| | 
| | | |
| | |
| | | | | | | | | | | | | | | | Share Price: | MYR6.01 | Target Price: | MYR6.20 | Recommendation: | Hold | | |
|
|
| | | Vertical and horizontal expansion | | Strong 4QFY17 net profit (+27% QoQ, +50% YoY) was mainly boosted by low tax rate. While the organic growth momentum may sustain, the higher tax rate sequentially may result in weaker bottomline in 1QFY18. We maintain our FY18-19 EPS forecasts and introduce FY20. Downgrade the stock to HOLD (from BUY) given the reduced upside to our unchanged TP of MYR6.20 (20x 2018 PER; +1SD to mean). | | |
|
| | FYE Aug (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,888.5 | 3,409.2 | 3,746.6 | 4,036.4 | EBITDA | 523.3 | 485.0 | 567.1 | 614.1 | Core net profit | 361.1 | 332.7 | 370.4 | 403.9 | Core EPS (sen) | 29.1 | 26.8 | 29.9 | 32.6 | Core EPS growth (%) | 29.0 | (7.9) | 11.3 | 9.0 | Net DPS (sen) | 14.5 | 14.5 | 14.9 | 16.3 | Core P/E (x) | 20.6 | 22.4 | 20.1 | 18.5 | P/BV (x) | 4.1 | 3.7 | 3.4 | 3.1 | Net dividend yield (%) | 2.4 | 2.4 | 2.5 | 2.7 | ROAE (%) | 21.1 | 17.4 | 17.6 | 17.6 | ROAA (%) | 13.5 | 11.9 | 12.1 | 12.3 | EV/EBITDA (x) | 9.5 | 14.2 | 13.0 | 11.8 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
| |
| | | |
| | | | | | MACRO RESEARCH | | | | | | | Sustained consumer spending momentum
by Suhaimi Ilias |
|
|
|
| | | | | | Distributive trade eased in Aug 2017 to +7.9% YoY (July 2017: +9.4% YoY) on moderation in wholesale trade (Aug 2017: +6.2% YoY; Jul 2017: +6.8% YoY), retail trade (+11.9% YoY; Jul 2017: +13.0% YoY) and motor vehicle trade (Aug 2017: +1.4% YoY; Jul 2017: +7.0% YoY). But Jul-Aug 2017's retail trade growth was firmer at +12.4% YoY (2Q 2017: +11.5% YoY), pointing to sustained consumer spending growth last quarter. | |
| |
| | | | |
| | | | | | | | BM CONSTRUCTION INDEX – Rebound likely underway
by Nik Ihsan Raja Abdullah |
|
|
|
| | | | | | Late buying support on selective blue chips like IHH, HLBK and ROTH lifted FBMKLCI 1.32pts higher at 1,755.32 on Friday. Market breadth was positive, with gainers outpacing loser by 452 to 396 while another 417 counters remained unchanged. A total of 3.2b shares worth MYR2.0b changed hands. Sentiment could stay choppy in the early going as investors await China consumer and producers price data. | |
| |
| | | | |
| |
| | NEWS | | | Outside Malaysia:
U.S: Yellen sees economic strength warranting gradual rate hikes. Federal Reserve Chair Janet Yellen said that the U.S. central bank expects to continue to raise interest rates gradually as solid growth; a strong labor market and a healthy global economy lift prices even as she recognized that inflation has been surprisingly low. "My best guess is that these soft readings will not persist, and with the ongoing strengthening of labor markets, I expect inflation to move higher next year," Yellen said at the Group of Thirty's Annual International Banking Seminar in Washington. (Source: Bloomberg)
U.S. Inflation picks up on fuel costs while core gauge slows. A spike in energy prices in the aftermath of Hurricane Harvey boosted the U.S. cost of living by the most since January, while inflation excluding food and fuel was below estimates, a Labor Department report showed. Consumer price index rose 0.5% MoM after then 0.4% MoM advance the prior month; up 2.2% YoY. Excluding food and energy, so-called core CPI rose 0.1% MoM and 1.7% YoY. (Source: Bloomberg)
China: Credit growth exceeds estimates despite debt curb vow. China's broadest gauge of new credit exceeded projections, signaling that the funding taps remain open even as the government pushes to curb excessive borrowing. Aggregate financing stood at CNY 1.82tr (USD 276b) in September, the People's Bank of China said, compared with CNY 1.48tr the prior month. New yuan loans stood at CNY 1.27tr while broad M2 money supply increased 9.2% YoY, picking up from the prior record low. (Source: Bloomberg)
Thailand: Bank of Thailand rebuffs government by keeping rate on hold. Thailand's already "very accommodative" monetary policy is fueling robust growth that's spreading across the economy, said Bank of Thailand Governor Veerathai Santiprabhob. The outlook comes as an exports revival in Thailand gains momentum despite a recent rise in the nation's currency, the baht. Better demand from key trading partners is helping to offset strength in the exchange rate, Veerathai said. At the same time, headline inflation is likely to accelerate towards the central bank's target range, underscoring the effectiveness of the monetary authority's inflation targeting regime, he said. "We have seen increasing confidence in the recovery of the Thai economy and improving investor confidence," Veerathai said in an interview in Washington, noting flows from overseas into the nation's stocks and bonds. "The monetary policy committee believes that current monetary conditions are very accommodative." (Source: Bloomberg)
Philippine: Central Bank Governor sees no need to tighten for now. Philippine central bank Governor Nestor Espenilla said contained inflation means there isn't a need to increase interest rates in the near term. "Right now there is no need to move policy rates looking at the inflation outlook," Espenilla said in Washington where he was attending the annual International Monetary Fund meetings. "It might be too much of an anticipation to say we will raise interest rates at the next review." (Source: Bloomberg) | |
| | | | | Other News:
Kim Loong: To expand into bio-gas power supply. The company's expansion plan to supply biogas-based power for sale to TNB's electricity grid is poised to take off soon. According to managing director Gooi Seong Heen, the group is expected to supply 1.8MW generated from its Kota Tinggi mill in Johor to the national grid by end of this year. He said: "Our Kota Tinggi mill is close to completing the installation and commissioning of the power plant. It has been Kim Loong's plan to generate power from biogas for sale to Tenaga and SESB grid from all its mills, Kota Tinggi in Johor as well as Keningau and Telupid in Sabah, explained Gooi. "Upon successful implementation, at full capacity, we hope to receive about MYR6m per year from each mill. (Source: The Star)
Scientex: Expects growth from major investments. The company is cautiously optimistic about its prospects for the current financial year but still expects to see an improvement in both the bottom line and top line performances. According to the Managing Director Lim Peng Jin, the better revenue and profits would be driven by both the manufacturing and property businesses. Elaborating on the manufacturing segment, export sales accounts for about 70% of the business in FY17 with the percentage expected to rise to 75% in the future. Limsaid the group's new stretch film facility in Arizona in the US is on track to commence its operations early next year. The two lines will take about two years to be fully utilized, and at full utilization, the plant will be able to produce up to 30,000 tonnes of stretch film per annum. (Source: The Edge Financial Daily)
Sarawak Cable: Targets higher sales of newer products. The company expects its manufacturing division to see improved margins this year, as the company targets higher sales of newer products. The group's cable manufacturing business contributed 84% of total revenue during the first half of this year, up from 52% from the same corresponding period last year. "The cables segment will continue its good contribution to group turnover and profits in the second half of the year," group managing director and chief executive officer Aaron Toh Chee Ching told StarBiz. He said besides the new products which command higher profit margins, SCB had via optimising the group's production capacity reduced wastages and lowered production costs. (Source: The Star)
Oriental Food: Seeks growth via biscuit venture. The company, which is a snack food and confectionery maker is venturing into biscuit production as part of its long-term growth plan. According to the executive director Datuk Son Tong Leong, the group is in the midst of finalizing the formula for the biscuit, with the launch of the first range of biscuit products targeted for next month. Tong Leong said the company's new venture is a natural progression in the continued growth of the group. (Source: The Edge Financial Daily) | |
| |
| | | | | Disclaimer | | | This email and its attachment(s) are confidential and are intended solely for the use of the individual to whom it is addressed. Any views or opinions expressed are solely those of the author and do not necessarily represent those of Maybank Kim Eng or any of its affiliates. Intended recipients of this email are prohibited from disseminating, forwarding, printing and/or copying its contents. If you are not the intended recipient of this email, you are strictly prohibited to take any action based upon them, which also includes dissemination, forwarding, printing and copying of its contents. Maybank Kim Eng Research sent this e-mail to you because your Notification Preferences indicate that you want to receive information about our daily research reports. If you wish to read Disclaimer in details, please click HERE. | | | To unsubscribe or change preference settings, please click here to contact your representative. | | | | |
|
|
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.