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| | | | | | | | | | | | | | Share Price: | MYR9.07 | Target Price: | MYR8.11 | Recommendation: | Sell | | |
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| | | MAVCOM's aeronautical charges framework | | MAVCOM released an Information Paper on the Aeronautical Charges Framework (ACF) for airports. Airports will move towards an incentive-based regulation (IBR) whereby charges are determined on a cost-based mechanism. The ACF is still under consultative stage and targets to be implemented by end-2019. IBR has generally provided a positive outcome, but the initial stages are often riddled with complex problems. No change to our forecasts, DCF-TP, SELL call pending a company visit. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 3,870.2 | 4,172.8 | 4,545.0 | 5,266.0 | EBITDA | 1,342.0 | 1,488.9 | 1,642.6 | 2,106.3 | Core net profit | (113.3) | 48.2 | 234.6 | 385.2 | Core EPS (sen) | (7.1) | 2.9 | 14.1 | 23.2 | Core EPS growth (%) | nm | nm | 386.7 | 64.2 | Net DPS (sen) | 1.0 | 1.7 | 8.3 | 9.0 | Core P/E (x) | nm | 312.2 | 64.2 | 39.1 | P/BV (x) | 1.6 | 1.7 | 1.7 | 1.6 | Net dividend yield (%) | 0.1 | 0.2 | 0.9 | 1.0 | ROAE (%) | 0.5 | 0.8 | 3.6 | 7.8 | ROAA (%) | (0.5) | 0.2 | 1.1 | 1.8 | EV/EBITDA (x) | 10.1 | 9.4 | 11.6 | 8.5 | Net debt/equity (%) | 52.2 | 46.1 | 45.2 | 30.1 |
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| | SECTOR RESEARCH | | | | | | Positive turnaround taking hold?
by Samuel Yin Shao Yang |
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| | | | | | After a near continuous seven years of 'recession', we gather that the NFO industry stabilized in 2017, thanks to strong jackpot sales growth. The gradual shift in sales mix from 4D to jackpot also ought to lead to higher and more stable margins for the individual NFOs. Read through from strong jackpot sales YTD indicates that the industry is off to a good start this year. We maintain our 2018 industry gross NFO revenue growth forecast of +2% YoY. Maintain POSITIVE view – we prefer BST over MAG. | |
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| | MACRO RESEARCH | | | | | | "High-5%" 4Q 2017 GDP growth
by Suhaimi Ilias |
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| | | | | | In 4Q 2017, manufacturing production and construction works moderated, index of services growth was stable, mining activities declined while agriculture sector growth picked up on surge in palm oil output. Based on these supply-side indicators, we estimated 4Q 2017 real GDP growth of +5.9% YoY (3Q 2017: +6.2% YoY). | |
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| | | | | | Stable jobless rate
by Suhaimi Ilias |
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| | | | | | **This email replaces the earlier version where we mistakenly headlined Philippines Labour Stats.** Unemployment rate in Dec 2017 was stable at 3.3% (Nov 2017: 3.3%) and improved slightly vs 3.4%-3.5% range in Dec 2015 - Oct 2017 period amid growth in manufacturing and services jobs. Full year average is 3.4%, in line with our 3.4% estimate (2016: 3.5%). Maintain our 2018 unemployment rate forecast of 3.3%. | |
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| | | | | | S&P 500 Index: Support at Critical Line
by Nik Ihsan Raja Abdullah |
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| | | | | | The S&P 500 Index went through a sharp correction in nine trading days. From a high of 2,873, the index plunged 340pts or 11.8% to a low of 2,533 before bargain hunting activities kicked in. VIX Index, on the other hand, spiked, reflecting increasing volatility. Notwithstanding that, the S&P500 Index has formed a "Hammer" bullish candlestick pattern on Friday, suggesting that the rebound from its major uptrend line will likely hold for now, with support seen at 2,500-2,550. | |
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| NEWS | | | Outside Malaysia:
U.K: House prices post first annual decline in six years at the start of 2018, with London leading the slump. Values fell 0.4% YoY in January, according to a report published by Acadata. Detailed data covering the fourth quarter of 2017 show London down 4.3% -- the most since the depths of the recession in 2009. "This is the eighth consecutive month in which the annual rate of increase has been declining, and now the dial is in the red zone," said Peter Williams, Acadata chairman. (Source: Bloomberg)
U.K: Household spending has first January dip since 2013. Household spending showed the first January drop since 2013, according to Visa's U.K. Consumer Spending Index data. Overall expenditure fell -1.2% YoY in January, following a -1% YoY drop in December. The latest reduction was the quickest seen since October, and indicates that spending has now fallen in eight of the past nine months. Drop in face-to-face expenditure quickened from December's -2.6% YoY to the fastest for three months at -4% YoY. Meanwhile, growth in E-commerce channel spending slowed to +1.5% YoY, the weakest since the current period of growth began in May 2017. (Source: Bloomberg)
China: Targets lenders' interbank dealings in effort to curb risk. China's attempt to curb financial risk has a new target -- the hundreds of smaller regional banks which have set up trading operations in Shanghai to borrow cheaply on the interbank market. The China Banking Regulatory Commission has asked lenders to wind down unlicensed operations in regions outside their home base, a move that is aimed at curbing smaller lenders' interbank business and forcing them to better serve the local economy, people familiar with the matter said on. The move could close at least 100 interbank operation centers for city and rural commercial banks in Shanghai that lacked proper licenses, the people said, asking not to be identified as the information hasn't been made public. Interbank lending and shadow-banking products are key targets in China's push to rein in risks associated with its USD 28tr debt pile. Regulators embarked on fresh measures from the beginning of this year to step up scrutiny of shadow financing with a focus on unravelling a web of interbank connections. (Source: Bloomberg)
China: To restrict outbound investment in properties, hotels. China will also restrict domestic companies' investment in cinemas, entertainment sector, sports club in overseas, according to list of sectors sensitive to outbound investment issued by National Development and Reform Commission on website. China is to restrict companies in setting up equity investment fund without real projects overseas. "Sensitive" sectors also include weapon developing, producing, maintaining, news media, cross-border water resources development and usage. List to take effect from March 1, 2018. (Source: Bloomberg) | |
| | | | | Other News:
RHB Bank: To buy remaining 51% stake in Vietnam Securities Corp for MYR21.3m. RHB Bank is planning to buy the remaining 51% equity interest in Vietnam Securities Corp (VSEC) for MYR21.3m (USD5.36m) cash. Its wholly owned unit RHB Investment Bank has entered into a conditional share purchase agreement with Chu Thi Phuong Dung, Truong Lan Anh and Viet Quoc Insurance Broker Joint Stock Company for the proposed acquisition. The proposed acquisition is subject to the approvals of Bank Negara Malaysia (BNM) and State Securities Commission of Vietnam (Vietnam SSC). Upon completion of the proposed acquisition, VSEC will become a wholly owned subsidiary of RHB Bank. The proposed acquisition is expected to be completed by the second quarter of 2018. (Source: The Sun Daily)
MBSB: CEO Ahmad Zaini now also Asian Finance Bank CEO. Malaysia Building Society (MBSB) president and CEO Datuk Seri Ahmad Zaini Othman has been appointed as the CEO of Asian Finance Bank (AFB) following the merger between the two Islamic banks. Tunku Alina Raja Muhd Alias, Lynette Yeow Su-Yin and Aw Hong Boo have been appointed as independent non-executive directors, while Sazaliza Zainuddin as non-independent non-executive director at AFB. Meanwhile, the existing directors Datuk Johar Che Mat and Datuk Azrulnizam Abdul Aziz remain as independent non-executive directors of AFB. (Source: The Sun Daily)
FGV: Terminates agreement for Vitamin E plant. Felda Global Ventures Holdings' (FGV) plan to develop a vitamin E plant in Kuantan, Pahang has been aborted. Its wholly owned subsidiary Felda Global Ventures Downstream S/B (FGVD) had terminated its JV and shareholders' agreement with Lipid Venture S/B (LVSB) after four years. The deal was inked on Nov 13, 2013 between the two parties to undertake the development, construction, fabrication and operation of a plant to be located in Kuantan, Pahang to produce tocotrienol (vitamin E) from refined bleached palm oil. (Source: The Sun Daily)
Kuantan Flor Mill: To expand starch, premix flour biz into China. Financially troubled Kuantan Flour Mill (KFM) is looking to expand its starch and premix flour business into China. On Feb 9, KFM entered into a memorandum of understanding (MoU) with Shou Guang Chang Tai Economic And Trade Co Ltd (SGCT) for a proposed collaboration through either a business collaboration arrangement between both parties or a direct acquisition of a majority equity interest in SGCT by KFM. The MoU will be terminated upon execution of the definitive agreement or in the event where both parties are unable to execute the definitive agreement within a period of six months from the MoU date. (Source: The Sun Daily) | |
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