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| | | | | | | | | | | | | | | | Share Price: | MYR5.07 | Target Price: | MYR5.60 | Recommendation: | Buy | | |
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| | | KVMRT 3 tender begins, but … | | A tender notice for the KVMRT 3 – Circle Line turnkey contractor role has been announced by MRT Corp, signalling a change to the PDP structure employed in both the previous KVMRT 1 and 2. Our estimates suggest a project cost in the range of MYR40b-45b over the 40km track alignment of which majority is underground. Our RNAV-based TP is lowered to MYR5.60 (-30sen), after adjusting for lower sustainable orderbook imputing potentially lower contribution from KVMRT 3 upon abolishment of the PDP role. | | |
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| | FYE Jul (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,121.9 | 3,211.4 | 4,031.6 | 4,032.3 | EBITDA | 548.5 | 831.2 | 804.9 | 907.5 | Core net profit | 626.1 | 700.6 | 761.9 | 823.2 | Core EPS (sen) | 26.0 | 24.2 | 22.6 | 24.4 | Core EPS growth (%) | (10.2) | (6.9) | (6.6) | 8.1 | Net DPS (sen) | 12.0 | 12.0 | 12.0 | 12.0 | Core P/E (x) | 19.5 | 21.0 | 22.4 | 20.8 | P/BV (x) | 1.8 | 2.0 | 2.2 | 2.0 | Net dividend yield (%) | 2.4 | 2.4 | 2.4 | 2.4 | ROAE (%) | 9.5 | 8.4 | 9.9 | 10.1 | ROAA (%) | 4.6 | 4.7 | 4.7 | 4.9 | EV/EBITDA (x) | 29.0 | 24.5 | 28.1 | 24.2 | Net debt/equity (%) | 55.2 | 59.8 | 60.9 | 48.7 |
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| | | | | | | | | | | | | | Share Price: | MYR3.21 | Target Price: | MYR3.80 | Recommendation: | Buy | | |
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| | | Wins MYR392m building works | | IJM's latest construction job win positively lifts its outstanding orderbook to above MYR9b, further enhancing medium-term earnings visibility. We make no change to our earnings forecasts having imputed job win potentials. 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) | 22.5 | 23.0 | 19.7 | 17.4 | P/BV (x) | 1.3 | 1.2 | 1.2 | 1.1 | Net dividend yield (%) | 3.1 | 2.3 | 2.2 | 2.2 | 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 | 14.1 | 12.3 | Net debt/equity (%) | 40.4 | 35.3 | 34.9 | 29.7 |
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| | | | | | | | | | | | | | Share Price: | MYR5.05 | Target Price: | MYR5.55 | Recommendation: | Hold | | |
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| | | Keeping our cards close to our chest for now | | GENM reports 3Q17 results on 23 Nov. The results may disappoint due to higher-than-expected Resorts World Genting (RWG) staff cost. Genting UK's (GENUK) London VIP volumes may have also been under pressure from stricter regulations. That said, Resorts World New York (RWNY) will undergo an expansion that will boost its long term earnings. We lower FY17-19 earnings forecasts by 4-11%, TP by 7% to MYR5.55. Downside for TP is another 4% to MYR5.35 if its Mashpee Wampanoag investment sours. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 8,395.9 | 8,931.6 | 9,392.2 | 10,949.9 | EBITDA | 2,013.1 | 2,394.9 | 2,427.1 | 3,169.2 | Core net profit | 1,154.7 | 1,547.4 | 1,404.7 | 2,079.4 | Core FDEPS (sen) | 20.4 | 27.3 | 24.7 | 36.5 | Core FDEPS growth(%) | (15.0) | 34.0 | (9.6) | 48.0 | Net DPS (sen) | 7.1 | 16.5 | 8.3 | 12.3 | Core FD P/E (x) | 24.8 | 18.5 | 20.5 | 13.8 | P/BV (x) | 1.5 | 1.4 | 1.4 | 1.3 | Net dividend yield (%) | 1.4 | 3.3 | 1.6 | 2.4 | ROAE (%) | 7.1 | 14.8 | 6.9 | 9.7 | ROAA (%) | 4.8 | 5.6 | 4.8 | 6.7 | EV/EBITDA (x) | 12.3 | 10.5 | 11.7 | 9.0 | Net debt/equity (%) | 0.1 | net cash | net cash | 0.5 |
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| | | | | | | | | | | | | | Share Price: | SGD1.24 | Target Price: | SGD1.42 | Recommendation: | Buy | | |
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| | | All systems go! | | Higher-than-expected VIP volume drove 3Q17 earnings to outperform our expectation again. Note that 3Q17 VIP volume and 3Q17 mass market gross gaming revenue (GGR) both grew YoY, snapping many quarters of YoY contraction. This is a positive development as 3Q16-2Q17 earnings growth YoY had been largely driven by cost savings. Accordingly, we lift FY17-FY19F EBITDA by 4-5%. Ascribing an unchanged FY18F EV/EBITDA of 12x (eight-year mean), we lift our TP from SGD1.35 to SGD1.42. | | |
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| | FYE Dec (SGD m) | FY15A | FY16A | FY17E | FY18E | Revenue | 2,400.9 | 2,228.1 | 2,372.2 | 2,376.5 | EBITDA | 812.3 | 779.0 | 1,153.1 | 1,155.5 | Core net profit | 267.4 | 285.1 | 658.9 | 726.3 | Core FDEPS (cts) | 2.2 | 2.4 | 5.4 | 6.0 | Core FDEPS growth(%) | (42.2) | 7.1 | 129.4 | 10.2 | Net DPS (cts) | 1.5 | 3.0 | 3.0 | 3.0 | Core FD P/E (x) | 55.8 | 52.1 | 22.7 | 20.6 | P/BV (x) | 2.0 | 2.1 | 2.0 | 1.9 | Net dividend yield (%) | 1.2 | 2.4 | 2.4 | 2.4 | ROAE (%) | 1.0 | 7.3 | 10.0 | 9.3 | ROAA (%) | 2.2 | 2.4 | 6.3 | 7.8 | EV/EBITDA (x) | 7.1 | 8.9 | 10.7 | 10.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | MACRO RESEARCH | | | | | | | FBMKLCI Index: Persistently Shrugging off the Bear
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI started the week on a stronger note, led by gain in MISC, IOI and YTL. At day's end, the benchmark rose to 1.36pts to 1,742.29. Broader market has improved, but still, losers continued to outpace advancers by 451 to 429. A total of 3.00b shares worth MYR2.08b changed hands. With 3Q earnings season gets underway, we expect market to remain volatile. O&G stocks however could steal the limelight as oil price rallied overnight. | |
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| | NEWS | | | Outside Malaysia:
E.U: Euro-area companies struggling to keep up with booming orders are expanding their ranks at the fastest pace in more than ten years. With a Purchasing Managers' Index indicating strong momentum at the start of the fourth quarter, the 19-nation economy is on course for growth of as much as 0.7%, HIS Markit said. A gauge for manufacturing and services slipped to 56 in October from 56.7 the previous month, less than initially reported. While European Central Bank President Mario Draghi has urged caution in weaning the economy off monetary stimulus as inflation remains low, he also suspected that more "growth surprises" may be in store. (Source: Bloomberg)
U.K: Retail sales weaken as cash-strapped consumers hold back. U.K. retail sales fell the most in seven months in October, indicating continued caution among consumer's just weeks before the crucial Christmas shopping season. The British Retail Consortium said sales fell 1% on a like-for-like basis and were up just 0.2% in total terms. In a separate report, Barclaycard said annual growth in household spending slowed to 2.4% last month from 3% in September, the weakest in more than a year. Faster inflation and sluggish wage growth has meant falling real incomes for U.K. workers, allowing them to buy less in Britain's high streets and malls. (Source: Bloomberg)
China: Shadow banking sector, estimated by some analysts to be worth CNY122.8t (USD18.5t), stopped growing in the first half of the year as issuance of wealth management products declined, according to Moody's Investors Service. For the first time since 2012, China's GDP grew faster than shadow banking assets in the six-month period, Moody's said. Following last month's Communist Party Congress, further regulation will continue to rein in shadow banking and address some of the key systemic imbalances, Moody's said. While Moody's assessment offers some evidence that China's crackdown on shadow financing is starting to bite, authorities continue to sound the alarm on high debt levels. In an article on the People's Bank of China's website, Governor Zhou Xiaochuan pointed to latent risks that are "hidden, complex, sudden, contagious and hazardous." Government, household and corporate debt adds up to about 260% of the economy, according to Bloomberg Intelligence. (Source: Bloomberg)
Indonesia: Economy expanded at a slower pace in 3Q 2017 than expected, a disappointing outcome for the government as it struggles to boost growth in Southeast Asia's largest economy. GDP rose 5.06% YoY, according to data released by the statistics bureau in Jakarta. (Source: Bloomberg)
Crude Oil: Pierces two-year high as Saudi roundup rattles markets. Oil prices have climbed as dozens of princes, government ministers and billionaires were arrested in a sweeping anti-corruption probe, including high-ranking officials involved with state oil producer Saudi Aramco. Though the shake-up involving the world's biggest crude exporter underpinned crude's rally, a promise by Nigeria's oil minister to cap production joined with the dollar's drop added upward momentum as the session progressed. Brent for January settlement was USD64.27/bbl on the London-based ICE Futures Europe exchange, the largest rise since July. (Source: Bloomberg) | |
| | | | | Other News:
MBSB: To buy AFB for MYR644.95m, to issue 225.51m new shares at MYR1.10 apiece. The group is buying the entire interest in Asian Finance Bank (AFB) for MYR644.95m. The purchase will be satisfied via MYR396.89m in cash and an issuance of 225.5m new ordinary shares in MBSB at MYR1.10 apiece.The proposed issue price represents a one sen discount to MBSB's closing price of MYR1.11 last Friday, and will enlarge MBSB's share base by 225.51m shares. (Source: The Edge Financial Daily)
Dagang Nexchange: Bags sub-contract to encrypt RFID vehicle entry permit tags. The group has bagged a sub-contract to undertake the encryption of radio frequency identification (RFID) vehicle entry permit (VEP) tags on foreign vehicles entering Malaysia. Its 51%-owned subsidiary, DNEX RFID Sdn Bhd, was awarded the job by the project's main contractor TCSens Sdn Bhd, at a contract price of MYR15 per tag.(Source: The Edge Financial Daily)
Toyo Ink: Enters new memorandum of agreement for Vietnam power plant project. Toyo Ink Group has entered into a new memorandum of agreement with the Department of Natural Resources and Environment of Hau Giang Province (Hau Giang DONRE) for the development of a power plant project in Vietnam. (Source: The Sun Daily) | |
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