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Share
Price:
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MYR0.56
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Target
Price:
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MYR0.72
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Recommendation:
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Buy
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Earnings outlook
& special DPS prospect in-tact
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MCIL reported better earnings performance compared to its
peers as a result of ad resilience in the Chinese SME space. In FY3/18,
improved earnings could be led by ongoing group wide cost control
measures and increased ad revenue from upcoming national events in
Malaysia and Greater China. Notably, the possibility of a special DPS
of up to MYR0.15/shr is reaffirmed, as the funds are ready to be
disbursed pending the EGM, we understand. Our unchanged TP is based on
13x FY17 PER, mean
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FYE Mar (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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1,362.3
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1,338.3
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1,263.2
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1,286.0
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EBITDA
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205.2
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154.2
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170.7
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182.5
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Core net profit
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111.6
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83.0
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95.6
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105.2
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Core EPS (sen)
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6.6
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4.9
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5.7
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6.2
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Core EPS growth (%)
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(22.7)
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(25.7)
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15.2
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10.0
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Net DPS (sen)
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4.3
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3.2
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4.0
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4.4
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Core P/E (x)
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8.5
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11.5
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10.0
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9.1
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P/BV (x)
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1.1
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1.1
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1.2
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1.1
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Net dividend yield (%)
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7.6
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5.6
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7.0
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7.7
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ROAE (%)
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12.9
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7.9
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11.5
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12.8
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ROAA (%)
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7.1
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5.6
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7.1
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8.6
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EV/EBITDA (x)
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5.5
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6.1
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4.2
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3.5
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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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Jade Tam
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Samuel Yin Shao
Yang
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NEWS
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Outside Malaysia:
U.S: Household-wealth gain of USD 2.35tr to fuel
consumers. An increase in U.S. household wealth in the first quarter
shows higher financial-asset and property values are driving an
improvement in consumer finances, figures from the Federal Reserve in Washington
showed. Net worth for households and non-profit groups rose by USD 2.35t,
or 2.5%, to USD 94.84t from previous three months, according to the Fed’s
financial accounts report, previously known as the flow of funds survey.
Value of financial assets, including stocks and pension fund holdings,
rose by USD 1.78t. Household real-estate assets climbed by USD 436.2b;
owner’s equity as share of total real-estate holdings increased to 58.3%
from 57.5%. (Source: Bloomberg)
E.U: The euro-area economy grew faster at the start of the
year than previously estimated as domestic demand bolstered output. GDP
in the currency bloc rose 0.6% in three months through March, the
European Union’s statistics office said, revising it from 0.5%. The
expansion was driven exclusively by spending and investment. Trade didn’t
contribute to growth. (Source: Bloomberg)
Germany: Industrial production rose more than predicted,
with a fourth consecutive increase in manufacturing adding to signs of
underlying strength in Europe’s largest economy. Output, adjusted for
seasonal swings and inflation, jumped 0.8% in April after an upwardly
revised drop of 0.1%, the Economy Ministry said. (Source: Bloomberg)
Japan: Business bankruptcies jumped by the most in nearly
a decade in May, private research firm Tokyo Shoko Research Ltd. said in
a report. Bankruptcies among Japanese companies with at least JPY 10m
(USD 91,000) in debt rose 20% YoY to a total of 802, Tokyo Shoko said. It
was the second straight monthly increase and the biggest since 2008, the
firm said. The number in services sectors climbed 30%, with restaurants
and auto repair shops standing out. Retailers also suffered with a 43%
jump, a fifth consecutive increase. (Source: Bloomberg)
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Other News:
Sapura Energy: Wins contracts worth MYR879m. The company
has bagged four contracts for oil and gas works worth a total of
USD205.96m (MYR879m). The first contract was awarded by main contractor
PT Gunanusa Utama Fabricators for Zawtika Development Project Phase IC.
The second contract is to upgrade offshore single-point mooring
replacement at the Seria Crude Oil Terminal’s oil export system from
Brunei Shell Petroleum Co Sdn Bhd, with the offshore works planned to
commence in April 2018. Meanwhile, the third contract is to undertake
transportation and installation balance subsea works for Oil and Natural
Gas Corp Ltd which are expected to be completed by 2Q17. Lastly, the
contract to undertake the provision of inspection, repair and maintenance
services in the Montara field for PTTEP Asutralasia (Ashmore Cartier) Pty
Ltd, which are expected to be completed by July. (Source: The Edge
Financial Daily)
Mitrajaya Holdings on track to secure MYR1b worth of jobs.
The company is on track to secure its target order book replenishment
ofMYR1b this year, having secured MYR700m so far. Its outstanding order
book stood at MYR1.7b, while tender book is worth MYR3b. Upcoming
projects to be launched by year-end include an MYR24m gross development
value (GDV) commercial project in Pengerang, Johor, and a residential
development in Bukit Beruntung, Selangor, with GDV of MYR20m. (Source:
The Edge Markets)
Asia Bioenergy Technologies Rapid-related subcontract
worth MYR220m. The company’s wholly-owned Asiabio Petroleum Sdn Bhd, has
secured a 30-month subcontracting work worth MYR220m from Tenisha
Construction Sdn Bhd for subcontract works within the Pengerang
Integrated Petroleum Complex. Asiabio Petroleum plans to ink a
subcontract agreement with Tenisha in one month. Works include designing,
erecting, inspecting, maintaining and dismantling of scaffolding and
formwork systems on-site. (Source: The Edge Markets)
AirAsia: Buys additional 10% in Rokki. The company has
upped its stake in Rokki Sdn Bhd which supplies inflight entertainment
and communication systems to the airline, from 73% to 83%. The 10% stake,
acquired for MYR2.5m, would allow the airline to enjoy additional share
of profits, and a higher equity stake for strategic maneuverability, said
the budget carrier. (Source: The Star)
Scomi Engineering: Monorail trains were independently
certified. The company said the KL Monorail four-car train fleet, which
was introduced in December 2014, was independently certified before it
commenced operations. According to Scomi, the trains underwent rigorous
validation process, design reviews and endurance tests either
independently or jointly with Prasarana. It was responding to Rapid Rail
Sdn Bhd (RRML) chief executive officer Datuk Zohari Sulaiman who said
RRML grounded all four-car train sets after it found a few areas of
safety risks. The findings were concurred with by the Land Public
Transport Commission (SPAD). (Source: The Edge Financial Daily)
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