| | | | FEATURED
CALLS | | Malaysia | Oldtown
2QFY18: FMCG, solid showing
Liew Wei Han | | | | | | |
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| | | | | | | | | | | | | | | | Share Price: | MYR3.86 | Target Price: | MYR4.45 | Recommendation: | Buy | | |
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| | | To take over THHE's Layang job | | THHE has proposed to novate the Layang FPSO project to Yinson. That aside, no other details were forthcoming at press time. Should this project go to Yinson, it will be its first FPSO foray into the Malaysia O&G market. Yinson has a proven track record in executing FPSO projects worldwide and we see this development in a positive light. Maintain earnings forecasts for now, BUY and MYR4.45 SOP-based TP. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,038.6 | 764.2 | 1,000.5 | 1,139.7 | EBITDA | 261.0 | 283.8 | 560.9 | 697.6 | Core net profit | 173.1 | 219.5 | 375.3 | 340.5 | Core EPS (sen) | 16.2 | 20.6 | 35.2 | 31.9 | Core EPS growth (%) | 17.5 | 26.8 | 71.0 | (9.3) | Net DPS (sen) | 1.5 | 16.8 | 10.4 | 10.0 | Core P/E (x) | 23.8 | 18.8 | 11.0 | 12.1 | P/BV (x) | 1.8 | 1.7 | 1.3 | 1.2 | Net dividend yield (%) | 0.4 | 4.3 | 2.7 | 2.6 | ROAE (%) | 12.0 | 8.5 | 13.7 | 10.7 | ROAA (%) | 4.8 | 3.9 | 5.6 | 4.8 | EV/EBITDA (x) | 15.6 | 21.4 | 11.4 | 8.6 | Net debt/equity (%) | 51.9 | 114.7 | 72.9 | 54.9 |
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| | | | | | | | | | | | | | Share Price: | MYR2.69 | Target Price: | MYR3.00 | Recommendation: | Hold | | |
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| | | A first official surcharge | | Having under-recovered on gas cost in 2017, it was a relief to see a tariff surcharge being imposed in 1H18. Net gas tariff is set to increase by 23% in 1H18, in line with our expectation. We view both the quantum and timing of the hike is an affirmation of the pass-through mechanism under IBR. There is no change to our earnings forecasts. Maintain HOLD with an unchanged MYR3.20 TP. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 3,619.0 | 4,053.0 | 4,928.0 | 5,848.8 | EBITDA | 191.0 | 264.6 | 253.8 | 264.7 | Core net profit | 106.2 | 165.1 | 161.1 | 170.0 | Core EPS (sen) | 8.3 | 12.9 | 12.5 | 13.2 | Core EPS growth (%) | (36.7) | 55.6 | (2.5) | 5.5 | Net DPS (sen) | 8.3 | 12.9 | 12.5 | 13.2 | Core P/E (x) | 32.5 | 20.9 | 21.4 | 20.3 | P/BV (x) | 3.6 | 3.4 | 3.4 | 3.4 | Net dividend yield (%) | 3.1 | 4.8 | 4.7 | 4.9 | ROAE (%) | 10.7 | 16.6 | 15.8 | 16.7 | ROAA (%) | 5.5 | 7.7 | 7.2 | 7.2 | EV/EBITDA (x) | 14.9 | 10.2 | 12.1 | 11.5 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR3.17 | Target Price: | MYR3.90 | Recommendation: | Buy | | |
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| | | 2017 to be a new record | | 3Q17 core earnings was MYR371m (-1% YoY, -13% QoQ) after adjusting for FX-translation and MRM derivative movement. 9M17 earnings accounted for 86% of our full-year forecast. We raise FY17-19E earnings by +23%, +2% and +24% taking account current market conditions and imputing latest house estimates for crude oil prices and USDMYR. TP is raised to MYR3.90 as we rollover to 2018 with an unchanged 10x peg to PER. Maintain BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 6,297.7 | 8,600.5 | 9,717.8 | 9,928.9 | EBITDAR | 2,629.9 | 3,233.4 | 3,567.7 | 3,405.0 | Core net profit | 177.7 | 1,518.0 | 1,521.2 | 1,303.0 | Core EPS (sen) | 6.4 | 54.5 | 45.5 | 39.0 | Core EPS growth (%) | 434.5 | 753.9 | (16.6) | (14.3) | Net DPS (sen) | 3.0 | 4.0 | 45.0 | 8.0 | Core P/E (x) | 49.6 | 5.8 | 7.0 | 8.1 | P/BV (x) | 2.0 | 1.3 | 1.7 | 1.5 | Net dividend yield (%) | 0.9 | 1.3 | 14.2 | 2.5 | ROAE (%) | 12.0 | 31.9 | 25.1 | 18.4 | ROAA (%) | 0.9 | 7.0 | 7.1 | 5.9 | EV/EBITDAR (x) | 5.2 | 4.7 | 5.1 | 5.9 | Net debt/equity (%) | 228.9 | 133.6 | 122.7 | 132.9 |
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| | | | | | | | | | | | | | Share Price: | MYR3.55 | Target Price: | MYR4.50 | Recommendation: | Buy | | |
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| | | 3Q17: Supported by OMS | | 9M17 core earnings were in line with ours but below consensus full year forecasts. Improved contribution from its associate, OMS, which reported profits in 3Q17, more than offset the weaker construction materials earnings. Positively, we also see QoQ improvements at its core divisions amidst flattish YoY performance. Keeping our earnings forecasts, BUY call and MYR4.50 SOP-based TP. There will be an analyst briefing on 30 Nov. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,788.0 | 1,551.3 | 1,950.8 | 2,197.6 | EBITDA | 394.8 | 418.9 | 388.1 | 420.3 | Core net profit | 244.7 | 212.4 | 221.3 | 258.9 | Core EPS (sen) | 22.8 | 19.8 | 20.6 | 24.1 | Core EPS growth (%) | 7.0 | (13.2) | 4.2 | 17.0 | Net DPS (sen) | 4.5 | 6.3 | 8.2 | 9.6 | Core P/E (x) | 15.6 | 18.0 | 17.2 | 14.7 | P/BV (x) | 1.9 | 1.7 | 1.6 | 1.5 | Net dividend yield (%) | 1.3 | 1.8 | 2.3 | 2.7 | ROAE (%) | 13.0 | 8.0 | 9.7 | 10.7 | ROAA (%) | 8.1 | 6.4 | 6.1 | 6.6 | EV/EBITDA (x) | 14.3 | 10.5 | 10.0 | 9.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR1.71 | Target Price: | MYR2.00 | Recommendation: | Buy | | |
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| | | Nice dividend surprise | | 3Q17/9M17 earnings were in-line but dividends positively surprised. Our earnings estimates are unchanged but dividend estimates are raised 11%. DCF-based TP is also unchanged at MYR2.00. MAG remains a tactical BUY with current valuation having largely priced in the tax penalty of MYR476.5m (MYR0.33/shr). If the final tax penalty is nil or markedly less, eventual upside ought to be closer to our estimated 17%. Meanwhile, it offers attractive net dividend yields of >5.8% p.a. going forward. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 2,767.0 | 2,659.3 | 2,546.3 | 2,597.3 | EBITDA | 373.9 | 326.7 | 346.1 | 353.9 | Core net profit | 226.5 | 189.4 | 210.2 | 219.6 | Core EPS (sen) | 15.9 | 13.3 | 14.8 | 15.4 | Core EPS growth (%) | (10.9) | (16.3) | 11.0 | 4.5 | Net DPS (sen) | 16.0 | 13.0 | 10.0 | 10.5 | Core P/E (x) | 10.7 | 12.8 | 11.6 | 11.1 | P/BV (x) | 1.0 | 1.0 | 1.0 | 1.0 | Net dividend yield (%) | 9.4 | 7.6 | 5.8 | 6.1 | ROAE (%) | 9.3 | 7.8 | 8.6 | 8.7 | ROAA (%) | 6.2 | 5.2 | 5.9 | 6.3 | EV/EBITDA (x) | 11.4 | 11.4 | 8.7 | 8.3 | Net debt/equity (%) | 25.7 | 24.1 | 21.1 | 17.7 |
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| | | | | | | | | | | | | | Share Price: | MYR4.16 | Target Price: | MYR5.85 | Recommendation: | Buy | | |
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| | | Time for further recognition | | 3Q17 outperformed on better-than-expected CPO ASP and lower-than-expected cost. Following our FY17 EPS revision (+11%), we raise SOP's TP TP to MYR5.85 (+11%) on unchanged 15x 2017 PER (3-year mean). This under-appreciated stock trades at just 11x 2017 PER (vs sector's 25x) and its EV/planted ha of MYR32,000 is barely above replacement cost. Reiterate BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 3,670.8 | 4,302.5 | 4,976.3 | 4,790.6 | EBITDA | 270.5 | 333.2 | 520.1 | 539.1 | Core net profit | 88.5 | 130.0 | 222.2 | 235.0 | Core EPS (sen) | 20.0 | 29.5 | 39.0 | 41.2 | Core EPS growth (%) | (21.9) | 47.0 | 32.3 | 5.7 | Net DPS (sen) | 5.0 | 5.0 | 7.8 | 8.2 | Core P/E (x) | 20.8 | 14.1 | 10.7 | 10.1 | P/BV (x) | 1.3 | 1.0 | 1.2 | 1.1 | Net dividend yield (%) | 1.2 | 1.2 | 1.9 | 2.0 | ROAE (%) | 6.5 | 7.9 | 11.3 | 11.0 | ROAA (%) | 3.1 | 3.5 | 5.0 | 5.2 | EV/EBITDA (x) | 9.6 | 6.5 | 5.8 | 5.3 | Net debt/equity (%) | 44.1 | 22.9 | 25.1 | 13.5 |
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| | | | | | | | | | | | | | Share Price: | MYR2.43 | Target Price: | MYR2.90 | Recommendation: | Buy | | |
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| | | 2QFY18: FMCG, solid showing | | 2QFY3/18 results were in line. Moving forward, FMCG should continue to be the growth driver on growing exports to Greater China. We expect a seasonally stronger 2H, supported by festivities. Our earnings forecasts are intact but we upgrade OTB to a BUY with an unchanged TP of MYR2.90 (18x CY18 PER, +1SD mean) due to favourable risk-reward. FY18E dividend yield of 3.3% adds to its merits. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 393.4 | 425.2 | 459.4 | 503.5 | EBITDA | 84.7 | 97.1 | 107.9 | 115.7 | Core net profit | 55.3 | 65.6 | 69.8 | 75.8 | Core EPS (sen) | 11.9 | 14.2 | 15.1 | 16.4 | Core EPS growth (%) | 6.1 | 18.6 | 6.5 | 8.5 | Net DPS (sen) | 9.0 | 10.0 | 8.3 | 9.0 | Core P/E (x) | 20.4 | 17.2 | 16.1 | 14.9 | P/BV (x) | 3.1 | 3.0 | 2.8 | 2.6 | Net dividend yield (%) | 3.7 | 4.1 | 3.4 | 3.7 | ROAE (%) | 15.0 | 16.6 | 18.1 | 18.1 | ROAA (%) | 12.5 | 14.5 | 14.8 | 14.9 | EV/EBITDA (x) | 6.4 | 11.5 | 8.8 | 8.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR1.20 | Target Price: | MYR1.80 | Recommendation: | Buy | | |
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| | | 9M17: Above expectation | | 3Q17 core earnings was 3.8x QoQ at MYR34m, driven mainly by its O&G Nord Stream 2 (NS2) operations, prompting a 9%-35% upgrade in our FY17-19E earnings. Consequently, we raise our TP by 38% to MYR1.80, as we roll over our valuation to FY19, on an unchanged 12x PER. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,839.5 | 1,276.6 | 2,192.4 | 2,503.3 | EBITDA | 143.3 | 53.6 | 222.7 | 273.4 | Core net profit | 22.7 | (23.3) | 84.3 | 113.3 | Core EPS (sen) | 2.9 | (3.0) | 10.9 | 14.7 | Core EPS growth (%) | (84.4) | nm | nm | 34.5 | Net DPS (sen) | 3.0 | 0.5 | 0.0 | 0.0 | Core P/E (x) | 40.9 | nm | 11.0 | 8.2 | P/BV (x) | 0.8 | 1.2 | 1.0 | 0.9 | Net dividend yield (%) | 2.5 | 0.4 | 0.0 | 0.0 | ROAE (%) | 0.9 | (23.2) | 20.4 | 11.2 | ROAA (%) | 0.8 | (0.8) | 2.9 | 3.5 | EV/EBITDA (x) | 12.2 | 30.4 | 8.1 | 6.2 | Net debt/equity (%) | 73.6 | 104.7 | 75.7 | 59.2 |
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| | | | | | | | | | | | | | Share Price: | MYR2.32 | Target Price: | MYR2.61 | Recommendation: | Buy | | |
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| | | 3Q17: Above expectations | | 9M17 core earnings were above ours but below consensus expectations on stronger-than-expected contribution from the construction segment. Our FY17E-FY19E earnings are revised up by 4%-6% after adjusting for construction margins. Consequently, we derive a new higher TP of MYR2.61 (+12sen), pegged to unchanged 10x FY18 PER (+0.5 SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,053.6 | 940.7 | 1,238.3 | 1,215.8 | EBITDA | 112.7 | 130.9 | 109.5 | 126.1 | Core net profit | 64.4 | 80.7 | 67.2 | 79.9 | Core EPS (sen) | 21.4 | 26.4 | 22.0 | 26.1 | Core EPS growth (%) | 90.5 | 23.0 | (16.8) | 18.9 | Net DPS (sen) | 5.8 | 6.5 | 5.9 | 7.1 | Core P/E (x) | 10.8 | 8.8 | 10.6 | 8.9 | P/BV (x) | 1.5 | 1.3 | 1.2 | 1.1 | Net dividend yield (%) | 2.5 | 2.8 | 2.6 | 3.0 | ROAE (%) | na | na | na | na | ROAA (%) | 6.8 | 8.2 | 6.3 | 6.9 | EV/EBITDA (x) | 4.3 | 5.1 | 6.7 | 5.9 | Net debt/equity (%) | 14.3 | 6.7 | 4.2 | 6.1 |
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| | | | | | | | | | | | | | Share Price: | MYR1.52 | Target Price: | MYR1.44 | Recommendation: | Hold | | |
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| | | Earnings and sales on track | | MSGB's 9M17 core earnings are within our expectation but below consensus. Sales are also on track to meet management's target of MYR1.8b. 4Q17 sales should pick up strongly given the good responses on its recently-launched projects. We maintain our net profit forecasts and MYR1.44 RNAV-TP (on an unchanged 0.6x P/RNAV). Reiterate HOLD. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 3,108.5 | 2,957.6 | 2,980.0 | 3,117.4 | EBITDA | 527.9 | 508.8 | 585.2 | 657.4 | Core net profit | 338.8 | 319.5 | 291.4 | 333.5 | Core FDEPS (sen) | 14.1 | 13.3 | 12.1 | 13.8 | Core FDEPS growth(%) | (23.5) | (5.7) | (8.8) | 14.5 | Net DPS (sen) | 6.5 | 6.5 | 4.8 | 5.5 | Core FD P/E (x) | 10.8 | 11.5 | 12.6 | 11.0 | P/BV (x) | 1.2 | 1.1 | 1.1 | 1.0 | Net dividend yield (%) | 4.3 | 4.3 | 3.2 | 3.6 | ROAE (%) | na | na | na | na | ROAA (%) | 5.7 | 5.0 | 4.3 | 4.6 | EV/EBITDA (x) | 6.9 | 6.9 | 5.2 | 4.4 | Net debt/equity (%) | 3.7 | 2.0 | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR5.09 | Target Price: | MYR4.75 | Recommendation: | Hold | | |
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| | | 1QFY18: A decent start | | 1QFY18 results and 2nd interim net DPS of 2.5sen were in-line. Earnings were mainly encouraged by improvement in revenue, gross profit margin and other income. We maintain our earnings forecasts but increase our TP by 55sen to MYR4.75, pegged to 17x CY18 PER post re-rating of Padini's valuation. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,301.2 | 1,570.9 | 1,794.2 | 2,019.4 | EBITDA | 221.7 | 249.0 | 282.6 | 305.9 | Core net profit | 137.9 | 156.1 | 177.7 | 188.3 | Core EPS (sen) | 21.0 | 23.7 | 27.0 | 28.6 | Core EPS growth (%) | 71.9 | 13.2 | 13.9 | 6.0 | Net DPS (sen) | 11.5 | 11.5 | 10.0 | 10.0 | Core P/E (x) | 24.3 | 21.5 | 18.8 | 17.8 | P/BV (x) | 7.1 | 6.1 | 5.0 | 4.2 | Net dividend yield (%) | 2.3 | 2.3 | 2.0 | 2.0 | ROAE (%) | 31.4 | 30.8 | 29.2 | 25.9 | ROAA (%) | 19.7 | 18.6 | 18.7 | 17.1 | EV/EBITDA (x) | 5.8 | 7.8 | 10.2 | 9.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR5.85 | Target Price: | MYR6.10 | Recommendation: | Hold | | |
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| | | 2QFY18: Met expectations | | 1HFY18 net profit of MYR115m (-4% YoY) was in-line with our full year forecast. No interim dividend was declared within the quarter, as expected. No change to our earnings forecasts, DPS estimates of 25sen p.a for FY18E-FY20E, and RNAV-TP of MYR6.10. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 416.2 | 534.2 | 540.6 | 546.0 | EBITDA | 353.3 | 460.6 | 459.6 | 456.9 | Core net profit | 174.1 | 221.0 | 226.8 | 241.3 | Core EPS (sen) | 33.4 | 42.1 | 43.2 | 46.0 | Core EPS growth (%) | 25.0 | 25.9 | 2.6 | 6.4 | Net DPS (sen) | 25.0 | 25.0 | 25.0 | 25.0 | Core P/E (x) | 17.5 | 13.9 | 13.5 | 12.7 | P/BV (x) | 5.0 | 4.3 | 3.8 | 3.3 | Net dividend yield (%) | 4.3 | 4.3 | 4.3 | 4.3 | ROAE (%) | na | na | na | na | ROAA (%) | 7.9 | 9.8 | 9.8 | 10.3 | EV/EBITDA (x) | 10.0 | 8.3 | 7.8 | 7.5 | Net debt/equity (%) | 143.6 | 95.4 | 65.3 | 37.0 |
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| | | | | | | | | | | | | | Share Price: | MYR0.69 | Target Price: | MYR0.59 | Recommendation: | Sell | | |
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| | | Operating environment just too challenging | | 3Q17/9M17 results disappointed. We cut core estimates by MYR26.0m-MYR73.4m at the net level, not expecting profits in the medium term. Higher newsprint prices also pose a risk. MPR may also have to incur more staff separation schemes to cut costs. Rolling forward our valuation base year to end-FY18E from FY17E and ascribing 0.9x P/NTA (0.8x previously), our new TP is MYR0.59. Risk-reward is unfavourable. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,427.7 | 1,289.0 | 1,159.2 | 1,222.0 | EBITDA | 325.8 | 163.6 | 32.1 | 85.4 | Core net profit | 138.7 | 38.7 | (80.2) | (25.8) | Core EPS (sen) | 12.5 | 3.5 | (7.2) | (2.3) | Core EPS growth (%) | (2.4) | (72.1) | nm | nm | Net DPS (sen) | 10.0 | 8.0 | 0.0 | 0.0 | Core P/E (x) | 5.6 | 19.9 | nm | nm | P/BV (x) | 0.5 | 0.5 | 0.6 | 0.7 | Net dividend yield (%) | 14.4 | 11.5 | 0.0 | 0.0 | ROAE (%) | 8.6 | (3.8) | (20.8) | (2.2) | ROAA (%) | 5.8 | 1.7 | (3.9) | (1.3) | EV/EBITDA (x) | 4.0 | 7.5 | 27.6 | 10.5 | Net debt/equity (%) | net cash | net cash | 8.2 | 10.9 |
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| | | | | | | | | | | | | | Share Price: | MYR1.51 | Target Price: | MYR1.24 | Recommendation: | Sell | | |
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| | | 3Q17: Higher other income, lower taxes | | While 3Q17 revenue was in-line, core net profit was above our expectation largely on higher other income (eg. marketing income) and lower taxes. Imputing the results, we have raised our earnings forecasts by 8-13% for FY17-19E. Its 18-month 'Back to Basics' exercise which was unveiled end-July 2017 is on-going. We await further delivery of results. Maintain SELL but with a higher TP of MYR1.24 (+14sen, unchanged 26x CY18 PER, about in line with peer average). | | |
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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 | 122.3 | 140.0 | Core net profit | 55.8 | 54.0 | 46.4 | 58.2 | Core EPS (sen) | 4.6 | 4.4 | 3.8 | 4.8 | Core EPS growth (%) | (3.3) | (3.3) | (14.1) | 25.6 | Net DPS (sen) | 4.7 | 4.7 | 1.9 | 2.4 | Core P/E (x) | 33.2 | 34.3 | 39.9 | 31.8 | P/BV (x) | 10.9 | 52.6 | 31.7 | 21.1 | Net dividend yield (%) | 3.1 | 3.1 | 1.3 | 1.6 | ROAE (%) | 27.5 | 52.5 | 99.1 | 79.8 | ROAA (%) | 7.5 | 7.1 | 5.8 | 6.7 | EV/EBITDA (x) | 13.8 | 14.3 | 15.5 | 13.2 | Net debt/equity (%) | net cash | 188.2 | 79.8 | 0.7 |
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| | | | | | | | | | | | | | Share Price: | MYR0.40 | Target Price: | MYR0.13 | Recommendation: | Sell | | |
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| | | 9M17: Results a miss | | Results came in below our expectation. 9M17 core net loss made up 123% of our FY loss estimates, prompting a substantial cut in our FY17-18 forecasts. Eroding order replenishment and cash balances remain key concerns. The operating outlook over the next 12 months remains a challenge. Valuations are demanding vis-à-vis peers. Reiterate SELL with an unchanged MYR0.13 TP, based on 1x EV/replacement value. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 592.6 | 622.6 | 301.3 | 323.0 | EBITDA | 38.6 | 58.9 | (92.3) | (15.5) | Core net profit | 12.8 | 10.0 | (171.6) | (90.4) | Core EPS (sen) | 1.5 | 1.2 | (19.9) | (10.5) | Core EPS growth (%) | (82.8) | (21.8) | nm | nm | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | 27.0 | 34.5 | nm | nm | P/BV (x) | 0.8 | 0.7 | 1.2 | 1.9 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | 5.0 | 3.5 | (50.8) | (43.7) | ROAA (%) | 1.7 | 1.3 | (23.5) | (15.2) | EV/EBITDA (x) | 21.8 | 12.4 | nm | nm | Net debt/equity (%) | 18.6 | 35.9 | 73.5 | 115.4 |
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| | | | | SECTOR RESEARCH | | | | | | | Gas tariff hike
by Yen Ling Lee |
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| | | | | | Effective gas tariff for 1H18 is raised by 23%, and the impact to glove players' cost is an increment of 2%. Given the tight supply, we believe glove players would be able to raise ASPs to keep their margins intact. We made no change to our earnings forecasts, ratings and TPs for stocks under our coverage. Our BUY pick is Kossan for its high earnings growth (3-year net profit CAGR: 17%) and undemanding 2018 PER of 21x (Hartalega: 34x, Top Glove: 22x). | |
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| | | | MACRO RESEARCH | | | | | | | FBMS Index: Reversal at Critical Support
by Nik Ihsan Raja Abdullah |
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| | | | | | Buoyed by gains in selected blue chips in particular TNB, the FBMKLCI ended the day 5.96pts higher at 1,720.38 yesterday. Market breadth, however, remained negative with losers outpacing gainers by 477 to 400. A total of 1.96b shares worth MYR2.79b changed hands. Amid mixed performances in overnight US markets, the FBMKLCI will be choppy today. | |
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| | NEWS | | | Outside Malaysia:
U.S: Third-quarter growth revised to three-year high of 3.3% on stronger investment from businesses and government agencies than previously estimated. Gross domestic product grew at a 3.3% annualized rate, revised from 3%; fastest since 3Q 2014. Consumer spending, biggest part of the economy, grew 2.3%; revised from 2.4%; down from 3.3% in 2Q. Business-equipment spending rose at a 10.4% pace, a three-year high, revised from 8.6%; reflects transportation gear. (Source: Bloomberg)
E.U: ECB says low interest rates aid debt resilience but risks remain. The euro area's strengthening recovery and monetary stimulus are making national debt burdens more sustainable, though the risk remains that political uncertainty could cause yields to spike abruptly, the European Central Bank said. The Frankfurt-based institution said in its twice-yearly Financial Stability Review that stress in euro-area sovereign- bond markets has declined to levels seen before the financial crisis. The favourable developments were likely underpinned by reduced economic policy concerns in Europe following national elections in major countries, and a continuation of the ECB's monetary support. (Source: Bloomberg)
U.K: Consumer credit rose by GBP1.5b (USD2b), the BOE said. The annual pace of credit growth slowed only marginally to 9.6% from 9.8% in September. The figures suggest the prospect of higher borrowing costs -- the BOE raised its benchmark rate for the first time in more than a decade this month -- did little to dent demand for unsecured debt. The BOE told banks to add another GBP6b (USD8b) to their capital buffers and said it may increase their requirements again next year. Officials fear a sharp Brexit-induced downturn among other factors could saddle lenders with loan losses that curtail the flow of credit to the economy. Separate BOE figures showed the number of mortgage approvals fell to 64,575 in October, their lowest since September last year. The value of loans advanced, minus repayments, declined to GBP3.4b from GBP3.8b. (Source: Bloomberg)
Japan: Strong exports bolster October industrial production, the 12th consecutive month of gains. Industrial production rose 0.5% in October from September. Year-on-year production climbed 5.9% YoY. Japan's exports are performing at their best since the global financial crisis, which provides support for production. Domestic demand remains weak, however, with consumption dropping in the third quarter, and October retail sales coming in weaker than expected. (Source: Bloomberg)
Japan: Recovery seen in best company credit ratings in a decade. Japanese companies have gotten back into good shape despite a string of scandals, and the debt scores that credit-rating firms are giving them is one clear indication of that. The number of upgrades and shifts to positive outlooks of local firms came to 181 so far this year, the most since 2007, according to the combined total of all cases by Moody's Investors Service, S&P Global Ratings, Rating & Investment Information and Japan Credit Rating Agency. Upgrades and positive outlooks exceeded downgrades and negative outlooks by 68, also the most in 10 years. (Source: Bloomberg) | |
| | | | | Other News:
Serba Dinamik: Bags MYR496m worth of jobs. The group has been awarded four engineering, procurement, construction and commissioning (EPCC) contracts and four operation and maintenance (O&M) contracts worth a combined MYR496m. Its wholly-owned subsidiary Serba Dinamik S/B has entered three EPCC contracts and one O&M contract with Greenearth Landmark S/B, which are altogether worth MYR385m. Additionally, the company secured an EPCC contract from Malaysia LNG S/B and three separate O&M contracts from JX Nippon Oil & Gas Exploration (Malaysia) Ltd, Malaysia LNG and Petronas Dagangan, which are worth a combined MYR111m. (Source: The Edge Financial Daily)
Vertice: Bags MYR22m apartment job. Its unit Million Twilight S/B has clinched a MYR22 million sub-contract for the construction of one block of affordable apartments in Penang. For the third quarter ended Sept 30, 2017, the group's net loss widened to MYR310,000, against MYR33,000 in the previous corresponding quarter, mainly due to expenses incurred for the proposed corporate exercise held during the year. For the nine months period, it registered a net loss of MYR1.9m, from a net profit of MYR32,000 previously. (Source: The Sun Daily)
MyEG: 1Q net profit up 30% on higher volume of foreign worker permit renewals. Posted a growth of 30% in net profit for its first financial quarter ended Sept 30, 2017 to MYR52.78m from MYR40.51m a year ago, on higher online foreign worker permit (FWP) renewals. The rise in profitability was also boosted by foreign workers rehiring programme services (FWR) and foreign workers' insurance from both the FWP and FWR, as well as stronger revenue contribution from its motor vehicle trading-related services. (Source: The Edge Financial Daily) | |
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