STOCK FOCUS OF THE DAY
Petronas Chemicals Group: Stabilising at the US$60-US$70/barrel range HOLD
We maintain our HOLD recommendation on Petronas Chemicals Group (PChem) with an unchanged fair value of RM8.35/share based on a FY19F EV/EBITDA of 8x, on par with its 3-year average. Our PChem’s FY18F-FY19F earnings have been fine-tuned as the group’s FY17 net profit of RM4,177mil came in within our expectation but 6% above consensus. The group declared a second interim dividend of 15 sen, raising FY17 DPS to 27 sen (+ 8 sen YoY) to deliver a payout ratio of 52%, in line with our expectations.
We note that the group’s 1HFY18 results are likely to be stronger as overall plant utilisation could rise from 93% in 4QFY18 to over 95% in the absence of any significant maintenance activities. However, 2HFY18 earnings could be softer as PChem’s ethylene cracker, methanol and ASEAN Bintulu Fertiliser plants will undergo turnaround activities, which could lead to an overall FY18F utilisation rate similar to 91% in FY17. PChem is currently trading at a fair 1-year forward EV/EBITDA of 8x, which translates to a 16% premium to Thailand’s PTT Global Chemicals
STOCKS ON RADAR
Comfort Gloves, Thong Guan Industries, Wellcall Holdings, M-Mode
NEWS HIGHLIGHTS
UEM Edgenta: Declares special dividend of 18 sen/share
Malaysia Airports Holdings: Upgrading baggage system
RHB Bank: Wants to wind up MP Corp
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
****************************************************************************************************************************************************************************************************************************************************************************************************************
DISCLAIMER:
This message may contain confidential and privileged information for its intended recipient(s) only. If you are not an intended recipient, you are hereby notified that any review, dissemination, and distribution, printing or copying of this message or any part thereof is strictly prohibited. Please delete the entire message and inform the sender of the error. Any opinions, conclusions and other information in this message that are unrelated to official business of AmBank Group are those of the individual sender and shall be understood as neither explicitly given nor endorsed by AmBank Group.
****************************************************************************************************************************************************************************************************************************************************************************************************************
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.