
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2.3
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2.7
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3.5
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ROAE (%)
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20.4
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14.2
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16.7
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18.0
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ROAA (%)
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8.0
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7.0
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8.1
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9.7
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EV/EBITDA (x)
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8.5
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9.2
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9.8
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7.8
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Net debt/equity (%)
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17.2
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18.4
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9.6
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5.0
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Share
Price:
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MYR2.02
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Target
Price:
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MYR2.00
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Recommendation:
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Hold
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Below ours but
within street’s
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4QFY4/17 earnings fell short, largely on higher operating
expenses (likely advertising and promotion to clear the existing CX-5
model). FY17 is likely the bottom for BAuto with exciting launches
ahead; the new CX-5 is set to be launched by Oct 2017. Our FY18-19
earnings forecasts are marginally tweaked (-1%-3%). Correspondingly,
our TP is trimmed by 5sen to MYR2.00, pegged on unchanged 12.5x CY18
PER (-0.5SD of mean). Maintain HOLD for decent 5+% dividend yields.
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FYE Apr (MYR m)
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FY16A
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FY17A
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FY18E
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FY19E
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Revenue
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2,095.4
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1,659.5
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2,093.8
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2,227.2
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EBITDA
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267.2
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167.9
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238.0
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275.5
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Core net profit
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201.4
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120.2
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162.9
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196.9
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Core FDEPS (sen)
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17.6
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10.4
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13.8
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17.0
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Core FDEPS growth(%)
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(9.7)
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(40.8)
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32.9
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23.2
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Net DPS (sen)
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16.9
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11.7
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11.3
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11.9
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Core FD P/E (x)
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11.5
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19.4
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14.6
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11.9
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P/BV (x)
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4.4
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5.3
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4.9
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4.4
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Net dividend yield (%)
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8.4
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5.8
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5.6
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5.9
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ROAE (%)
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39.3
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24.4
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35.3
|
38.9
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ROAA (%)
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23.9
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12.6
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17.4
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20.3
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EV/EBITDA (x)
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8.2
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14.0
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9.0
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7.7
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Net debt/equity (%)
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net cash
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net cash
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net cash
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net cash
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SECTOR RESEARCH
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Still low May stockpile
by Chee
Ting Ong
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MPOB’s May stockpile was lower marginally for the
first time in 3 months on relatively strong Eid al-Fitr demand. But
market appears concerned over post Eid al-Fitr demand amidst
anticipated higher output in 2H17 (post El Nino recovery) as CPO
price declined yesterday afternoon despite still tight stockpile.
Stay NEUTRAL on the sector as we expect CPO price to weaken further
in 2H17 when output peaks seasonally. Our regional BUYS are BPLANT,
SOP, BAL, AALI, LSIP and TBLA.
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MACRO RESEARCH
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Consumer spending holding up
by
Suhaimi Ilias
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Distributive trade growth picked up in Apr 2017 to
+7.3% YoY (Mar 2017: +7.0% YoY). In particular, retail trade grew by
a faster +10.1% YoY (Mar 2017: +9.7% YoY; 1Q 2017: +7.8% YoY),
suggesting the momentum in real private consumption was intact in
early-2Q 2017 following the +6.6% growth in 1Q 2017.
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Suhaimi Ilias
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Zamros
Dzulkafli
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FBMKLCI – Taking a breather
by Nik
Ihsan Raja Abdullah
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FBMKLCI lost 4.45pts after failing to hold onto its
early gains. At day’s end, the benchmark fell 0.25% to 1,784.44.
Market breath was negative with losers outpacing gainers by 557 to
349. A total of 2.05b shares worth MYR2.57b changed hands. FBMKLCI
was in a consolidation mode for the past few days. Sentiment was
cautious ahead of US FOMC meeting.
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Nik Ihsan Raja
Abdullah
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Tee Sze Chiah
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NEWS
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Outside Malaysia:
U.S: Wholesale prices little changed in May, reflecting
declines in the costs of fuel and food, Labor Department data showed.
Producer-price index was unchanged (matching forecasts) following a 0.5%
MoM gain the prior month. Wholesale prices advanced 2.4% YoY in May after
rising 2.5% YoY. PPI excluding food and energy rose 0.3% MoM from prior
month and was up 2.1% YoY from May 2016. (Source: Bloomberg)
E.U: The European Central Bank is unlikely to include
Greek bonds in its asset-purchase program for the foreseeable future, a
person familiar with the matter said, as European creditors aren’t
prepared to offer substantially easier repayment terms on bailout loans
to improve the nation’s debt outlook. (Source: Bloomberg)
Germany: Investor confidence unexpectedly dropped in June
in a sign that exaggerated optimism in Europe’s largest economy is
beginning to moderate. The ZEW Center for European Economic Research in
Mannheim said that its index of investor and analyst expectations, which
aims to predict economic developments six months ahead, fell to 18.6 from
20.6 in June. With business confidence climbing to the highest level
since 1991 and manufacturers and service providers reporting the fastest
expansion in six years, sentiment indicators have recently exceeded
already strong economic fundamentals. (Source: Bloomberg)
U.K: Inflation resumed its upward march last month,
accelerating more than forecast to the fastest pace in four years. An
increase in prices for computer games, laptops and package holidays - partly
reflecting the impact of the weaker pound - lifted the inflation rate to
2.9% YoY, the highest since June 2013. Core inflation, which excludes
food and energy, also unexpectedly quickened in May, according to the
Office for National Statistics. It reached 2.6% YoY, the highest since
November 2012. (Source: Bloomberg)
Brazil: Retail sales beat all estimates as recession ends.
Brazil’s retail sales unexpectedly rose in April in the latest sign of
life for an economy struggling to shake off its worst recession on
record. Sales rose 1% MoM from March. On a yearly basis, sales rose 1.9%
YoY. Brazil’s economic activity expanded in the first quarter and
unemployment fell for the first time in over two years in the three
months through April, suggesting the worst is behind for Latin America’s
largest economy. (Source: Bloomberg)
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Other News:
SP Setia: Looking for more developments in Australia.
According to the company’s CEO, when asked if SP Setia is looking to
acquire more land in Australia, he replied “Yes, definitely!”. He told a
press conference following a signing ceremony between them and ShangriLa
Hotels and Resorts, which has been appointed the hotel operator for SP
Setia’s mixed development in Exhibition Street yesterday, “Australia is
one of the areas that we would like to expand, and in Melbourne, we have
five projects at the moment. And we are definitely looking for more in
Melbourne. He added, “We will also be looking for [more development
sites] in Sydney, but we have not found a suitable site so far”. SP Setia
is looking to launch the Exhibition Street development by the end of this
month. (Source: The Edge Financial Daily)
Alliance: Eyes ‘mid-single digit’ loan growth. The company
expects its loan segment to grow by mid-single digit in the current
financial year ending March 31, 2018 (FY18) “before accelerating
considerably”, said its group CEO Joel Kornreich. According to him, AFG’s
latest strategic initiative, Alliance One Account, will be among the key
drivers to achieve its FY18 loan growth target. AFG’s loan target is in
line with the loan growth of the country’s banking sector, which grew by
6% as at end-March 2017, according to Bank Negara Malaysia’s data.
(Source: The Edge Financial Daily)
Vivocom: Bagged MYR195.23m job to build PPA1M
condominiums. The company has bagged a MYR195.23m contract to construct
condominium blocks under the 1Malaysia Civil Servants’ Housing Programme
(PPA1M) in Perak. The group said the contract from SBA Property
Management Sdn Bhd is for the building of four blocks of 1,200 PPA1M
condominium units in Manjung. The project will commence upon site possession
and completed within 42 months. (Source: The Edge Markets)
Hektar REIT: To focus on more assets outside Klang Valley.
The company is actively looking to acquire more assets outside of Klang
Valley, to bolster its financial performance. Hektar Asset Management Sdn
Bhd (the manager of Hektar REIT) CEO Datuk Hisham Othman said the
retail-centric REIT was always looking at assets with good yields,
especially outside of Klang Valley. Hektar REIT's shopping mall portfolio
includes Subang Parade in Selangor and Mahkota Parade in Melaka. In
Johor, the REIT, which owns Wetex Parade in Muar, is in the midst of
acquiring the 1Segamat Shopping Centre. (Source: The Edge Markets)
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