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RESEARCH | | | Genting Plantations | Dividends surprised on the upside (GENP MK, CP MYR9.80, BUY, TP MYR12.10, Plantations)
Chee Ting Ong | | | | Hong Leong Financial Group | HL Bank continues to surprise
Desmond Ch'ng | | | | Hong Leong Bank | 2QFY18 results above expectations
Desmond Ch'ng | | | | Petronas Gas | A pleasant finish
Chi Wei Tan | | | | Wah Seong | FY17: Ahead of expectations
Thong Jung Liaw | | | | CIMB Group Holdings | Niaga: 4Q17 results in-line
Desmond Ch'ng | | | | Sunway Construction Group | 4Q17: Slight shortfall (SCGB MK, CP MYR2.46, HOLD, TP MYR2.63, Construction)
Adrian Wong | | | | Sime Darby Property | Earnings on track (SDPR MK, CP MYR1.35, HOLD, TP MYR1.58, Property)
Wei Sum Wong | | | | TIME dotCom | IRU sales return
Chi Wei Tan | | | | KPJ Healthcare | 4Q17: A stellar quarter
Adrian Wong | | | | Padini | 2QFY18 earnings in-line
Kevin Wong | | | | KNM Group | FY17: Missed expectations
Thong Jung Liaw | | | | Harbour-Link Group | Fairly valued
Yen Ling Lee | | | | Media Chinese International | Too challenging (MCIL MK, CP MYR0.39, D/G SELL, TP MYR0.33, Services)
Jade Tam | | | | QL Resources | 3QFY17: No surprises
Liew Wei Han | | | | | |
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| | | | | | | | | | | | | | Share Price: | MYR9.80 | Target Price: | MYR12.10 | Recommendation: | Buy | | |
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| | | Dividends surprised on the upside (GENP MK, CP MYR9.80, BUY, TP MYR12.10, Plantations) | | FY17's dividends surprised but not profits. GENP declared a special DPS of 11sen (payable 9 Mar) and a final DPS of 9.5sen, bringing total FY17 DPS to 26sen (FY16: 21sen). Upcoming KL-SG high speed rail land development at Batu Pahat and its 11% 3-yr 2017-20E FFB output growth are key catalysts. We tactically upgrade GENP to a BUY, given 23% upside to our new TP of MYR12.10 (previously MYR11.16) as we roll forward valuation to 2018, pegging on an unchanged 26x PER (its 5-year mean). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,480.0 | 1,804.3 | 1,841.7 | 1,977.4 | EBITDA | 558.4 | 634.3 | 722.8 | 802.7 | Core net profit | 266.1 | 335.1 | 374.5 | 425.6 | Core EPS (sen) | 33.5 | 41.7 | 46.6 | 53.0 | Core EPS growth (%) | 27.5 | 24.5 | 11.7 | 13.6 | Net DPS (sen) | 21.0 | 26.0 | 18.7 | 21.2 | Core P/E (x) | 29.2 | 23.5 | 21.0 | 18.5 | P/BV (x) | 1.8 | 1.8 | 1.7 | 1.6 | Net dividend yield (%) | 2.1 | 2.7 | 1.9 | 2.2 | ROAE (%) | 8.0 | 7.8 | 8.4 | 9.1 | ROAA (%) | 3.6 | 4.2 | 4.2 | 4.2 | EV/EBITDA (x) | 16.9 | 15.4 | 12.7 | 11.4 | Net debt/equity (%) | 12.9 | 24.2 | 21.6 | 19.5 |
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| | | | | | | | | | | | Share Price: | MYR18.46 | Target Price: | MYR20.80 | Recommendation: | Buy | | |
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| | | HL Bank continues to surprise | | HL Bank's results continued to surprise positively for the third consecutive quarter, leading to better earnings at HLFG as well. At their current prices, HLFG's market cap of MYR21.1b is a 14% discount to its share of HL Bank's market cap i.e. MYR24.5b, yet again reinforcing our preference for HLFG (BUY). Our RNAV-TP, meanwhile, is raised to MYR20.80 from MYR19.90 to reflect the upgrade in HL Bank's valuations. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 4,543.3 | 5,034.6 | 5,314.1 | 5,599.9 | Pre-provision profit | 2,258.9 | 2,812.3 | 3,014.7 | 3,212.6 | Core net profit | 1,489.5 | 1,608.8 | 1,818.5 | 1,921.7 | Core EPS (MYR) | 1.35 | 1.41 | 1.59 | 1.68 | Core EPS growth (%) | (9.0) | 4.2 | 13.0 | 5.7 | Net DPS (MYR) | 0.38 | 0.38 | 0.46 | 0.49 | Core P/E (x) | 13.7 | 13.1 | 11.6 | 11.0 | P/BV (x) | 1.4 | 1.3 | 1.3 | 1.2 | Net dividend yield (%) | 2.1 | 2.1 | 2.5 | 2.7 | Book value (MYR) | 13.37 | 14.47 | 14.38 | 15.57 | ROAE (%) | 10.5 | 10.1 | 11.0 | 11.2 | ROAA (%) | 0.7 | 0.7 | 0.8 | 0.8 |
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| | | | | | | | | | | | Share Price: | MYR18.52 | Target Price: | MYR18.75 | Recommendation: | Hold | | |
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| | | 2QFY18 results above expectations | | HL Bank's 2QFY18 results were above expectations, on strong contributions from BOC and a lower tax rate. Our earnings forecasts are raised by 5% p.a. and our TP is raised to MYR18.75 from MYR17.70 on rolling forward valuations to CY19 on a higher PBV peg of 1.5x (ROE: 10.9%) vs 1.4x previously (ROE: 10.4%). HOLD maintained and we prefer HLFG (HLFG MK; BUY; TP: MYR20.80) for indirect exposure instead. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 4,177.9 | 4,550.6 | 4,842.3 | 5,085.8 | Pre-provision profit | 2,263.1 | 2,543.1 | 2,767.9 | 2,941.6 | Core net profit | 2,075.4 | 2,145.0 | 2,575.6 | 2,713.6 | Core EPS (MYR) | 1.09 | 1.05 | 1.23 | 1.30 | Core EPS growth (%) | (16.7) | (3.6) | 17.7 | 5.4 | Net DPS (MYR) | 0.41 | 0.45 | 0.53 | 0.56 | Core P/E (x) | 17.0 | 17.7 | 15.0 | 14.2 | P/BV (x) | 1.9 | 1.8 | 1.7 | 1.6 | Net dividend yield (%) | 2.2 | 2.4 | 2.9 | 3.0 | Book value (MYR) | 9.74 | 10.47 | 11.14 | 11.85 | ROAE (%) | 11.0 | 9.8 | 11.0 | 10.9 | ROAA (%) | 1.1 | 1.1 | 1.3 | 1.3 |
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| | | | | | | | | | | | Share Price: | MYR17.66 | Target Price: | MYR19.50 | Recommendation: | Buy | | |
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| | | A pleasant finish | | PTG's FY17 results were in line. A results call will be held Tuesday afternoon, but is unlikely to contain material updates pertaining to TPA discussions. We view risk-reward as being attractive, with the stock still offering over 10% upside even under a 50% probability of an adverse TPA outcome (TP is lowered to MYR19.50 from MYR23.00). Reiterate BUY. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 4,561.3 | 4,809.6 | 5,243.8 | 5,294.9 | EBITDA | 2,968.1 | 3,170.8 | 3,346.8 | 3,366.1 | Core net profit | 1,747.2 | 1,777.6 | 1,866.6 | 1,927.0 | Core EPS (sen) | 88.3 | 89.8 | 94.3 | 97.4 | Core EPS growth (%) | (0.1) | 1.7 | 5.0 | 3.2 | Net DPS (sen) | 62.0 | 66.0 | 66.0 | 68.2 | Core P/E (x) | 20.0 | 19.7 | 18.7 | 18.1 | P/BV (x) | 2.9 | 2.8 | 2.7 | 2.6 | Net dividend yield (%) | 3.5 | 3.7 | 3.7 | 3.9 | ROAE (%) | 14.9 | 14.6 | 14.6 | 14.4 | ROAA (%) | 11.3 | 10.4 | 10.4 | 10.4 | EV/EBITDA (x) | 14.4 | 11.2 | 10.5 | 10.2 | Net debt/equity (%) | 4.0 | 4.6 | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR4.12 | Target Price: | MYR4.70 | Recommendation: | Buy | | |
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| | | Looking beyond FY18 | | Alliance Bank's investments in new products and its restructuring should start to bear fruit from FY19 onwards, while NIMs are expected to expand further with the recent OPR hike in Jan 2018. We upgrade FY19/20E earnings by 4%/2% and roll forward valuations to CY19 on a higher PBV peg of 1.2x, supported by a higher ROE of 10.1% (1.1x previously; ROE: 9.7%). Our TP is correspondingly raised from MYR4.00 to MYR4.70 and we upgrade to BUY from HOLD. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Operating income | 1,424.1 | 1,469.4 | 1,558.5 | 1,644.6 | Pre-provision profit | 735.2 | 777.5 | 794.3 | 857.9 | Core net profit | 522.0 | 512.1 | 516.2 | 555.5 | Core FDEPS (MYR) | 0.34 | 0.34 | 0.34 | 0.36 | Core FDEPS growth(%) | (1.7) | (1.9) | 0.8 | 7.6 | Net DPS (MYR) | 0.14 | 0.16 | 0.16 | 0.17 | Core FD P/E (x) | 12.1 | 12.3 | 12.2 | 11.3 | P/BV (x) | 1.3 | 1.2 | 1.2 | 1.1 | Net dividend yield (%) | 3.5 | 3.9 | 3.9 | 4.2 | Book value (MYR) | 3.17 | 3.35 | 3.52 | 3.71 | ROAE (%) | 11.2 | 10.3 | 9.8 | 10.1 | ROAA (%) | 1.0 | 0.9 | 0.9 | 1.0 |
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| | | | | | | | | | | | Share Price: | MYR0.87 | Target Price: | MYR1.02 | Recommendation: | Buy | | |
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| | | FY17 in line | | FY17 results came in line. Operating prospects are improving. BArmada expects to secure 2 final acceptances for FPSOs Olombendo & Kraken by 1H18. Tenders pipeline for FPSOs is strong with several prospects in the pipeline. We raise our TP to MYR1.02, as we roll over our valuations to FY18 and remove NPV discounts on the 2 said FPSOs. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,317.4 | 2,402.2 | 2,627.9 | 2,616.3 | EBITDA | 392.7 | 1,342.6 | 1,440.7 | 1,430.9 | Core net profit | (163.8) | 219.0 | 478.7 | 481.2 | Core EPS (sen) | (2.8) | 3.7 | 8.2 | 8.2 | Core EPS growth (%) | nm | nm | 118.6 | 0.5 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | 23.3 | 10.7 | 10.6 | P/BV (x) | 0.9 | 0.9 | 0.9 | 0.8 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | (30.4) | 6.3 | 8.3 | 7.7 | ROAA (%) | (0.8) | 1.1 | 2.5 | 2.6 | EV/EBITDA (x) | 34.6 | 10.6 | 9.8 | 9.4 | Net debt/equity (%) | 176.3 | 175.3 | 150.2 | 128.8 |
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| | | | | | | | | | | | Share Price: | MYR1.67 | Target Price: | MYR1.86 | Recommendation: | Buy | | |
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| | | FY17: Ahead of expectations | | FY17 results came in above ours/ consensus forecasts, on a stronger-than-expected 4Q17, prompting a 1-3% upgrade in our FY18-19 earnings estimates and TP, based on 12x FY18 PER (unchanged). NS2 will continue to drive WSC's prospects up to 2019 and WSC will continue to strengthen its balance sheet via assets disposal/ sales & leaseback schemes (totalling up to MYR200m). Maintain BUY. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,276.6 | 2,492.1 | 2,503.3 | 2,520.3 | EBITDA | 53.6 | 287.1 | 343.4 | 344.4 | Core net profit | (23.3) | 94.2 | 114.5 | 115.8 | Core EPS (sen) | (3.0) | 12.2 | 14.8 | 15.0 | Core EPS growth (%) | nm | nm | 21.6 | 1.1 | Net DPS (sen) | 0.5 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | 13.7 | 11.3 | 11.1 | P/BV (x) | 1.6 | 1.4 | 1.3 | 1.1 | Net dividend yield (%) | 0.3 | 0.0 | 0.0 | 0.0 | ROAE (%) | (23.2) | 13.5 | 12.0 | 10.8 | ROAA (%) | (0.8) | 3.3 | 3.5 | 3.4 | EV/EBITDA (x) | 30.4 | 5.7 | 5.1 | 4.5 | Net debt/equity (%) | 104.7 | 68.2 | 32.9 | 11.5 |
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| | | | | | | | | | | | Share Price: | MYR7.20 | Target Price: | MYR7.70 | Recommendation: | Hold | | |
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| | | Niaga: 4Q17 results in-line | | Niaga's 4Q17 results were within expectations, as were the guidance for FY18. Generally, loan growth is expected to pick up pace and credit costs are to head lower amid an improved economic environment, but NIMs have peaked and will continue to compress. Our forecasts for CIMB Group are maintained pending the release of its 4Q17 results on 28 Feb, along with our HOLD call and MYR7.70 TP (FY19 PBV peg of 1.4x, ROE: 10.4%). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Operating income | 15,395.8 | 16,065.3 | 16,935.0 | 17,450.1 | Pre-provision profit | 6,146.8 | 7,413.6 | 7,993.5 | 8,328.0 | Core net profit | 3,411.2 | 3,414.4 | 4,457.7 | 4,849.6 | Core EPS (MYR) | 0.40 | 0.39 | 0.50 | 0.55 | Core EPS growth (%) | 5.6 | (2.4) | 27.9 | 8.8 | Net DPS (MYR) | 0.14 | 0.20 | 0.26 | 0.28 | Core P/E (x) | 17.9 | 18.3 | 14.3 | 13.2 | P/BV (x) | 1.5 | 1.4 | 1.3 | 1.3 | Net dividend yield (%) | 1.9 | 2.8 | 3.6 | 3.9 | Book value (MYR) | 4.87 | 5.24 | 5.37 | 5.64 | ROAE (%) | 8.7 | 7.9 | 9.6 | 10.0 | ROAA (%) | 0.8 | 0.7 | 0.9 | 1.0 |
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| | | | | | | | | | | | Share Price: | MYR2.46 | Target Price: | MYR2.63 | Recommendation: | Hold | | |
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| | | 4Q17: Slight shortfall (SCGB MK, CP MYR2.46, HOLD, TP MYR2.63, Construction) | | SCG's FY17 net profit of MYR138m fell short on the back of slower-than-expected contribution from the precast division. This is despite the stronger showing from the construction segment on the back of high works recognition. We make no change to our earnings forecasts pending an update with management. SCG declared an interim dividend of 4sen in 4Q17, bring its total payout in FY17 to 7sen (66% payout ratio) above its minimum payout of 35%. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,788.8 | 2,076.3 | 2,814.4 | 3,271.7 | EBITDA | 188.3 | 202.4 | 297.3 | 312.1 | Core net profit | 123.5 | 137.8 | 212.1 | 220.3 | Core EPS (sen) | 9.6 | 10.7 | 16.4 | 17.1 | Core EPS growth (%) | (2.9) | 11.6 | 53.9 | 3.9 | Net DPS (sen) | 5.0 | 7.0 | 5.7 | 6.0 | Core P/E (x) | 25.7 | 23.1 | 15.0 | 14.4 | P/BV (x) | 6.5 | 5.7 | 4.6 | 3.8 | Net dividend yield (%) | 2.0 | 2.8 | 2.3 | 2.4 | ROAE (%) | 26.2 | 26.3 | 34.1 | 28.9 | ROAA (%) | 8.2 | 7.9 | 9.9 | 8.4 | EV/EBITDA (x) | 9.9 | 14.3 | 8.2 | 7.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR1.35 | Target Price: | MYR1.58 | Recommendation: | Hold | | |
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| | | Earnings on track (SDPR MK, CP MYR1.35, HOLD, TP MYR1.58, Property) | | Stronger 1HFY6/18 earnings was driven by asset sales and came in within our expectation but above consensus. Sales were also on track to meet its FY18 sales target. We maintain our earnings forecasts for now as earnings should normalise in 2HFY18. Our MYR1.58 RNAV-TP (on 0.55x P/RNAV) is also unchanged. Maintain HOLD. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,590.7 | 2,564.4 | 1,712.9 | 2,342.8 | EBITDA | 1,033.1 | 556.2 | 1,018.9 | 915.8 | Core net profit | 749.1 | 607.9 | 829.1 | 541.5 | Core EPS (sen) | 11.0 | 8.9 | 12.2 | 8.0 | Core EPS growth (%) | 33.6 | (18.8) | 36.4 | (34.7) | Net DPS (sen) | 0.0 | 0.0 | 2.4 | 1.6 | Core P/E (x) | 12.3 | 15.1 | 11.1 | 17.0 | P/BV (x) | 1.7 | 1.5 | 0.9 | 0.9 | Net dividend yield (%) | 0.0 | 0.0 | 1.8 | 1.2 | ROAE (%) | 18.2 | 10.7 | 10.2 | 5.4 | ROAA (%) | 6.2 | 4.5 | 5.7 | 3.5 | EV/EBITDA (x) | na | na | 10.9 | 13.1 | Net debt/equity (%) | 22.4 | 1.4 | 16.7 | 23.6 |
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| | | | | | | | | | | | Share Price: | MYR8.04 | Target Price: | MYR8.50 | Recommendation: | Hold | | |
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| | | IRU sales return | | FY17 results were ahead of our forecast (but below consensus) due to the presence of IRU sales in 4Q17. Maintain HOLD with a higher MYR8.50 TP (+1%) post our earnings revisions. In our view, TDC's growth prospects appear largely priced-in for now, with no strong rerating catalysts in the horizon. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 766.9 | 860.7 | 956.3 | 1,066.6 | EBITDA | 292.6 | 297.2 | 334.7 | 373.3 | Core net profit | 246.6 | 175.4 | 201.4 | 234.2 | Core EPS (sen) | 42.8 | 30.2 | 34.6 | 40.3 | Core EPS growth (%) | 43.5 | (29.2) | 14.5 | 16.3 | Net DPS (sen) | 30.6 | 17.2 | 8.7 | 10.1 | Core P/E (x) | 18.8 | 26.6 | 23.2 | 20.0 | P/BV (x) | 2.1 | 2.1 | 2.3 | 2.1 | Net dividend yield (%) | 3.8 | 2.1 | 1.1 | 1.3 | ROAE (%) | 19.1 | 7.9 | 9.4 | 11.2 | ROAA (%) | 9.2 | 6.0 | 6.5 | 7.0 | EV/EBITDA (x) | 14.2 | 17.2 | 13.1 | 11.4 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.93 | Target Price: | MYR1.08 | Recommendation: | Hold | | |
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| | | 4Q17: A stellar quarter | | 4Q17 results were above ours/consensus forecasts largely supported by the Malaysian operations which reported stronger-than-expected profits. We raise our FY18E/FY19E earnings by 9%/6% taking into account a lower tax rate and assuming lower cost as its greenfield hospitals reach the end of their gestation period. Consequently, we derive a higher SOP-based TP of MYR1.08 (from MYR1.05). HOLD for now. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 3,021.1 | 3,180.0 | 3,463.5 | 3,731.7 | EBITDA | 351.6 | 391.1 | 443.4 | 461.7 | Core net profit | 125.4 | 161.9 | 163.2 | 170.3 | Core EPS (sen) | 2.9 | 3.7 | 3.8 | 4.0 | Core EPS growth (%) | (17.4) | 28.5 | 3.1 | 4.4 | Net DPS (sen) | 1.2 | 1.8 | 1.9 | 2.0 | Core P/E (x) | 32.1 | 25.0 | 24.3 | 23.3 | P/BV (x) | 2.5 | 2.3 | 2.2 | 2.1 | Net dividend yield (%) | 1.3 | 1.9 | 2.1 | 2.2 | ROAE (%) | 9.8 | 10.0 | 9.2 | 9.2 | ROAA (%) | 3.2 | 4.1 | 3.8 | 3.6 | EV/EBITDA (x) | 16.7 | 14.6 | 12.1 | 11.8 | Net debt/equity (%) | 72.2 | 76.7 | 69.4 | 68.7 |
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| | | | | | | | | | | | Share Price: | MYR5.35 | Target Price: | MYR5.15 | Recommendation: | Hold | | |
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| | | 2QFY18 earnings in-line | | 2QFY6/18 results and third interim net DPS of 2.5sen (YTD: 5.0sen) were within estimates. YoY earnings were driven by organic growth and new stores' contributions but partly mitigated by higher cost of goods and steeper opex. We maintain our earnings forecasts but raise our TP by 40sen to MYR5.15 (pegged to 18x FY19 PER) on rolling forward valuation. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,301.2 | 1,570.9 | 1,794.2 | 2,019.4 | EBITDA | 221.7 | 249.0 | 282.6 | 305.9 | Core net profit | 137.9 | 156.1 | 177.7 | 188.3 | Core EPS (sen) | 21.0 | 23.7 | 27.0 | 28.6 | Core EPS growth (%) | 71.9 | 13.2 | 13.9 | 6.0 | Net DPS (sen) | 11.5 | 11.5 | 10.0 | 10.0 | Core P/E (x) | 25.5 | 22.6 | 19.8 | 18.7 | P/BV (x) | 7.5 | 6.4 | 5.3 | 4.5 | Net dividend yield (%) | 2.1 | 2.1 | 1.9 | 1.9 | ROAE (%) | 31.4 | 30.8 | 29.2 | 25.9 | ROAA (%) | 19.7 | 18.6 | 18.7 | 17.1 | EV/EBITDA (x) | 5.8 | 7.8 | 10.8 | 9.7 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.23 | Target Price: | MYR0.25 | Recommendation: | Hold | | |
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| | | FY17: Missed expectations | | FY17 results came in below ours/consensus FY estimates on weak 4Q17. That said, our earnings estimates are unchanged. Execution is key in FY18. KNM needs to deliver its Thai operations to expectation and manage costs well to warrant a re-rating. Otherwise, the prospect of its Peterborough project (a game changer for KNM) will be ignored despite securing financial closure in 4Q17. Our unchanged MYR0.25 TP is based on 0.5x FY17 NTA (in line with peers). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,646.8 | 1,390.3 | 1,551.0 | 1,772.6 | EBITDA | (160.8) | 88.9 | 142.0 | 184.1 | Core net profit | (262.3) | (8.6) | 45.2 | 78.4 | Core EPS (sen) | (12.3) | (0.4) | 1.9 | 3.3 | Core EPS growth (%) | nm | nm | nm | 73.4 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | nm | 12.3 | 7.1 | P/BV (x) | 0.2 | 0.2 | 0.2 | 0.2 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | (12.2) | (0.6) | 1.9 | 3.2 | ROAA (%) | (5.8) | (0.2) | 1.0 | 1.8 | EV/EBITDA (x) | nm | 16.4 | 10.2 | 7.5 | Net debt/equity (%) | 37.4 | 39.5 | 35.9 | 32.3 |
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| | | | | | | | | | | | Share Price: | MYR0.74 | Target Price: | MYR0.78 | Recommendation: | Hold | | |
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| | | Fairly valued | | 2QFY6/18 results were above our expectation on stronger logistics earnings. We think prospective earnings could sustain given the rise in manufacturing and construction activities in East Malaysia. We raise our FY18-20E EPS by 7% p.a.. Consequently, our SOP-TP is raised to MYR0.78 (+3%). The stock presently trades at its mean PER of 8x – maintain HOLD. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 592.7 | 521.5 | 639.6 | 665.2 | EBITDA | 133.3 | 63.2 | 83.7 | 87.3 | Core net profit | 59.0 | 26.8 | 38.6 | 41.6 | Core EPS (sen) | 14.7 | 6.7 | 9.6 | 10.4 | Core EPS growth (%) | 22.5 | (54.6) | 44.0 | 7.7 | Net DPS (sen) | 2.0 | 1.5 | 2.2 | 2.3 | Core P/E (x) | 5.0 | 11.0 | 7.7 | 7.1 | P/BV (x) | 0.9 | 0.9 | 0.8 | 0.7 | Net dividend yield (%) | 2.7 | 2.0 | 2.9 | 3.1 | ROAE (%) | na | na | na | na | ROAA (%) | 10.0 | 4.5 | 6.1 | 6.2 | EV/EBITDA (x) | 3.1 | 5.3 | 4.0 | 3.5 | Net debt/equity (%) | 0.4 | 2.2 | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.39 | Target Price: | MYR0.33 | Recommendation: | Sell | | |
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| | | Too challenging (MCIL MK, CP MYR0.39, D/G SELL, TP MYR0.33, Services) | | 3QFY3/18 results fell short mainly due to higher-than-expected overhead costs. MCIL's is facing a very challenging operating environment in the near-term given ongoing poor adex sentiment and higher operating costs. As such, we lower our FY18-20 earnings estimates by 15%-17% and DPS estimates by c. 0.3-0.4sen p.a.. We now downgrade MCIL to SELL with a lower TP of MYR0.33 (from MYR0.39) based on 12x CY18 PER, mean. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,362.3 | 1,338.3 | 1,141.9 | 1,138.9 | EBITDA | 205.2 | 154.2 | 103.0 | 109.0 | Core net profit | 111.6 | 83.0 | 44.0 | 47.8 | Core EPS (sen) | 6.6 | 4.9 | 2.6 | 2.8 | Core EPS growth (%) | (22.7) | (25.7) | (47.0) | 8.6 | Net DPS (sen) | 4.3 | 3.2 | 1.8 | 2.0 | Core P/E (x) | 5.8 | 7.8 | 14.8 | 13.6 | P/BV (x) | 0.8 | 0.8 | 0.8 | 0.8 | Net dividend yield (%) | 11.1 | 8.3 | 4.7 | 5.1 | ROAE (%) | 12.9 | 7.9 | 5.4 | 6.0 | ROAA (%) | 7.1 | 5.6 | 3.3 | 4.0 | EV/EBITDA (x) | 5.5 | 6.1 | 4.1 | 3.4 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR4.95 | Target Price: | MYR4.00 | Recommendation: | Sell | | |
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| | | 3QFY17: No surprises | | 3QFY3/18 results were in line. Stronger performance in its livestock (ILF) division with overall better ASPs should continue to buffer the softer earnings of its marine (MPM) division, on lower fish cycle post El-Nino. We make no change to our earnings forecasts, DCF-TP and SELL call on lofty valuations. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,853.9 | 3,012.0 | 3,241.6 | 3,492.3 | EBITDA | 368.1 | 394.6 | 411.1 | 468.8 | Core net profit | 192.1 | 185.9 | 208.0 | 234.9 | Core EPS (sen) | 11.8 | 11.5 | 12.8 | 14.5 | Core EPS growth (%) | 4.9 | (3.2) | 11.9 | 12.9 | Net DPS (sen) | 4.3 | 7.3 | 5.2 | 5.8 | Core P/E (x) | 41.8 | 43.2 | 38.6 | 34.2 | P/BV (x) | 5.0 | 4.6 | 4.4 | 4.0 | Net dividend yield (%) | 0.9 | 1.5 | 1.1 | 1.2 | ROAE (%) | 12.7 | 11.7 | 11.6 | 12.3 | ROAA (%) | 7.1 | 6.2 | 6.4 | 6.9 | EV/EBITDA (x) | 16.5 | 16.4 | 21.9 | 19.3 | Net debt/equity (%) | 31.3 | 33.5 | 40.5 | 39.8 |
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| | MACRO RESEARCH | | | | | | FBMKLCI Index: Mixed Signal; Uptrend Still On Track
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI bucked the regional uptrend to close 1.42pts lower yesterday. At day's end, the benchmark index eased 0.08% to 1,860.08. Losses in MISC, SIME and GENM more than weighed on gains in banking stocks. Market breadth was negative with losers outpacing gainers by 513 to 479. A total of 2.72b shares worth MYR2.74b changed hands. Despite yesterday's setback, we believe market will likely bounce back today. | |
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| NEWS | | | Outside Malaysia:
U.S: Sales of new homes fall to lowest level since August. U.S. sales of new homes unexpectedly fell in January as borrowing costs rose and winter weather depressed demand, according to government data released. Single-family home sales dropped 7.8% MoM to 593k annualized pace after 643k rate. Median sales price increased 2.5% YoY to USD323,000. Supply of homes at current sales rate climbed to 6.1 months from 5.5 months; 301,000 new houses were on market at end of January, the most since March 2009. (Source: Bloomberg)
U.S: Fed gauges of factories' pricing power add to signs of inflation. More and more U.S. factories are getting some pricing power back. Robust orders for business equipment, steady consumer spending and improving economies around the world have stoked demand for raw materials. Acceleration in prices of just about everything from chemicals and fuel to lumber and metals has been in train for months. More recently, some producers have shown a greater ability to pass those costs onto their customers, based on the latest data from regional Federal Reserve banks. (Source: Bloomberg)
U.K: Consumer services grow at fastest pace in a year, CBI says. Britain's services sectors, making up the biggest part of the economy, saw growth improve this month, helped by a rebound at restaurants, bars and other consumer industries. After faster inflation meant a rough ride for household spending in 2017, the figures from the Confederation of British Industry suggest some improvement. Consumer services growth was the strongest in a year, while confidence also picked up. The report also showed that business services such as accountancy and marketing expanded at the fastest pace in more than two years in February. (Source: Bloomberg)
S. Korea: February consumer confidence falls to 108.2 from 109.9. Households' inflation expectation for next 12 months unchanged at 2.6%, Bank of Korea says in a statement. Survey based on responses from 1,965 households across the nation, conducted between Feb. 12-20. A reading below 100 indicates that pessimists outnumber optimists (Source: Bloomberg) | |
| | | | | Other News:
Vertice: Bags MYR59m EPCC project in Johor. The group has bagged a MYR59.13m contract for the provision of engineering, procurement, construction and commissioning for an interconnecting road in Pengerang, Kota Tinggi, Johor. The 14-month sub-contract will start today (Feb 26) and be completed by April 8, 2019. (Source: The Edge Financial Daily)
DNex: Wins two-year contract to supply directional drilling equipment to Baker Hughes. The group has won a two-year contract to provide directional drilling equipment to Baker Hughes (M) S/B in Asia Pacific and Middle East. Estimated at about MYR9m per year, the contract will begin on March 1, 2018 for two years and with an extension option of up to two years. (Source: The Edge Financial Daily)
Serba Dinamik: FY17 earnings double despite weaker Q4. Its earnings increased by 104% to MYR310.02m in the financial year ended Dec 31, 2017 compared with MYR151.83m a year ago. Revenue grew 92.6% to MYR2.712b from MYR1.408b. It proposed a final dividend of 1.6 sen a share. Serba Dinamik said operating profit was at MYR479m or 17.7% of total revenue. All segments are showing an improved operating profit. (Source: The Star)
Sunsuria: 1Q net profit soars 96% on new projects. The group saw its net profit for the first quarter of its current financial year (1QFY18) soar 96% to MYR20.84m, from MYR10.63m a year ago, as revenue rose 73.69% to MYR110.82m, from MYR63.8m. Its positive results for the quarter ended Dec 31, 2017 was due to two new projects, namely the Bell Suites SOHO and Monet Lily double-storey terrace. (Source: The Edge Financial Daily) | |
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