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| | | | | | | | | | | | | | Share Price: | MYR1.49 | Target Price: | MYR1.75 | Recommendation: | Buy | | |
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| | | Reliving Melaka's glory days | | Yong Tai is a tourism-related property developer that holds a 30-year concession to stage Encore Melaka, a show that retells the rich history of Melaka. We forecast core earnings to surge from <MYR1m in FY6/16 to >MYR150m by FY6/20. With 17% upside to our MYR1.75 TP, we initiate coverage with a BUY. We also see added upside of up to MYR0.61/shr to our TP if its remaining land bank is developed. We also note that entertainment shares performed well ahead of the opening of their major attractions. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 17.9 | 85.4 | 298.5 | 663.3 | EBITDA | 2.1 | 18.6 | 64.8 | 182.4 | Core net profit | 0.9 | 13.7 | 39.8 | 120.1 | Core FDEPS (sen) | 0.5 | 3.2 | 5.4 | 16.4 | Core FDEPS growth(%) | (83.2) | 492.7 | 70.4 | 201.4 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core FD P/E (x) | nm | 46.8 | 27.5 | 9.1 | P/BV (x) | 2.7 | 1.3 | 1.2 | 1.0 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | 1.0 | 6.9 | 11.1 | 25.7 | ROAA (%) | 0.7 | 3.9 | 5.3 | 11.2 | EV/EBITDA (x) | 72.4 | 29.8 | 14.7 | 4.8 | Net debt/equity (%) | net cash | net cash | 11.2 | net cash |
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| | | | | | | | | | | | Share Price: | MYR7.08 | Target Price: | MYR7.60 | Recommendation: | Hold | | |
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| | | Big cap with decent yield | | The stronger 4Q17 earnings were driven by both Petroleum and Heavy Engineering divisions, but still came in within our expectation. We maintain our FY18-19 EPS forecasts and introduce FY20, expecting EPS growth of 5%/4%/3% in FY18-20. We also maintain our HOLD call and SOP-based TP of MYR7.60. Stock is trading at its 1-year forward PER of 15x (mean) and offers decent dividend yield of 4.2%. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 9,597.2 | 10,037.7 | 9,785.8 | 9,960.1 | EBITDA | 3,898.8 | 4,074.3 | 4,245.0 | 4,453.3 | Core net profit | 1,914.0 | 2,027.7 | 2,098.5 | 2,176.4 | Core EPS (sen) | 42.9 | 45.4 | 47.0 | 48.8 | Core EPS growth (%) | (31.2) | 5.9 | 3.5 | 3.7 | Net DPS (sen) | 30.0 | 30.0 | 30.0 | 30.0 | Core P/E (x) | 16.5 | 15.6 | 15.1 | 14.5 | P/BV (x) | 0.8 | 0.9 | 0.9 | 0.9 | Net dividend yield (%) | 4.2 | 4.2 | 4.2 | 4.2 | ROAE (%) | na | na | na | na | ROAA (%) | 3.7 | 3.8 | 4.1 | 4.2 | EV/EBITDA (x) | 10.3 | 9.8 | 9.2 | 8.9 | Net debt/equity (%) | 15.4 | 16.1 | 18.0 | 18.1 |
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| | | | | | | | | | | | Share Price: | MYR32.88 | Target Price: | MYR35.00 | Recommendation: | Hold | | |
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| | | 4Q17: Illicit incidence remains high | | 4Q17 results were below expectations. Illicit incidence has inched higher and this limits BAT's pricing power. Its move into the Econ product range with the introduction of Rothmans in Oct 2017 may pressure margins in the near term, but the currency tailwind with a stronger MYRUSD may provide some buffer to its new import business model (since 2H17). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 3,756.4 | 3,002.3 | 3,122.3 | 3,264.3 | EBITDA | 929.9 | 654.9 | 731.0 | 769.3 | Core net profit | 675.1 | 522.4 | 540.3 | 569.6 | Core EPS (sen) | 236.4 | 183.0 | 189.2 | 199.5 | Core EPS growth (%) | (26.2) | (22.6) | 3.4 | 5.4 | Net DPS (sen) | 278.0 | 169.0 | 185.4 | 195.4 | Core P/E (x) | 13.9 | 18.0 | 17.4 | 16.5 | P/BV (x) | 15.3 | 24.6 | 23.9 | 23.2 | Net dividend yield (%) | 8.5 | 5.1 | 5.6 | 5.9 | ROAE (%) | 124.4 | 99.0 | 139.4 | 142.7 | ROAA (%) | 56.2 | 46.6 | 51.2 | 52.7 | EV/EBITDA (x) | 13.8 | 18.0 | 13.3 | 12.7 | Net debt/equity (%) | 15.8 | 95.9 | 92.8 | 90.2 |
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| | MACRO RESEARCH | | | | | | Global Equities Bounced off from 200-day Moving Average
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI rose for a second day. At day's end, the benchmark rose 2.85pts to 1,833.02, led by gains in MAXIS, KLCCSS and AMM. Market breadth turned bullish for the first time this week, with gainers outpacing losers by 495 to 409. A total of 1.61b shares worth MYR2.43b changed hands. While sentiment remains positive, we caution that trading could be choppy ahead of the long weekend. Technically, we expect the index to trade between 1,820 and 1,840 today. Downside supports are 1,796 and 1,771. | |
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| NEWS | | | Outside Malaysia:
U.S: American households' outstanding debt climbed to an all-time high of USD13.1t in the October- December period, according to data released. It marked the fourth straight quarter in which borrowing reached a record. Debt balances increased from the previous quarter in all but one category, including a 3.2% gain in credit-card borrowing that was the second-largest since 2007 and a record level of auto loans. At the same time, 7.55% of credit- card balances were in serious delinquency -- those 90 days or more past due -- the highest since the first quarter of 2016, while the 4.05% delinquent share of car loans was the biggest since 2012.The overall share of 90-day delinquent loans fell to 3.12% from 3.19% on declines in the levels for mortgages and student loans. (Source: Bloomberg)
U.S: Federal Reserve Chairman Jerome Powell suggested that the U.S. central bank would push ahead with gradual interest-rate increases even as it remains on the lookout for threats to the financial system in the wake of the recent stock market rout. "We are in the process of gradually normalizing both interest rate policy and our balance sheet," he said in the text of his ceremonial swearing-in speech in Washington, adding, "We will remain alert to any developing risks to financial stability." They were Powell's first public comments since financial markets last week suffered their most severe bout of volatility in years, partly on concern that rising wages might spur inflation and prod the Fed into faster rate hikes. While the new Fed chairman didn't specifically mention the steep fall in share prices, other central bank officials have played down its impact on the economy and the financial system. (Source: Bloomberg)
U.K: Inflation held at 3% in January as downward pressure from auto fuel and food prices was offset by the cost of attractions such as zoos and gardens. Consumer prices fell 0.5% from December, as they did in January 2017, the Office for National Statistics said. Annual core inflation accelerated to 2.7% from 2.5%.The Bank of England expects inflation to subside this year as the effect of sterling's 2016 deprecation fades. (Source: Bloomberg)
Japan: Economy expanded for an eighth quarter, but the pace of growth fell sharply and missed expectations. GDP grew at an annualized rate of 0.5% in the three months ended Dec. 31 (estimate +1.0%).The contribution of net exports, or shipments less imports, to GDP growth was zero. Business spending rose 0.7% (estimate +1.1%) from the previous quarter. Private consumption increased 0.5% in the fourth quarter from the previous three months (estimate +0.4%). Japan's economy had cruised along at well above its potential growth rate in recent quarters, fueling growing confidence that an ever-tighter labor market and record corporate profits would generate stronger consumer spending and inflation. (Source: Bloomberg) | |
| | | | | Other News:
Seacera: Announces plan to buy into Teras Sari Resources, the day latter bags MYR338m contract. Tile manufacturer Seacera Group's unit Seacera Builders S/B proposes to buy a 70% stake in Teras Sari Resources S/B, a company which today accepted a letter of intent for road upgrading work in Pahang for MYR338m. Teras Sari Resources received and accepted a letter of intent from the Public Works Department for a MYR338m project to upgrade the trunk road from Pekan town to Kampung Sungai Miang, Pekan, Pahang. Seacera Builders entered into a heads of agreement, which is valid for 90 days, with LT Century Development S/B and LTC Holdings S/B for a 70% interest in construction and civil engineering company for a price to be decided later. (Source: The Sun Daily)
Puncak Niaga: Shareholders give nod for RPT. Puncak Niaga has gotten the green light from shareholders to take over TRIplc for MYR210m. The acquisition will enable Puncak Niaga to have a new core business – construction, to keep its concern going after the company disposed of its water treatment asset in Selangor for MYR1.55b in cash. TRIplc, to be known as Pimpinan Ehsan, will have to search for a new core business after the divestment to Puncak Niaga. It is a related party transaction (RPT). Tycoon Tan Sri Rozali Ismail is the executive chairman of and a major shareholder in Puncak Niaga through his investment vehicle Corporate Line (M) S/B and Central Plus (M) S/B. Rozali is also a major shareholder in TRIplc, holding a 16.17% direct stake. (Source: The Edge Financial Daily)
MAHB: Poised to tap growing aerospace industry. Malaysia Airports Holdings (MAHB) is poised to tap the growing aviation-related industry after streamlining its businesses through the setting up of two subsidiaries. For its overseas foray, the airport operator would set up Malaysia Airports International by the end of this quarter. Its maintenance, repair and overhaul (MRO) and land development portfolios would be placed under another subsidiary, KLIA Aeropolis S/B. It will house the land development assets, as well as aviation support and logistics businesses. This will be realised latest by the first or second quarter of this year. Following this, MAHB would have three business lines – operations of airports in Malaysia, the aeropolis (airport city) business and the international business. (Source: The Edge Financial Daily)
Borneo Oil: Acquires quarry for MYR47m via 30-year sublease. Borneo Oil's wholly owned subsidiary Borneo Oil & Gas Corporation S/B is acquiring a quarry measuring 5.378ha in Lahad Datu, Sabah, for MYR47m as part of an on-going expansion plan into limestone mining and related activities as well as to export marble blocks. The acquisition which will be financed with internal funds, was done in the form of a sublease for a lease period of 30 years. The parcel of land located in Ulu Segama, in Lahad Datu District has a reserve of 6.27 million metric tons (MT). Marble blocks extracted from the quarry will be exported while the balance of resources to be used for limestone aggregates and related products. (Source: The Sun Daily) | |
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