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| | | | | | | | | | | | | | Share Price: | MYR15.84 | Target Price: | MYR16.00 | Recommendation: | Hold | | |
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| | | Relatively routine | | 1QFY12/17 (Sep-Nov 2017) earnings were in-line, with Tenaga over-recovering on generation costs. Management guided for dividends in 4MFY12/17 as per policy. Maintain HOLD with an unchanged MYR16.00 TP. In our view, the market will need some time to digest both the new RP2 earnings step-down and the 1H18 subsidy funding. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 43,286.8 | 44,531.5 | 63,143.5 | 48,768.0 | EBITDA | 13,921.8 | 14,794.2 | 20,860.8 | 15,477.4 | Core net profit | 7,050.7 | 7,725.8 | 9,320.1 | 6,615.0 | Core FDEPS (sen) | 124.9 | 136.9 | 164.0 | 116.4 | Core FDEPS growth(%) | 29.9 | 9.6 | 19.8 | (29.0) | Net DPS (sen) | 29.0 | 32.0 | 82.4 | 58.4 | Core FD P/E (x) | 12.7 | 11.6 | 9.7 | 13.6 | P/BV (x) | 1.9 | 1.7 | 1.5 | 1.5 | Net dividend yield (%) | 1.8 | 2.0 | 5.2 | 3.7 | ROAE (%) | 13.5 | 14.8 | 16.9 | 11.0 | ROAA (%) | 6.2 | 6.2 | 6.8 | 4.6 | EV/EBITDA (x) | 6.6 | 6.5 | 5.4 | 7.3 | Net debt/equity (%) | 33.3 | 32.6 | 38.3 | 36.4 |
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| | SECTOR RESEARCH | | | | | | Indonesia wins anti-dumping case against EU | NEUTRAL
by Chee Ting Ong |
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| | | | | | Despite a potential ban on palm biodiesel use in EU from 2021, there is a near-term positive sentiment uplift as Indonesia has won a biodiesel dispute against the EU at the WTO that may see a revival of its biodiesel exports to the EU in a couple of months. Coupled with recent low palm oil-gas oil (POGO) price spread, this will be supportive of CPO price. We maintain our NEUTRAL call on the sector with selected BUYs on IOI (trading), SOP and BAL. | |
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| | | | | | End to 'extra' fees?
by Mohshin Aziz |
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| | | | | | The Sun Daily today, citing unnamed source, states that Malaysia Aviation Commission will put to an end the many 'extra charges' that are imposed by the airlines. This includes fees imposed for using credit card and klia2 fees. There are also other unspecified charges that are being reviewed by MAVCOM. If this article is true, AirAsia and AirAsia X could be impacted in the short-term. However, we believe both airlines will eventually raise their ticket prices to claw back the 'lost' revenues. | |
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| | MACRO RESEARCH | | | | | | ASEAN Equities Party Still On but now it's Slow Dance
by Nik Ihsan Raja Abdullah |
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| | | | | | Recent rally lifted MXSO Index above the 61.8% Fibonacci level. The upward trajectory was so strong that the index also took out two other key resistances at 863.40 and 905.50. At the moment, the bull does seem intact, but intermittent profit taking could take place backed by bearish divergence in smaller timeframe chart. We peg our resistance at 969.60 while support is at 863.40. | |
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| NEWS | | | Outside Malaysia:
E.U: Closes in on fresh trade deal as Trump puts up barriers. Europe is approaching the next stop in its global market-opening drive aimed at countering U.S. President Donald Trump's protectionist tilt. Top officials from the European Union will meet with the Mercosur group of Argentina, Brazil, Paraguay and Uruguay on Jan. 30 in Brussels to gauge the prospects for a free-trade deal that would follow ground-breaking commercial pacts with Japan and Canada. The EU-Mercosur talks began almost two decades ago, faltered and were re-started in 2010. Trump's move into the White House a year ago with his "America First" agenda prompted an EU push to wrap up the negotiations, which advanced before getting hung up last month over the politically sensitive issues of agriculture and cars. (Source: Bloomberg)
E.U: Euro Area looks strong but weak inflation as economy powers on into 2018. The euro area is set to start the new year the way it ended the old: the economy is strong but inflation is weak. The region's fastest growth in a decade will be confirmed this week in a burst of data that should also show economic confidence at the highest since the currency bloc's early days, unemployment at a post-crisis low, and manufacturing continuing to boom. Yet inflation, the key metric for the European Central Bank, will probably be the slowest in a year. (Source: Bloomberg)
Indonesia: Asks India to reconsider palm oil import duty hike. Rising import duties of vegetable oils will affect shipments of Indonesian palm oil to India, Cabinet Secretariat says in statement on its website, citing President Joko Widodo. Lower exports from Indonesia will curb India's ability to meet its growing needs, Widodo, known as Jokowi says. India is Indonesia's biggest buyer of palm oil. (Source: Bloomberg)
Crude Oil: Holds gains near 3-year high as funds raise bullish bets. Hedge funds reported record wagers on continued price increases for both U.S. and global oil benchmarks, along with gasoline and diesel. Iran Oil Minister Bijan Namdar Zanganeh says USD60/bbl is a "good" price; higher prices will encourage output of more expensive oil such as shale, and then prices will drop and OPEC will lose market share, according to state-run Iranian Students News Agency. (Source: Bloomberg) | |
| | | | | Other News:
Cypark: Wins MYR260.5m solar plant job in Negeri Sembilan. The group won a contract worth RM260.51 million for works related to a large-scale solar photovoltaic plant in Negeri Sembilan. It accepted a conditional letter of award from Cove Suria S/B, and will effectively work on the 30MW plant situated in Empangan Kelinchi. (Source: The Edge Financial Daily)
Pesona Metro: Gets MYR161.86m construction job from Sime Darby. The group has received a MYR161.86m contract from Sime Darby Property (Subang) S/B for the construction of a property project in Subang Jaya. The letter of award is for main building works for the proposed development of 30-storey serviced apartments. The project is for a duration of 39 months commencing from January 30, 2018. (Source: The Sun Daily)
Melati Ehsan: Sells land to Kimlun for MYR68m. The group is disposing of 47 vacant detached lots and 30 leasehold building lots in Shah Alam to Kimlun Corp for MYR68.41m cash. Melati Ehsan said proceeds derived from the proposed disposal will be utilised as working capital and the estimated gain from the exercise is MYR1.15m. (Source: The Sun Daily)
GFM Services: Acquires KPMD to boost order book to MYR1.5b. The group proposed purchase of KP Mukah S/B (KPMD), which holds a university concession, will raise its order book to MYR1.5b while generating stable cashflow. The integrated facilities management services provider inked a conditional share sale agreement today with property developer Kumpulan Parabena S/B for the 100% acquisition of KP Mukah for MYR130m. (Source: The Edge Financial Daily) | |
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