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Sunway (SWB MK)
by Wei Sum
Wong
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Share
Price:
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MYR3.73
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Target
Price:
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MYR4.03
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Recommendation:
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Hold
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An all rounder
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We are neutral on Sunway’s proposed bonus issue of new
shares which would improve share affordability and free warrants which
would allow Sunway to expand using proceeds from the warrants exercise.
But, we are positive on Sunway’s long-term plans for its healthcare
unit which could lead to the latter’s eventual listing. We maintain our
earnings forecasts but raise RNAV-TP by 58sen (+17%) to MYR4.03 on
revised 0.7x P/RNAV peg (from 0.6x P/RNAV). Maintain HOLD.
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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
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4,448.4
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4,725.9
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5,579.1
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6,630.5
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EBITDA
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427.2
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531.1
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811.0
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1,023.3
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Core net profit
|
590.7
|
547.4
|
543.9
|
607.4
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Core EPS (sen)
|
33.7
|
29.5
|
26.4
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29.4
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Core EPS growth (%)
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(1.6)
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(12.5)
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(10.6)
|
11.7
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Net DPS (sen)
|
37.0
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12.1
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7.9
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8.8
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Core P/E (x)
|
11.1
|
12.7
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14.1
|
12.7
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P/BV (x)
|
1.0
|
1.0
|
1.0
|
0.9
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Net dividend yield (%)
|
9.9
|
3.3
|
2.1
|
2.4
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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 (%)
|
4.1
|
3.1
|
2.9
|
3.1
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EV/EBITDA (x)
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21.7
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18.3
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16.0
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13.7
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Net debt/equity (%)
|
45.2
|
40.9
|
52.8
|
61.5
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Share
Price:
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MYR5.84
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Target
Price:
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MYR6.20
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Recommendation:
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Hold
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Lower rubber
price playing out
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Upcoming 3QFY8/17 results could be softer QoQ on weaker
USD/MYR, higher raw material prices and lower sales volume, but still
within our expectation as we expect stronger sequential 4QFY17 earnings
given the sharp fall in raw material prices. We maintain our EPS
forecasts but downgrade the stock to HOLD (from BUY) due to narrowed
upside to our unchanged TP of MYR6.20 (20x 2018 PER, +1SD to mean).
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FYE Aug (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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2,510.5
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2,888.5
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3,364.6
|
3,657.9
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EBITDA
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454.3
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523.3
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510.8
|
573.7
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Core net profit
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279.8
|
361.1
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328.3
|
375.8
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Core EPS (sen)
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22.6
|
29.1
|
26.5
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30.3
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Core EPS growth (%)
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55.0
|
29.0
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(9.1)
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14.5
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Net DPS (sen)
|
11.5
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14.5
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13.2
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15.1
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Core P/E (x)
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25.9
|
20.1
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22.1
|
19.3
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P/BV (x)
|
4.5
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4.0
|
3.7
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3.3
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Net dividend yield (%)
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2.0
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2.5
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2.3
|
2.6
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ROAE (%)
|
19.1
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21.1
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17.3
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18.1
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ROAA (%)
|
12.1
|
13.5
|
11.9
|
12.6
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EV/EBITDA (x)
|
10.1
|
9.5
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13.5
|
11.9
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
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Share
Price:
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MYR1.53
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Target
Price:
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MYR1.70
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Recommendation:
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Buy
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4QFY17: A decent
quarter; U/G to BUY
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4QFY4/17 results and 4th net DPS of 1.0sen (FY17: 3.5sen)
were in line as core earnings YoY growth was mainly attributed to
contributions from new BStarbucks outlets. We tweak FY18-19E earnings
forecasts by <3% but maintain our TP of MYR1.70, pegged to an unchanged
27x FY18 PER. Upgrade to BUY as we believe near-term earnings could
stabilise. BFood currently offers potential capital upside of 11%.
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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
|
554.4
|
605.4
|
671.0
|
747.6
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EBITDA
|
79.5
|
75.2
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95.2
|
107.2
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Core net profit
|
22.3
|
18.9
|
24.3
|
33.0
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Core FDEPS (sen)
|
5.9
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5.0
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6.4
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8.7
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Core FDEPS growth(%)
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(13.7)
|
(15.3)
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28.3
|
36.8
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Net DPS (sen)
|
4.3
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3.5
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3.4
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4.6
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Core FD P/E (x)
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26.1
|
30.9
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24.0
|
17.6
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P/BV (x)
|
1.4
|
1.5
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1.5
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1.4
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Net dividend yield (%)
|
2.8
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2.3
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2.2
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3.0
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ROAE (%)
|
5.4
|
2.9
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6.1
|
8.2
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ROAA (%)
|
3.1
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2.5
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3.1
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4.2
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EV/EBITDA (x)
|
11.2
|
11.6
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8.2
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7.3
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Net debt/equity (%)
|
49.3
|
62.3
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58.3
|
55.4
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Share
Price:
|
MYR2.70
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Target
Price:
|
MYR2.60
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Recommendation:
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Hold
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Humdrum 1QFY1/18
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1QFY18 earnings and dividends were within our
expectations. That said, we believe that Pay-TV subscribership may have
eased again after a brief respite in 4QFY17. To be fair, ASTRO gathers
that ARPU and adex will grow YoY going forward. Coupled with less content
cost YoY in 2QFY18 and 3QFY18, we opine that FY18 earnings still ought
to be higher YoY. We trim our FY18/FY19/FY20 earnings estimates by
2%/2%/1% but tweak SOP-TP up by 5sen to MYR2.60 on minor housekeeping
changes.
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FYE Jan (MYR m)
|
FY16A
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FY17A
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FY18E
|
FY19E
|
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Revenue
|
5,475.4
|
5,612.6
|
5,812.4
|
5,901.1
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EBITDA
|
1,940.6
|
1,816.5
|
1,934.7
|
1,998.5
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Core net profit
|
662.0
|
663.4
|
788.2
|
866.1
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Core FDEPS (sen)
|
12.7
|
12.7
|
15.1
|
16.6
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Core FDEPS growth(%)
|
27.3
|
0.2
|
18.5
|
9.9
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Net DPS (sen)
|
12.0
|
12.5
|
12.5
|
13.7
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Core FD P/E (x)
|
21.3
|
21.2
|
17.9
|
16.3
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P/BV (x)
|
23.4
|
22.6
|
18.5
|
15.4
|
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Net dividend yield (%)
|
4.4
|
4.6
|
4.6
|
5.1
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ROAE (%)
|
95.1
|
101.9
|
113.9
|
103.6
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ROAA (%)
|
9.7
|
10.1
|
11.8
|
12.4
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EV/EBITDA (x)
|
9.1
|
9.5
|
9.2
|
8.9
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Net debt/equity (%)
|
516.4
|
481.0
|
502.9
|
404.2
|
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Share
Price:
|
MYR2.33
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Target
Price:
|
MYR2.45
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Recommendation:
|
Hold
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2QFY17: Tracking
expectations
|
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2QFY10/17 results were in line. Store openings remain on
track with an addition of 31 stores in 6MFY17. Our earnings forecasts
and TP of MYR2.45 are unchanged as we continue to peg the stock to 26x
CY18 earnings. Following its share price gain of 40% YTD, we believe
that the stock is fairly valued for now. We now rate Bison a HOLD.
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FYE Oct (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
217.5
|
263.6
|
320.1
|
386.3
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EBITDA
|
21.0
|
27.1
|
33.1
|
42.3
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Core net profit
|
13.5
|
19.3
|
24.5
|
29.1
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Core EPS (sen)
|
4.4
|
6.2
|
7.9
|
9.4
|
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Core EPS growth (%)
|
9.5
|
42.6
|
27.3
|
18.8
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Net DPS (sen)
|
0.2
|
1.5
|
2.0
|
2.0
|
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Core P/E (x)
|
53.4
|
37.5
|
29.4
|
24.8
|
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P/BV (x)
|
13.0
|
4.7
|
4.2
|
3.7
|
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Net dividend yield (%)
|
0.1
|
0.6
|
0.9
|
0.9
|
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ROAE (%)
|
27.6
|
17.4
|
15.2
|
16.0
|
|
ROAA (%)
|
14.9
|
12.7
|
11.3
|
11.7
|
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EV/EBITDA (x)
|
na
|
17.2
|
20.4
|
16.0
|
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Net debt/equity (%)
|
4.6
|
net cash
|
net cash
|
net cash
|
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MACRO RESEARCH
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S&P 500 Index going distance
by Nik
Ihsan Raja Abdullah
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FBMKLCI rose 7.91pts to close at 1,792.35 yesterday,
led by gains in key blue chips like GENT, GENM and CIMB. Market
sentiment has improved with gainers outpacing losers by 483 to 381.
Market turnover, however, declined to 1.95b shares worth MYR2.49b. Taking
cue from mixed US market and weaker oil price, expect local bourses
to be choppy today. Technically, the benchmark could extend its
upward momentum and test the 1,800 psychological level soon.
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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: Fed forges on with hike, asset plan amid inflation
concern. Federal Reserve officials forged ahead with an interest-rate
increase and additional plans to tighten monetary policy despite growing
concerns over weak inflation. Policy makers agreed to raise their
benchmark lending rate for the third time in six months, maintained their
outlook for one more hike in 2017 and set out some details for how they
intend to shrink their USD 4.5tr balance sheet this year. In a press
conference after the decision was announced, Fed Chair Janet Yellen said
the unwinding plan could be put into effect “relatively soon” if the
economy evolves as the central bank expects. “Near-term risks to the
economic outlook appear roughly balanced, but the committee is monitoring
inflation developments closely,” the Federal Open Market Committee said
in a statement. “The committee currently expects to begin implementing a
balance sheet normalization program this year, provided that the economy
evolves broadly as anticipated.” (Source: Bloomberg)
U.K: Squeeze tightens as wages grow at slowest pace in two
years. The squeeze on U.K. households intensified in the three months
through April as wage growth lagged further behind inflation. Average
earnings rose 1.7%, the slowest annual pace for more than two years, the
Office for National Statistics said. But they fell 0.6% after inflation
is taken into account, the largest drop since August 2014. In April
alone, they fell 0.7%. (Source: Bloomberg)
Crude Oil: Holds losses on surprise U.S. gasoline supply
gain. Motor fuel stockpiles expanded by 2.1 million barrels last week,
the Energy Information Administration reported. Most analysts surveyed by
Bloomberg had forecast a decline. Crude output rose while nationwide
inventories fell less than predicted. Oil has declined almost 8% this
month amid speculation increasing U.S. supplies will offset production
curbs by the Organization of Petroleum Exporting Countries and its allies
including Russia. New supplies from OPEC rivals will be more than enough
to meet demand growth next year, the International Energy Agency said in
its first forecast for 2018. Brent for August settlement slid to USD
47/bbl. (Source: Bloomberg)
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Other News:
Bumi Armada: Inked JV to secure FPSO project in Ghana. The
offshore oilfield services provider has inked a JV with two parties,
Shapoorji Pallonji and Co Pvt Ltd (SPCL) and Cypress Energy Company
Limited (CECL), to secure the award of a floating, production, storage
and offloading (FPSO) project in Ghana. The JV company, which is known as
Bumi Armada Shapoorji Pallonji Ghana Ltd (BASPG) was established on June
5 between Bumi Armada’s wholly-owned subsidiary, Bumi Armada Marine
Holdings Ltd (BAMHL), SPCL’s wholly-owned subsidiary Shapoorji Pallonji
Oil and Gas Pvt Ltd (SPOG), and CECL, Bumi Armada said in a filing with
Bursa Malaysia yesterday. The JV will see BAMHL, SPOG and CECL combining
their capabilities and expertise, with each party holding 45%, 45% and
10% stakes respectively. (Source: The Edge Markets)
JAG: Sees 30% revenue growth for FY17. The company expects
revenue to grow by up to 30% this year from a year earlier on more
electronic-waste (e-waste) management contracts. Chairperson and
executive director Datin Stacey Tan told reporters that JAG had secured
40% more e-waste contracts, and that management hopes to register at
least MYR100m in revenue for financial year ending Dec 31, 2017 (FY17).
Tan said JAG, which recently made its foray into property development,
expects to equalise the company's e-waste and property development income
contribution. She said the group aims to launch up to three projects
within five years and expand its landbank. (Source: The Edge Markets)
Stone Master: Feud far from over. The Kuala Lumpur High
Court has ruled in favour of marble and granite products maker Stone
Master Corp Bhd's major shareholders, indicating that the EGM held on May
30 was valid. The latest ruling, however, sees the immediate removal of
Stone Master's managing director Datuk Koh Mui Tee and executive director
Datuk Lee Hwa Cheng from the company's board of directors and the
company. At the same time, it sees the appointment of eight new
directors, namely Ma Jee Choong, Datuk Abdul Aziz Mohamed, Low Eng Tack,
Ng Boon Siong, Tan Wee Hock, Ananda Kumar Ramayah, Foo Chooi Wai and
Leong Kam Soon. The court this morning set aside an ex-parte injunction
order that had been granted to Koh on June 2 that prevented the
implementation of the resolutions passed at Stone Master's recent EGM.
(Source: The Edge Markets)
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