STOCK FOCUS OF THE DAY
Gamuda: 1HFY18 net profit grows 26% YoY, bullish on MRT3 BUY
We maintain our BUY call, forecasts and SOP-based FV of RM5.95 which values Gamuda's construction business at 16x CY18 net profit, in line with our benchmark 1-year forward P/E of 14-16x for large-cap construction stocks.
Gamuda's 1HFY18 net profit came in at 55% and 52% of our full-year forecast and the full-year consensus estimates respectively. However, we consider the results within expectations as: (1) Gamuda’s quarterly construction profits could be volatile (depending on billings which could fluctuate), and 1Q and 2QFY18 numbers happened to come in at the top end of the range; and (2) there could be downside risk to its overall property margins in the coming quarters.
On the RM45bil MRT3, Gamuda expects a “favourable” decision from the government with regards to its bid for the turnkey contract via a 45:45:10 JV between MMC, itself and George Kent, and that the award could come “within weeks”. The contract is currently a two-horse race between the JV and China Communications Construction Company (CCCC).
Others :
Yinson Holdings: Potential redeployment from Ca Rong Do termination BUY
Oil & Gas Sector: Rising gas attraction amid digitalisation OVERWEIGHT
QUICK TAKES
Gent Malaysia: A short reprieve for Massachusetts casino case SELL
Plantation Sector: News flow for week 19 – 23 March NEUTRAL
RETAIL RESEARCH
Stocks On Radar: Eversendai Corp., Formosa Prosonic, AirAsia, Supercomnet Technologies
STRATEGY GLOBAL INVESTMENT
Trade War: Put option, adequate diversification to cushion impact
NEWS HIGHLIGHTS
Pentamaster: Plans dividend in two years
CAB Cakaran: Raises output
Eversendai: Upbeat about O&G prospects
Unimech Group: Eyes oil and gas markets in Asia
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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.
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