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Share
Price:
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MYR2.05
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Target
Price:
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MYR2.80
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Recommendation:
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Buy
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Something is
brewing?
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In an announcement to Hong Kong Stock Exchange, VSIG (1002
HK, Not-rated) has proposed a 1-for-4 rights issue which could raise
HKD106m-115m, of which HKD44m will be allocated for capacity expansion
in view of multiple large potential contracts from new customers. With
this development, we see further earnings catalysts in VSI’s China ops
which could secure sizeable new contracts in the next 6 months.
Reiterate BUY on VSI with an unchanged MYR2.80 TP (17.5x CY18 PER,
peers average).
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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
|
1,936.9
|
2,175.6
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2,968.4
|
4,022.0
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EBITDA
|
239.2
|
226.4
|
305.5
|
414.3
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Core net profit
|
135.7
|
135.1
|
160.4
|
231.2
|
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Core FDEPS (sen)
|
10.4
|
8.5
|
10.1
|
14.6
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Core FDEPS growth(%)
|
111.8
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(18.2)
|
18.8
|
44.1
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Net DPS (sen)
|
4.8
|
4.7
|
5.2
|
7.0
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Core FD P/E (x)
|
19.6
|
24.0
|
20.2
|
14.0
|
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P/BV (x)
|
3.4
|
3.0
|
2.4
|
2.1
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Net dividend yield (%)
|
2.3
|
2.3
|
2.5
|
3.4
|
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ROAE (%)
|
20.4
|
14.2
|
15.7
|
17.7
|
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ROAA (%)
|
8.0
|
7.0
|
7.5
|
9.3
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EV/EBITDA (x)
|
8.5
|
9.2
|
10.4
|
8.1
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Net debt/equity (%)
|
17.2
|
18.4
|
10.1
|
4.2
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Share
Price:
|
MYR5.53
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Target
Price:
|
MYR5.95
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Recommendation:
|
Hold
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Solid results
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1H17 results were in line with both ours/consensus
forecasts. Management’s monetisation efforts are bearing fruit, with
Maxis having exhibited superior operational trends in recent quarters.
Our earnings forecasts are unchanged. Maintain HOLD with an unchanged
TP of MYR5.95.
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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
|
8,601.0
|
8,612.0
|
8,795.0
|
8,973.7
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EBITDA
|
4,398.0
|
4,469.0
|
4,529.4
|
4,621.5
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Core net profit
|
1,809.5
|
1,927.5
|
1,878.3
|
1,929.8
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Core EPS (sen)
|
24.1
|
25.7
|
24.1
|
24.7
|
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Core EPS growth (%)
|
4.3
|
6.5
|
(6.3)
|
2.7
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Net DPS (sen)
|
20.0
|
20.0
|
20.0
|
20.0
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Core P/E (x)
|
22.9
|
21.5
|
23.0
|
22.4
|
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P/BV (x)
|
9.9
|
8.8
|
6.4
|
6.1
|
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Net dividend yield (%)
|
3.6
|
3.6
|
3.6
|
3.6
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ROAE (%)
|
39.1
|
45.2
|
32.7
|
27.8
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ROAA (%)
|
9.8
|
10.0
|
9.3
|
9.2
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EV/EBITDA (x)
|
13.6
|
12.1
|
11.2
|
10.8
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Net debt/equity (%)
|
205.5
|
194.5
|
108.3
|
96.3
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Chi Wei Tan
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Syairah Malek
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Share
Price:
|
MYR3.66
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Target
Price:
|
MYR3.80
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Recommendation:
|
Hold
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Volume growth to
resume in 2018
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The weaker 2Q17 earnings was within our expectation as
both CMA CGM and UASC moved their volume to PSA. While volume in 3Q17
could still be weaker sequentially, the lower tax rate may fully offset
the weaker revenue. We maintain our HOLD rating and DCF-derived TP of
MYR3.80 (WACC: 6.7%, 2025-2054 growth rate: 2%). We think market has
already priced in WPRTS’ weaker 2Q17, with its share price down 16%
YTD.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
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FY17E
|
FY18E
|
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Revenue
|
1,578.3
|
1,804.3
|
1,731.5
|
1,836.4
|
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EBITDA
|
869.1
|
963.5
|
885.3
|
989.0
|
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Core net profit
|
504.9
|
623.6
|
549.5
|
536.4
|
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Core EPS (sen)
|
14.8
|
18.3
|
16.1
|
15.7
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Core EPS growth (%)
|
(1.4)
|
23.5
|
(11.9)
|
(2.4)
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Net DPS (sen)
|
11.1
|
14.0
|
12.1
|
11.8
|
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Core P/E (x)
|
24.7
|
20.0
|
22.7
|
23.3
|
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P/BV (x)
|
6.6
|
6.0
|
5.7
|
5.3
|
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Net dividend yield (%)
|
3.0
|
3.8
|
3.3
|
3.2
|
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ROAE (%)
|
27.6
|
32.1
|
25.7
|
23.6
|
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ROAA (%)
|
12.8
|
14.9
|
12.1
|
11.2
|
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EV/EBITDA (x)
|
17.0
|
16.0
|
15.6
|
13.8
|
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Net debt/equity (%)
|
39.7
|
35.3
|
58.8
|
49.4
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Share
Price:
|
MYR43.88
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Target
Price:
|
MYR47.10
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Recommendation:
|
Hold
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The worst could
be over
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|
2Q17 results were in line. While illicit cigarette
incidence remains high, it fell 1ppt QoQ in market share in 2Q17 to
58%. We believe that much of the further recovery in legal industry
volumes would depend on Custom’s continuous effort in addressing the illicit
issue. BAT’s restructuring plans may also provide some support to
earnings in the medium term.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Revenue
|
4,581.5
|
3,756.4
|
3,107.0
|
3,189.9
|
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EBITDA
|
1,277.3
|
929.9
|
802.0
|
850.3
|
|
Core net profit
|
914.5
|
675.1
|
606.4
|
644.0
|
|
Core EPS (sen)
|
320.3
|
236.4
|
212.4
|
225.6
|
|
Core EPS growth (%)
|
0.5
|
(26.2)
|
(10.2)
|
6.2
|
|
Net DPS (sen)
|
312.0
|
278.0
|
208.1
|
221.1
|
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Core P/E (x)
|
13.7
|
18.6
|
20.7
|
19.5
|
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P/BV (x)
|
22.9
|
20.4
|
20.0
|
19.6
|
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Net dividend yield (%)
|
7.1
|
6.3
|
4.7
|
5.0
|
|
ROAE (%)
|
170.0
|
124.4
|
97.9
|
101.9
|
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ROAA (%)
|
73.4
|
56.2
|
52.2
|
56.5
|
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EV/EBITDA (x)
|
12.8
|
13.8
|
15.7
|
14.8
|
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Net debt/equity (%)
|
50.5
|
15.8
|
10.8
|
9.7
|
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MACRO RESEARCH
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Can NASDAQ Index Climb Higher?
by Nik
Ihsan Raja Abdullah
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FBMKLCI closed marginally lower yesterday, falling
1.64pts to 1,755.63. Market breadth turned negative, with losers
outpacing gainers by 465 to 373. A total of 1.72b shares worth
MYR2.01b changed hands. The benchmark index is still in a
consolidation mode amid a lack of positive catalyst. With US markets
ended mixed overnight and uncertainty over ECB’s tightening measures,
expect local bourses to remain choppy. We expect the benchmark index
to trade between 1,750 and 1,565 today.
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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: Jobless claims at nine-week low reflect shortage of
workers. The lowest level of filings for U.S. unemployment benefits in
about two months may reflect growing demand for workers in a tight job
market, Labor Department figures showed. Jobless claims decreased by 15k
to 233k (forecast was 245k); level in February was lowest since early
1970s. Continuing claims increased by 28k to 1.98m in week ended July 8
(data reported with one-week lag). Four-week average of initial claims, a
less- volatile measure than the weekly figure, fell to 243.8k from 246k
in prior week. (Source: Bloomberg)
U.S: Americans’ expectations about the economy
deteriorated in July to an eight-month low as fewer households viewed
conditions as improving, according to figures from the Bloomberg Consumer
Comfort Index released. Monthly measure of economic expectations fell to
47 in July from 52 in June. Share of respondents who say economy getting
better dropped to 28% and 32% said it was getting worse. Weekly consumer
comfort measure crept up to 47.6 from 47. Gauge of personal finances
increased to 57.4 last week from 56.2, which was the lowest since early
February. (Source: Bloomberg)
E.U: The European Central Bank deferred the delicate
decision of how and when to venture the next step toward policy
normalization until later this year. The Governing Council repeated that
it expects borrowing costs to stay at present levels for an extended
period of time and that it is prepared to increase the size or duration
of the asset-purchase program should the economy take a turn for the
worse. The ECB maintained its deposit rate at minus 0.4%, kept the main
refinancing rate at zero and retained its commitment to buy EUR60b
(USD69b) of debt a month until at least the end of the year. (Source: Bloomberg)
Indonesia: Bank Indonesia left its benchmark interest rate
unchanged, as inflation stays within the target band and the currency
strengthens. Governor Agus Martowardojo and his board held the seven-day
reverse repurchase rate at 4.75%. The bank has been on hold since its
last rate cut in October. Bank Indonesia cut interest rates six times
last year and eased reserve limits on lenders in July to help spur
lending and support economic expansion. (Source: Bloomberg)
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Other News:
Kerjaya Prospek: Wins MYR64m jobs. Its unit has won a
MYR64.22m work of contract to undertake foundation piling works and
associated sub-structure works for a proposed mixed development, in a
related-party transaction .The construction works to be undertaken by
KPSB is expected to commence on Aug 2 and due to be completed on Oct 1,
2018. (Source: The Star)
Bina Darulaman: Launches two projects in Kedah with
MYR2.6b GDV. The group has launched two integrated township projects in
Kedah with an estimated combined gross development value of MYR2.6b.The
projects, dubbed Darulaman Saujana in Jitra and Darulaman Putra in Sungai
Petani, are expected to be completed in 10 years. The 203-acre Darulaman
Saujana project, carrying MYR1b GDV, is slated for launch at the end of
2017. Meanwhile, the Darulaman Putra project have an estimated GDV of
MYR1.6b (Source: The Sun Daily)
Gabungan AQRS: Ropes in Singapore firm to develop One
Jesselton Waterfront. The group has inked a Memorandum of Understanding
with Singapore's Tera Capital Pte Ltd to jointly develop its One
Jesselton Waterfront mixed development in Kota Kinabalu, Sabah. Gabungan
AQRS will develop the hotel and serviced suites portion of the
development. Meanwhile, Tera Capital will bring in a "partner-contractor"
to form a joint venture with Gabungan AQRS's wholly-owned subsidiary,
Gabungan Strategik S/B, for the construction of the project. (Source: The
Edge Financial Daily
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