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Share
Price:
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MYR17.64
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Target
Price:
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MYR18.30
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Recommendation:
|
Hold
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2Q17: Earnings
in line
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2Q17 results were in line. While demand may remain subdued
in the near term, we believe that HEIM’s ongoing cost management drive
and initiatives (eg. global procurement) with Heineken N.V. could help
support earnings and margins in the near term. Our earnings forecasts
and DCF-TP of MYR18.30 are unchanged.
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FYE Jun (MYR m)
|
FY15A
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FY16A
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FY17E
|
FY18E
|
|
Revenue
|
1,748.9
|
2,810.3
|
1,918.0
|
1,993.3
|
|
EBITDA
|
329.0
|
620.4
|
437.8
|
455.1
|
|
Core net profit
|
214.2
|
427.3
|
289.5
|
303.2
|
|
Core EPS (sen)
|
70.9
|
141.4
|
95.8
|
100.4
|
|
Core EPS growth (%)
|
8.1
|
99.5
|
(32.2)
|
4.7
|
|
Net DPS (sen)
|
71.0
|
145.0
|
95.0
|
100.0
|
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Core P/E (x)
|
24.9
|
12.5
|
18.4
|
17.6
|
|
P/BV (x)
|
14.2
|
13.6
|
13.0
|
12.5
|
|
Net dividend yield (%)
|
4.0
|
8.2
|
5.4
|
5.7
|
|
ROAE (%)
|
58.4
|
111.2
|
72.1
|
72.5
|
|
ROAA (%)
|
30.7
|
57.1
|
36.4
|
37.8
|
|
EV/EBITDA (x)
|
13.2
|
8.1
|
12.1
|
11.6
|
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Net debt/equity (%)
|
6.0
|
17.8
|
net cash
|
net cash
|
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Share
Price:
|
MYR10.50
|
|
Target
Price:
|
MYR10.30
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
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|
Results in-line,
dividend surprises
|
|
Bursa’s 1H17 earnings were in-line but dividend surprised
positively with a special 15sen/shr, above a 1st interim of 20sen/shr.
We make no change to our earnings forecasts, but now expect a total
53.5sen DPS for FY17 (5.1% yield) vs. 38.5sen previously. Our TP is
unchanged as we continue to peg the stock at 25x FY17 PER based on
peers’ average.
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FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
518.5
|
506.8
|
551.8
|
571.1
|
|
EBITDA
|
302.5
|
294.8
|
333.9
|
344.5
|
|
Core net profit
|
198.6
|
193.6
|
221.2
|
228.5
|
|
Core EPS (sen)
|
37.2
|
36.2
|
41.3
|
42.6
|
|
Core EPS growth (%)
|
0.0
|
(2.8)
|
14.1
|
3.3
|
|
Net DPS (sen)
|
34.5
|
34.0
|
53.5
|
40.5
|
|
Core P/E (x)
|
28.2
|
29.0
|
25.5
|
24.6
|
|
P/BV (x)
|
7.0
|
6.5
|
7.0
|
6.9
|
|
Net dividend yield (%)
|
3.3
|
3.2
|
5.1
|
3.9
|
|
ROAE (%)
|
25.6
|
23.2
|
26.5
|
28.2
|
|
ROAA (%)
|
10.6
|
8.6
|
9.1
|
9.3
|
|
EV/EBITDA (x)
|
13.8
|
15.1
|
16.5
|
15.9
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Share
Price:
|
MYR1.20
|
|
Target
Price:
|
MYR1.10
|
|
Recommendation:
|
Sell
|
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“Back to basics”
|
|
Unveiling its “Back to Basics” exercise, more emphasis
will be placed on cost efficiencies moving forward. Execution, however,
is key and we await the delivery of results. Our earnings forecasts are
unchanged. Maintain SELL with an unchanged TP of MYR1.10 (26x CY18 PER,
based on regional peer average).
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|
FYE Dec (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
2,006.3
|
2,103.4
|
2,170.7
|
2,434.1
|
|
EBITDA
|
127.4
|
126.5
|
116.0
|
133.5
|
|
Core net profit
|
55.8
|
54.0
|
41.0
|
52.5
|
|
Core EPS (sen)
|
4.6
|
4.4
|
3.3
|
4.3
|
|
Core EPS growth (%)
|
(3.3)
|
(3.3)
|
(24.0)
|
28.0
|
|
Net DPS (sen)
|
4.7
|
4.7
|
1.7
|
2.1
|
|
Core P/E (x)
|
26.3
|
27.2
|
35.9
|
28.0
|
|
P/BV (x)
|
8.6
|
41.8
|
26.4
|
17.9
|
|
Net dividend yield (%)
|
3.9
|
3.9
|
1.4
|
1.8
|
|
ROAE (%)
|
27.5
|
52.5
|
90.2
|
76.3
|
|
ROAA (%)
|
7.5
|
7.1
|
5.2
|
6.1
|
|
EV/EBITDA (x)
|
13.8
|
14.3
|
13.1
|
11.1
|
|
Net debt/equity (%)
|
net cash
|
188.2
|
88.5
|
7.5
|
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|
MACRO RESEARCH
|
|
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|
|
Crude Palm Oil - Major Bullish Reversal
by Nik
Ihsan Raja Abdullah
|
|
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|
|
|
|
|
|
|
FBMKLCI rose 2.66pts to 1,766.00 amid regional gains.
Rotational buying on selected blue chips like CIMB, Public Bank and
Genting kept the bulls afloat. Nevertheless, broader market remained
negative with losers outpacing gainers by 431 to 275. Trading volume
was at 1.30b shares valued at MYR1.55b. With Wall Street ended higher
overnight after the Federal Reserve signaled that inflation remains
below its target, local bourses could extend its gains today.
|
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Nik Ihsan Raja
Abdullah
|
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|
Tee Sze Chiah
|
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NEWS
|
|
|
Outside Malaysia:
U.S: Fed says balance-sheet unwind to start ‘relatively
soon’. Federal Reserve officials said they would begin running off their
USD4.5t balance sheet “relatively soon” and left their benchmark policy
rate unchanged as they assess progress toward their inflation goal. The
start of balance-sheet normalization -- possibly as soon as September --
is another policy milestone in an economic recovery now in its ninth
year. The Fed bought trillions of dollars of securities to lower
long-term borrowing costs after cutting the main interest rate to zero in
December 2008. “Near-term risks to the economic outlook appear roughly
balanced,” the Federal Open Market Committee said in a statement.
(Source: Bloomberg)
U.S: Pace of new-home sales suggests steady housing strength.
The U.S. housing market is stabilizing near 10-year highs, according to
government data that showed sales of new homes were slightly less than
forecast. Single-family home sales increased 0.8% MoM in June to 610k
annualized pace. Median sales price fell 3.4% YoY to USD 310,800. Supply
of homes crept up to 5.4 months from 5.3 months; 272,000 new houses were
on market at end of June. (Source: Bloomberg)
S. Korea: Economic growth slowed in the second quarter as
expansion in construction investment eased and export volumes fell from
the previous three months. Economists said the slowdown is mostly due to
a base effect from a solid first-quarter performance and that it
shouldn’t be seen as a negative sign for the outlook. GDP expanded 0.6%
QoQ in the second quarter from the previous three months, when it
increased 1.1% QoQ, the Bank of Korea said. (Source: Bloomberg)
Crude Oil: Holds advance as U.S. supplies decrease. Oil
held gains after U.S. crude stockpiles shrank to the lowest levels since
the start of the year, easing a global glut. Energy Information
Administration said that crude inventories declined by 7.21 million
barrels last week to the lowest since Jan. 6. Kuwait agreed to trim
supplies for 2017, joining the U.A.E. in promising to pump less oil after
Saudi Arabia called on OPEC producers to cut more. Brent for September
settlement end the session at USD 50.97/bbl. (Source: Bloomberg)
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Other News:
LBS Bina: Buys MYR63m land in Seri Kembangan for mixed
development project. The group is buying eight acres of leasehold land in
Seri Kembangan, Selangor from Stratmont Development S/B for MYR63m for a
mixed development project. The group plans to develop four towers of
serviced apartments with an estimated gross development value of MYR600m
on the land, with works expected to start in 2018. (Source: The Edge
Financial Daily)
Sunsuria: Sunsuria, Genlin to jointly develop KL site. Its
99.99%-owned subsidiary Sunsuria Gateway S/B has entered into a joint
venture (JV) with Genlin via a shareholders’ agreement to develop two
pieces of freehold land measuring 2.23 acres in Sentul, Kuala Lumpur, for
a mixed project comprising serviced apartments and retail units. Goodwill
Signature S/B, a wholly owned subsidiary of Sunsuria Gateway, has been
identified as the JV vehicle to undertake the development of the land.
Goodwill Signature will also acquire the land from Genlin for MYR28m
cash. (Source: The Sun Daily)
Mieco Chipboard: To buy SYF's chipboard maker to expand
capacity. Mieco Chipboard is taking over SYF Resources’ unit Great
Platform S/B for MYR58.58m. It will finance the purchase via a
combination of bank borrowing and internal funds.The acquisition will help
Mieco Chipboard expand its chipboard production capacity, and enable it
to penetrate into the existing customer base of Great Platform. (Source:
The Edge Financial Daily)
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