STOCK FOCUS OF THE DAY
Bermaz Auto : On the climb Buy
We maintain BUY on Bermaz Auto (BAuto) with an unchanged FV of RM2.30 based on an FY18F PE of 13x. 1QFY18 core net profit of RM23mil lagged behind our full-year projection of RM199mil and consensus' estimate of RM183mil. However, we maintain our numbers in anticipation of better results in the second half of FY18 premised on stronger sales and margins.
We note three main points from this set of earnings. First, revenue climbed for the second quarter from the trough in 3QFY17 (November 2016-January 2017). Second, the company's bottomline in 1QFY18 was hit by the move to clear out the existing CX-5 with various sales incentives. Third, company will pay a smaller dividend in tandem with the lower earnings, but the payout ratio is higher this time around. It proposed a dividend of 1.5 sen/share (half of the 3.0 sen paid for 1QFY17), but this translated into a higher payout ratio of 86% (vs. 84% in 1QFY17).
Others :
Banking Sector : 2Q17 Earnings Report Card: Provisions higher than previous quarter Overweight
Plantation Sector : Inventory up 8.8% MoM in August Neutral
STOCK ON RADAR
Excel Force MSC, Eonmetall Group, Astino, Insas
ECONOMIC HIGHLIGHT
Malaysia – Strong exports but lukewarm domestic activities
NEWS HIGHLIGHTS
Highway operators : PLUS receives takeover offer from Maju Holdings
Oil & Gas Sector : Oil price rises as US refineries restart, Irma wanes
MAHB : Passenger traffic up 7.8% y-o-y in August
Ibraco : Kuching-based Ibraco eyes project in the Klang Valley
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