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| | | | | | | | | | | | | | | | Share Price: | MYR3.07 | Target Price: | MYR3.80 | Recommendation: | Buy | | |
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| | | Acquires office tower in TRX | | IJM's acquisition of an office building currently under construction in TRX (with locked-in tenants) bodes well with its aspiration to be an asset owner and would present a recurring income stream upon construction completion. With the construction expected to complete by Dec 2018, we would expect contribution to IJM's earnings from FY3/20 onwards. No change to our earnings forecast pending further information on the lease agreements. Maintain BUY with an unchanged SOP-based TP of MYR3.80. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 5,128.2 | 6,065.3 | 7,192.5 | 7,375.2 | EBITDA | 1,166.7 | 1,125.8 | 1,203.6 | 1,355.3 | Core net profit | 509.3 | 505.1 | 589.6 | 667.4 | Core EPS (sen) | 14.3 | 14.0 | 16.3 | 18.5 | Core EPS growth (%) | (12.5) | (2.0) | 16.7 | 13.2 | Net DPS (sen) | 10.0 | 7.5 | 7.0 | 7.0 | Core P/E (x) | 21.5 | 22.0 | 18.8 | 16.6 | P/BV (x) | 1.2 | 1.2 | 1.1 | 1.1 | Net dividend yield (%) | 3.3 | 2.4 | 2.3 | 2.3 | ROAE (%) | 9.1 | 7.1 | 6.1 | 6.6 | ROAA (%) | 2.6 | 2.5 | 2.8 | 3.1 | EV/EBITDA (x) | 15.4 | 15.5 | 13.7 | 11.9 | Net debt/equity (%) | 40.4 | 35.3 | 34.9 | 29.7 |
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| | | | | | | | | | | | | | Share Price: | MYR2.30 | Target Price: | MYR2.63 | Recommendation: | Buy | | |
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| | | Steady 1QFY6/18 results | | 1QFY6/18 core earnings (+41% YoY) came in line, accounting for 25%/ 23% of our/consensus full-year estimates. Our earnings forecasts are unchanged. We reiterate our penchant on Dialog, for its strong, long-term growth story with steady cashflows and dividends. Dialog is a direct proxy to the expanding RAPID/Pengerang tank terminals play. Our TP is SOP-based. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,534.5 | 3,392.9 | 3,534.3 | 3,668.9 | EBITDA | 385.4 | 475.0 | 461.3 | 486.0 | Core net profit | 261.0 | 328.2 | 353.6 | 444.8 | Core EPS (sen) | 5.0 | 6.1 | 6.6 | 8.3 | Core EPS growth (%) | (0.9) | 20.8 | 7.8 | 25.8 | Net DPS (sen) | 2.2 | 2.6 | 2.8 | 3.6 | Core P/E (x) | 45.6 | 37.7 | 35.0 | 27.8 | P/BV (x) | 4.9 | 4.0 | 3.7 | 3.4 | Net dividend yield (%) | 1.0 | 1.2 | 1.2 | 1.5 | ROAE (%) | 13.4 | 13.4 | 11.0 | 12.8 | ROAA (%) | 6.7 | 6.6 | 6.1 | 7.4 | EV/EBITDA (x) | 20.7 | 21.9 | 28.4 | 26.8 | Net debt/equity (%) | net cash | net cash | 18.1 | 15.0 |
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| | | | | | | | | | | | | | Share Price: | MYR1.00 | Target Price: | MYR1.25 | Recommendation: | Buy | | |
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| | | No major concerns | | 9M17 net profit was in line, as the compensation received at Tj Bin Power (TBP) was offset by higher-than-expected taxes. Operational data has yet to be disclosed (results call is scheduled this morning), but there appears to be no capacity payment shortfall in 3Q17. Our forecasts are unchanged for now. With no apparent negatives in the horizon, we think the risk-reward is favourable. Reiterate BUY, with an unchanged TP of MYR1.25. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 5,302.0 | 6,098.4 | 6,313.8 | 6,058.6 | EBITDA | 2,468.8 | 2,835.6 | 2,720.5 | 2,517.2 | Core net profit | 453.2 | 355.5 | 321.1 | 232.3 | Core EPS (sen) | 9.1 | 7.1 | 6.4 | 4.6 | Core EPS growth (%) | (6.8) | (21.6) | (9.7) | (27.7) | Net DPS (sen) | 7.0 | 7.0 | 7.0 | 5.0 | Core P/E (x) | 11.0 | 14.0 | 15.5 | 21.4 | P/BV (x) | 0.9 | 0.8 | 0.8 | 0.8 | Net dividend yield (%) | 7.0 | 7.0 | 7.0 | 5.0 | ROAE (%) | 9.3 | 6.1 | 5.4 | 4.0 | ROAA (%) | 1.5 | 1.2 | 1.1 | 0.8 | EV/EBITDA (x) | 8.9 | 7.1 | 6.2 | 6.1 | Net debt/equity (%) | 230.4 | 214.1 | 190.6 | 165.2 |
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| | | | | | | | | | | | | | Share Price: | MYR2.83 | Target Price: | MYR2.98 | Recommendation: | Buy | | |
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| | | Unchartered territory | | On the back of strong volume loading in the RF division, 1QFY6/18 revenue and core net profit hit another new high to beat consensus' expectations - 1QFY18 core earnings made up 26%/28% of our/street's full-year forecasts. Our earnings forecasts, MYR2.98 TP (20x CY18 PER – 10% premium to our target PER peg for Malaysian listed technology companies) and BUY rating are unchanged pending briefing today. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,043.1 | 1,176.3 | 1,560.5 | 1,902.0 | EBITDA | 203.7 | 303.8 | 377.9 | 454.8 | Core net profit | 155.8 | 206.4 | 282.1 | 344.8 | Core EPS (sen) | 7.8 | 9.8 | 13.4 | 16.4 | Core EPS growth (%) | 1.7 | 26.5 | 36.7 | 22.2 | Net DPS (sen) | 4.2 | 8.3 | 10.0 | 12.3 | Core P/E (x) | 36.5 | 28.9 | 21.1 | 17.3 | P/BV (x) | 8.3 | 6.8 | 6.2 | 5.6 | Net dividend yield (%) | 1.5 | 2.9 | 3.6 | 4.3 | ROAE (%) | 24.3 | 29.2 | 30.7 | 34.0 | ROAA (%) | 18.2 | 19.9 | 22.9 | 25.9 | EV/EBITDA (x) | 13.8 | 13.3 | 14.7 | 12.1 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR1.44 | Target Price: | MYR1.53 | Recommendation: | Hold | | |
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| | | Secures MYR57m building job | | HSL has won a MYR57m contract for the proposed renovation of the existing X-FAB Administration Building in Kuching. This lifts outstanding orderbook to e.MYR2.56b. We maintain our earnings forecasts pending 3Q17 results release on 23rd Nov. Maintain HOLD with an unchanged TP of MYR1.53 pegged to unchanged 12x FY18 PER (-1 SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 654.7 | 498.5 | 408.8 | 582.7 | EBITDA | 109.2 | 83.7 | 69.5 | 104.0 | Core net profit | 76.2 | 56.5 | 45.1 | 70.0 | Core EPS (sen) | 13.9 | 10.3 | 8.2 | 12.7 | Core EPS growth (%) | (0.9) | (25.9) | (20.2) | 55.2 | Net DPS (sen) | 2.4 | 2.4 | 2.4 | 2.4 | Core P/E (x) | 10.4 | 14.0 | 17.6 | 11.3 | P/BV (x) | 1.2 | 1.1 | 1.1 | 1.0 | Net dividend yield (%) | 1.7 | 1.7 | 1.7 | 1.7 | ROAE (%) | na | na | na | na | ROAA (%) | 9.4 | 6.7 | 5.3 | 7.9 | EV/EBITDA (x) | 8.6 | 9.5 | 9.1 | 5.9 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR17.32 | Target Price: | MYR18.30 | Recommendation: | Hold | | |
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| | | 3Q17: No surprises | | 3Q17 results were in line. HEIM's integration of its procurement processes (since 2H16) and on-going cost management drive should continue to help support earnings in the near term. Introduction of new products could also help further complete its product portfolio. In Aug 2017, HEIM launched Apple Fox, a mainstream cider. We expect a seasonally stronger 4Q. We keep our earnings forecasts and HOLD call with an unchanged DCF-TP of MYR18.30 (WACC: 7.5%, LT growth: 2.0%). | | |
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| | FYE Jun (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,748.9 | 2,810.3 | 1,844.8 | 1,919.2 | EBITDA | 329.0 | 607.2 | 431.0 | 448.4 | Core net profit | 214.2 | 427.3 | 287.0 | 301.6 | Core EPS (sen) | 70.9 | 141.4 | 95.0 | 99.8 | Core EPS growth (%) | 8.1 | 99.5 | (32.8) | 5.1 | Net DPS (sen) | 71.0 | 145.0 | 95.0 | 100.0 | Core P/E (x) | 24.4 | 12.2 | 18.2 | 17.3 | P/BV (x) | 13.9 | 13.3 | 12.8 | 12.4 | Net dividend yield (%) | 4.1 | 8.4 | 5.5 | 5.8 | ROAE (%) | 58.4 | 111.2 | 71.7 | 72.7 | ROAA (%) | 30.7 | 57.1 | 36.3 | 37.4 | EV/EBITDA (x) | 13.2 | 8.3 | 12.1 | 11.6 | Net debt/equity (%) | 6.0 | 17.8 | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR1.73 | Target Price: | MYR1.78 | Recommendation: | Hold | | |
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| | | Surprise goodies | | Headline and core profits were above expectation, the former boosted by MYR527m in land disposal gains. A better-than-expected 10sen DPS was declared this quarter on top of a proposed bonus issue of 2-for-every-5 shares. We revise up our core EPS and DPS forecasts. HOLD for its attractive dividend yield with an unchanged RNAV-TP of MYR1.78. But, BPLANT lacks clarity on future asset disposals to sustain its high dividends into FY18, coupled with MYR750m capex to purchase Dutaland's estates. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 615.2 | 707.9 | 774.9 | 761.2 | EBITDA | 112.9 | 188.4 | 216.1 | 197.9 | Core net profit | 31.6 | 81.5 | 116.8 | 100.7 | Core EPS (sen) | 2.0 | 5.1 | 7.3 | 6.3 | Core EPS growth (%) | (49.6) | 157.7 | 43.3 | (13.8) | Net DPS (sen) | 13.0 | 14.5 | 18.5 | 6.2 | Core P/E (x) | 87.5 | 34.0 | 23.7 | 27.5 | P/BV (x) | 1.3 | 1.3 | 1.1 | 1.1 | Net dividend yield (%) | 7.5 | 8.4 | 10.7 | 3.6 | ROAE (%) | 3.5 | 10.4 | 27.3 | 4.0 | ROAA (%) | 1.0 | 2.5 | 3.4 | 2.8 | EV/EBITDA (x) | 26.4 | 17.0 | 13.4 | 14.6 | Net debt/equity (%) | 21.9 | 21.5 | 2.2 | 1.7 |
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| | | | | | | | | | | | | | Share Price: | MYR0.75 | Target Price: | MYR0.76 | Recommendation: | Hold | | |
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| | | Managing cost and competition | | The stronger YoY 1QFY6/18 results were within our expectation, driven by the shipping division. We maintain our earnings forecasts, expecting sequential earnings to be dampened by the higher bunker/diesel costs. Additionally, the scrapping of the cabotage policy since Jun 2017 may see foreign shipping liners encroach the local market. Maintain our HOLD call and SOP-based TP of MYR0.76, which implies CY18 PER of 9x (mean: 8x). | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 592.7 | 521.5 | 601.8 | 625.9 | EBITDA | 133.3 | 63.2 | 80.8 | 87.8 | Core net profit | 59.0 | 26.8 | 32.4 | 36.3 | Core EPS (sen) | 14.7 | 6.7 | 8.1 | 9.1 | Core EPS growth (%) | 22.5 | (54.6) | 20.9 | 12.1 | Net DPS (sen) | 2.0 | 1.5 | 1.8 | 2.0 | Core P/E (x) | 5.1 | 11.1 | 9.2 | 8.2 | P/BV (x) | 0.9 | 0.9 | 0.8 | 0.7 | Net dividend yield (%) | 2.7 | 2.0 | 2.4 | 2.7 | ROAE (%) | na | na | na | na | ROAA (%) | 10.0 | 4.5 | 5.2 | 5.5 | EV/EBITDA (x) | 3.1 | 5.3 | 4.2 | 3.5 | Net debt/equity (%) | 0.4 | 2.2 | net cash | net cash |
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| | | | | | MACRO RESEARCH | | | | | | | KLPRO Index: Reversal at its Critical Support
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI rose 2.32pts to 1,720.68 yesterday, led by gains in RHBBANK, PETGAS and TM. Sentiment, however, was choppy throughout the day amid concern over external uncertainty. Market breadth was negative with losers outpacing gainers by 684 to 240. A total of 2.27b shares worth MYR2.36b changed hands. With Wall Street ended broadly higher overnight, FBMKLCI could extend its gain today. In terms of stock ideas, investors should focus on importers like automakers as MYR continued to strengthen. | |
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| | NEWS | | | Outside Malaysia:
U.S: Sales of previously owned homes rise as storm impact fades. Sales of previously owned U.S. homes rose to a four-month high, indicating demand was firming at the start of the quarter as the impact from hurricanes faded, according to a National Association of Realtors report. Contract closings rose 2% MoM to a 5.48m annual rate after 5.37m. Median sales price increased 5.5% YoY to USD 247,000. Inventory of available properties fell 10.4% YoY to 1.8m, lowest level for Oct. since data began in 1999. (Source: Bloomberg)
U.K: Fiscal deficit unexpectedly widened last month as inflation saw debt costs rise to the highest for any October since 2013. Net borrowing was GBP8b compared with GBP7.5b a year earlier, the Office for National Statistics said. Debt costs jumped 25%, the most for the month since 2007, as rising prices made the cost of servicing index-linked bonds more expensive. While the latest figures are disappointing, borrowing for 2017-18 as a whole is on course to come in well below the GBP58b officials predicted in March. (Source: Bloomberg)
U.K: Brexit will lead to a long period of sluggish growth, putting the economy in an "unusual" slowdown for years, according to Bank of England policy maker Dave Ramsden. In his first public speech since becoming deputy governor in September, Ramsden welcomed the economy's resilience after the 2016 vote to leave the European Union but said the longer Brexit uncertainty persists, the more likely demand and investment growth will weaken. The former Treasury official, one of two Monetary Policy Committee members to unsuccessfully vote against this month's interest-rate increase, said he has a different view of the economy from the majority of his colleagues. In his analysis, while Brexit may be holding back firms' investment plans, uncertainty means workers are also keeping their wage demands in check. (Source: Bloomberg)
S. Korea: Exports expanded strongly in the first 20 days of November, supporting domestic economic growth and indicating that global demand remains robust. Overseas sales rose 9.7% YoY, while imports rose 14% YoY, according to the customs office. This data is one of the earliest releases on trade flows in Asia, giving an early picture of what is happening in key markets for Korea including China and the U.S. Sales of semiconductors continued to lead the expansion, jumping 64% YoY. Shipments to China --Korea's biggest trade partner -- increased 21% YoY. (Source: Bloomberg) | |
| | | | | Other News:
Gabungan AQRS: Gets LoI for MYR189m construction job. Its wholly-owned subsidiary Gabungan Strategik S/B has received a letter of intent from KotaSAS S/B to build 1,004 landed homes in Kota Sultan Ahmad Shah (KotaSAS), Kuantan, Pahang. The project's value is MYR189.22m. The project will be divided into four phases, with Phase 1 to commence in 2018 and be completed within two years. Phases 2, 3 and 4 will commence in 2019, 2020 and 2021 respectively and will also be completed within two years. (Source: The Edge Financial Daily)
Daya Materials: Subsidiary wins MYR124m factory expansion job. Its 51%-owned subsidiary Daya CMT S/B has clinched a MYR124.43m contract to expand TPC Malaysia Sdn Bhd's manufacturing facility in Penang. The oil and gas service firm said the expansion of the facility in Bayan Lepas would include a new four-storey factory building, a new elevated link bridge that connects with the existing factory, and a new two-storey cafeteria/kitchen, locker and break out building expansion. (Source: The Star)
Kejuruteraan Asastera: Secures two contracts worth MYR23.8m. Kejuruteraan Asastera, which made debut on Bursa Malaysia last Friday, has clinched two contracts with a combined value of MYR23.8m. The contracts are for the provision of electrical engineering services for two residential projects, namely Greenfield Residence in Bandar Sunway and Cerrado (Phase 1) in Sepang for MYR9.8m and MYR14m respectively. (Source: The Sun Daily)
Serba Dinamik: 3Q earnings jump 51%; pays 1.5 sen dividend. Net profit for the third quarter ended Sept 30, 2017, rose 51% to MYR68m, from MYR45m, on strong activities from its operation and maintenance, and its engineering, procurement, construction and commissioning segments. Quarterly revenue grew 28% year-on-year to MYR653.3m, from MYR511.5m in 3QFY16. Its board of directors declared a third-interim dividend of 1.5 sen per share in respect of FY17, to be paid on Dec 20. For the first nine months of FY17, the group's net profit jumped to MYR229.5m, from MYR58.6m, as revenue climbed to MYR1.92b from MYR663.5m in 9MFY16. (Source: The Edge Financial Daily) | |
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