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| | | | | | | | | | | | | | | | Share Price: | MYR1.44 | Target Price: | MYR1.10 | Recommendation: | Sell | | |
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| | | On its path to recovery? | | 2Q17 SSSG (+2.4%) has turned positive after eight quarters of flat/ negative SSSG while EBIT margins have expanded after three consecutive quarters of contraction. While we understand that its 18-months "Back to Basics" exercise, which was unveiled end-July 2017, could benefit it in the medium term, execution remains key. We make no changes to our earnings forecasts, expecting a stronger 2H17 on cost efficiencies and new stores growth. | | |
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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) | 31.6 | 32.7 | 43.0 | 33.6 | P/BV (x) | 10.4 | 50.1 | 31.7 | 21.5 | Net dividend yield (%) | 3.3 | 3.3 | 1.2 | 1.5 | 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 | 15.6 | 13.3 | Net debt/equity (%) | net cash | 188.2 | 88.5 | 7.5 |
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| | | | | | | | | | | | | | Share Price: | MYR1.07 | Target Price: | MYR1.14 | Recommendation: | Hold | | |
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| | | 2Q17: Briefing update | | Outstanding orderbook of MYR2.7b as of end-June 2017 presents decent earnings visibility. EVSD is also targeting MYR2b of new job wins in FY17. However, overhang on the stock remains, from its high receivables and net gearing due to the financing structure of its lift boats. Delivery of the first lift boat could be a re-rating catalyst. No change to our earnings forecasts and TP of MYR1.14 pegged to 12x FY18E PER (-0.5 SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,788.8 | 1,574.6 | 1,872.8 | 1,745.2 | EBITDA | 124.3 | (182.1) | 167.3 | 175.8 | Core net profit | 47.5 | (80.6) | 65.7 | 73.5 | Core EPS (sen) | 6.1 | (10.4) | 8.5 | 9.5 | Core EPS growth (%) | 100.0 | nm | nm | 11.8 | Net DPS (sen) | 0.5 | 0.0 | 0.7 | 0.8 | Core P/E (x) | 17.4 | nm | 12.6 | 11.3 | P/BV (x) | 0.7 | 0.9 | 0.9 | 0.8 | Net dividend yield (%) | 0.5 | 0.0 | 0.7 | 0.7 | ROAE (%) | 5.5 | (25.6) | 7.1 | 7.4 | ROAA (%) | 2.0 | (2.8) | 2.1 | 2.2 | EV/EBITDA (x) | 10.2 | nm | 9.9 | 9.1 | Net debt/equity (%) | 58.9 | 87.0 | 81.3 | 68.5 |
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| | | | | | MACRO RESEARCH | | | | | | | Status quo OPR
by Suhaimi Ilias |
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| | | | | | BNM kept the Overnight Policy Rate (OPR) at 3.00% after its MPC meeting on 6-7 Sep 2017. Monetary Policy Statement (MPS) continues to reflect BNM outlook of better-than-expected growth this year with moderating inflation. Maintained our view that OPR will stay at 3.00% at the final MPC meeting for the year on 8-9 Nov 2017, followed by a modest +25bps hike in 2018. | |
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| | | | | | | | FBMMES Index: Improving Sentiment
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI soared 10.50pts to 1,782.98 yesterday thanks to late buying support in selected index-linked stocks like BAT, ASTRO and CIMB. Broader market was also in a jovial mood with gainers outpacing losers by 533 to 317. A total of 2.62b shares worth MYR2.41b changed hands. With overnight US markets ended mixed, coupled with possible profit taking ahead of weekend break, we expect FBMKLCI to trade between 1,775 and 1,790 today. Downside supports are 1,748 and 1,729. | |
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| | NEWS | | | Outside Malaysia:
U.S: Jobless claims surged last week by the most since November 2012 as tens of thousands of Texans displaced by Hurricane Harvey filed applications to collect benefits, according to Labor Department figures. Initial jobless claims increased by 62k to seasonally adjusted 298k. Applications filed in Texas surged by an unadjusted 51,637 from the previous week to 63,742. (Source: Bloomberg)
E.U: The European Central Bank opted to keep its stimulus settings unchanged for now as officials started cautiously sketching out the future of their quantitative-easing program. Policy makers maintained asset purchases at EUR60b (USD72b) a month until December, and reiterated their pledge to increase the size or duration if the economy worsens. They left interest rates unchanged and repeated that they expect borrowing costs to stay at present levels until well past the end of net asset buying. (Source: Bloomberg)
E.U: Consumer spending and investment drove economic growth in the euro area in the second quarter, adding to signs of a strengthening domestic recovery. Household consumption contributed 0.3 percentage point to GDP, with investment adding 0.2 point, the European Union's statistics office said. The 19-nation economy expanded 0.6% from the first quarter, unrevised from an earlier estimate. In the second quarter, household consumption and government spending each rose 0.5% from the previous three months, according to the report. (Source: Bloomberg)
Germany: Industrial production stagnated in July as momentum slowed after a stellar performance in the first half of the year. Output, adjusted for seasonal swings and inflation, was unchanged from June, when it dropped 1.1%, the Economy Ministry said. The typically volatile reading compares with forecasts for a 0.5% gain. Production was up 4% from a year earlier. The German economy grew 0.6% in the second quarter. (Source: Bloomberg)
China: Foreign -exchange reserves posted a seventh straight gain in August as the yuan rose in its best monthly performance in at least a decade. Stockpile climbed USD11b to USD3.09t, the People's Bank of China said. (Source: Bloomberg) | |
| | | | | Other News:
Mitrajaya: Bags two construction jobs worth MYR377.45m. Its wholly-owned unit Pembinaan Mitrajaya S/B has won two construction projects in Kuala Lumpur and Selangor for a combined contract sum of MYR377.45m. The first contract, worth MYR333.55m, is to develop an academic building and a car park for a higher learning institution in Kuala Lumpur by Sept 2019. The second contract was awarded by Gema Padu S/B to develop affordable housing in Sepang under the Rumah Selangorku scheme for MYR43.91m, which should be completed by Aug 2020. (Source: The Edge Financial Daily)
AZRB: Bags MYR221.9m substructure work contract for BBCC. The group has bagged a contract worth MYR221.9m to undertake substructure works for Bukit Bintang City Centre (BBCC). The contract — scheduled to be completed in 28 months — was awarded by BBCC Development S/B With the new contract, AZRB said its current orderbook stands at MYR3.7b.(Source: The Edge Financial Daily)
Amanahraya REIT: Buys Intermark's Vista Tower for MYR455m. The group is acquiring Vista Tower, a 63-storey office building, from The Intermark Sdn Bhd for MYR455m in cash — funded via a medium-term note programme.The REIT's management company, AmanahRaya-Kenedix REIT Manager Sdn Bhd, said that the purchase consideration was below the market value, estimated at about MYR523m,based on the investment method. (Source: The Edge Financial Daily) | |
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