Tuesday, August 15, 2017

FW: [Maybank IB] Today's Research - Malaysia-Hap Seng: To dispose of land in Tawau for MYR175.28m. Hap Seng Consolidated is disposing of 10.06 acres (4.07ha) of leasehold land in Tawau, Sabah for MYR175.28m to a related party, Hong Kong-based Lei Shing Ho

 

header

FEATURE
CALLS

Malaysia | Lotte Chemical Titan Holdings
Quality assets at low valuations
Mohshin Aziz

break

COMPANY
RESEARCH

Media Prima | Dividend-less quarter
Samuel Yin Shao Yang

break

MACRO
RESEARCH

Malaysia | Jobless rate stable at 3.4%
Suhaimi Ilias

Malaysia | FBMKLCI – Geopolitical Tension Ease
Nik Ihsan Raja Abdullah

break

COMPANY RESEARCH

Malaysia

Initiation

Lotte Chemical Titan Holdings (TTNP MK)
by Mohshin Aziz

Share Price:

MYR4.70

Target Price:

MYR7.85

Recommendation:

Buy

Quality assets at low valuations

Lotte Chemical Titan (LCT) is an efficient petrochemical manufacturer with access to the high growth ASEAN and North Asian regions. 2017 is a transition year due to scheduled maintenance shutdowns but production should normalise by 4Q17. We forecast lower FY17 core net profit (-14% YoY) and for growth to resume in FY18 (+30% YoY). Pegging to global peers' 2017 EV/EBITDA of 8.2x, we derive a valuation of MYR7.85/share. Initiate BUY.

FYE Dec (MYR m)

FY15A

FY16A

FY17E

FY18E

Revenue

8,147.8

8,136.6

8,003.8

10,523.6

EBITDA

1,548.0

2,193.0

1,769.6

2,468.4

Core net profit

625.9

1,396.5

1,193.5

1,555.9

Core EPS (sen)

36.2

80.8

52.5

68.5

Core EPS growth (%)

nm

123.1

(35.0)

30.4

Net DPS (sen)

5.9

6.9

17.4

22.6

Core P/E (x)

13.0

5.8

9.0

6.9

P/BV (x)

1.3

1.0

0.9

0.8

Net dividend yield (%)

1.2

1.5

3.7

4.8

ROAE (%)

11.3

18.6

11.8

11.9

ROAA (%)

9.4

16.7

10.3

10.7

EV/EBITDA (x)

na

na

4.2

3.6

Net debt/equity (%)

net cash

net cash

net cash

net cash

Malaysia

TP Revision

Media Prima (MPR MK)
by Samuel Yin Shao Yang

Share Price:

MYR0.75

Target Price:

MYR0.82

Recommendation:

Hold

Dividend-less quarter

2Q17 headline and core net profit are within our expectation but way below consensus. There was an absence of an interim dividend. We gather that MPR will be less generous with dividends going forward leading to a cut in our FY17E DPS to nil from 4sen. On that note, we de-rate our target valuation by 0.1x to 0.8x end-FY17 ex-goodwill BVPS from 0.9x. Consequently, our TP is cut to MYR0.82 from MYR0.92.

FYE Dec (MYR m)

FY15A

FY16A

FY17E

FY18E

Revenue

1,427.7

1,289.0

1,195.5

1,260.2

EBITDA

325.8

163.6

103.0

112.8

Core net profit

138.7

38.7

4.7

20.0

Core EPS (sen)

12.5

3.5

0.4

1.8

Core EPS growth (%)

(2.4)

(72.1)

(87.8)

323.1

Net DPS (sen)

10.0

8.0

0.0

1.0

Core P/E (x)

6.0

21.3

174.8

41.3

P/BV (x)

0.5

0.6

0.6

0.6

Net dividend yield (%)

13.4

10.7

0.0

1.3

ROAE (%)

8.6

(3.8)

(9.9)

1.5

ROAA (%)

5.8

1.7

0.2

1.1

EV/EBITDA (x)

4.0

7.5

8.0

7.1

Net debt/equity (%)

net cash

net cash

net cash

net cash

MACRO RESEARCH

MY: Labour Statistics, June 2017

Jobless rate stable at 3.4%
by Suhaimi Ilias

Economics Research

Unemployment rate in June 2017 remained at 3.4% for the fourth consecutive month and in the 3.4%-3.5% range since Dec 2015. Our full-year average unemployment rate forecast is 3.4% (1H 2017: 3.4%; 2016: 3.5%).

MY: TRADERS' ALMANAC

FBMKLCI – Geopolitical Tension Ease
by Nik Ihsan Raja Abdullah

Technical Research

FBMKLCI rose 4.12pts to 1,771.08 yesterday on bargain hunting activities. Market breadth was positive with gainers outpacing losers by 504 to 315. A total of 1.52b shares worth MYR1.69b changed hands. Following gains in overnight US markets amid easing tensions between the US and North Korea, local bourses could join the bandwagon. Market, however, will remain choppy for the week. Technically, we expect FBMKLCI to trade between 1,765 and 1,775 today. Downside supports are 1,748 and 1,729.

NEWS

Outside Malaysia:

U.S: Trump calls for review of China IP policy as trade ties sour. U.S. President Donald Trump asked his top trade official to consider investigating China over how it handles intellectual property, adding to the list of trade irritants between the world's two biggest economies as they work to contain North Korea. Trump signed an executive memorandum directing U.S. Trade Representative Robert Lighthizer to consider investigating China over its IP policies, especially the practice of forcing U.S. companies operating in China to transfer technological know-how. (Source: Bloomberg)

China: Economy loses momentum as factory output, investment slow. China's economy showed further signs of entering a second-half slowdown, as curbs on property, excess borrowing and industrial overcapacity began to bite. Industrial output rose 6.4% YoY in July after June's 7.6% YoY gain. Retail sales expanded 10.4% YoY, compared with 11% YoY in June. Fixed-asset investment in urban areas rose 8.3% YoY in the first seven months. (Source: Bloomberg)

Crude Oil: Halts slide as U.S. stockpiles seen extending drop. U.S. government data is forecasted to show crude stockpiles extended declines during a period of strong seasonal demand, trimming a glut. Crude inventories probably fell by 3.6 million barrels last week, according to a Bloomberg survey before Energy Information Administration data is released. U.S. output at major shale fields is forecast to climb to a record next month, according to a monthly report from the EIA. Brent for October settlement dropped to USD 50.65/bbl. (Source: Bloomberg)

Other News:

UEM Edgenta: To sell OIC stake. UEM Edgenta is selling its 61.2% stake in New Zealand-listed Opus International Consultants Ltd (OIC) for NZD1.78 (MYR5.57) a share or NZD161.1m in all, to unlock the value of the stake it owns in OIC and reduce the group's gearing. UEM Edgenta is selling its OIC stake to Canada-listed WSP Global Inc, which is offering to buy 100% of OIC. Coupled with the ability of OIC to declare and pay dividend of up to NZD0.07 per OIC share, the attractiveness of the offer is further enhanced with a potential effective cash offer price of up to NZD1.85 per OIC share when the full dividend is taken into account. This means gross proceeds for UEM Edgenta could amount to NZD167.4m (about MYR523.9m) for its 61.2% equity stake. (Source: The Edge Financial Daily)

Felda Global Ventures: Keen to participate in ECRL. Felda Global Ventures Holdings (FGV) is keen to participate in the development of the East Coast Rail Link (ECRL) project by offering its expertise in providing integrated logistics services with parties involved in the project. FGV has the advantage to provide logistics services for the project as its facilities are either in or close to Kuantan Port while ECRL's construction would be based in Kuantan before being expanded to Kelantan and Selangor. FGV is looking to support the project in terms of providing transport services to carry equipment and building materials along the entire stretch of the ECRL. (Source: The Sun Daily)

YFG: Gets MYR235m Kajang contract, but loses Rembau job. YFG has bagged a MYR235m contract for the construction of apartments in Kajang, Selangor, but got its MYR245m sub-contract works for the PR1MA homes in Pedas, Rembau, Negri Sembilan terminated. Its wholly owned subsidiary YFG Engineering S/B had on Aug 14 received a letter of award from Pierre Suite (M) S/B for the contract. The project involves the building, and infrastructure and landscaping works of the proposed development of Eco Parkcity apartments. Its completion period is 36 months. (Source: The Sun Daily)

Eco World Development: Issues MYR250m unrated notes. Eco World Development Group's (EW) unit Eco World Capital Assets has issued unrated medium-term notes (MTNs) with a nominal value of MYR250m. The bonds with a five-year tenure were issued on Monday. The proceeds raised would be used by Eco World Capital Assets for its general corporate purposes and/or to refinance any existing or for future financing of EW and/or its subsidiaries and/or joint ventures which the Eco World group is a party to. The notes are part of a MYR500m MTN programme which has a tenure of 15 years from the issue date. (Source: The Star)

Hap Seng: To dispose of land in Tawau for MYR175.28m. Hap Seng Consolidated is disposing of 10.06 acres (4.07ha) of leasehold land in Tawau, Sabah for MYR175.28m to a related party, Hong Kong-based Lei Shing Hong Ltd (LSH). The proceeds will be used to reduce bank borrowings and/or to contribute to the working capital of Hap Seng. The disposal consideration of about MYR400 per sq ft was arrived at on a willing-buyer-willing-seller basis based on a valuation by independent valuer VPC Alliance (Sabah) S/B. (Source: The Edge Financial Daily)

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Related Posts with Thumbnails