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| | | | | | | | | | | | | | Share Price: | MYR3.78 | Target Price: | MYR4.20 | Recommendation: | Buy | | |
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| | | CRD FPSO impact removed | | Our lowered 6% SOP-based TP reflects: (i) the exclusion of FPSO CRD from the equation following the notification of a force majeure from client, Talisman Vietnam 07/03 BV and (ii) a revised forex assumption. Meanwhile, Yinson has officially received an interim contract for FPSO Lam Son effective 1 Jul 2017. We posit the market has priced in the FPSO CRF setback. We expect details on FPSO Layang to be made soon. BUY. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,038.6 | 764.2 | 1,000.5 | 1,139.7 | EBITDA | 261.0 | 283.8 | 560.9 | 697.6 | Core net profit | 173.1 | 219.5 | 375.3 | 340.5 | Core EPS (sen) | 16.2 | 20.6 | 35.2 | 31.9 | Core EPS growth (%) | 17.5 | 26.8 | 71.0 | (9.3) | Net DPS (sen) | 1.5 | 16.8 | 10.4 | 10.0 | Core P/E (x) | 23.3 | 18.4 | 10.7 | 11.8 | P/BV (x) | 1.8 | 1.7 | 1.3 | 1.2 | Net dividend yield (%) | 0.4 | 4.4 | 2.8 | 2.7 | ROAE (%) | 12.0 | 8.5 | 13.7 | 10.7 | ROAA (%) | 4.8 | 3.9 | 5.6 | 4.8 | EV/EBITDA (x) | 15.6 | 21.4 | 11.2 | 8.5 | Net debt/equity (%) | 51.9 | 114.7 | 72.9 | 54.9 |
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| | | | | | | | | | | | Share Price: | MYR5.47 | Target Price: | MYR5.50 | Recommendation: | Hold | | |
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| | | Kicking the ground | | We visited Axiata's Bangladesh, Sri Lanka and Indonesia operations. Both Robi and Dialog appear relatively better-positioned to peers in their respective markets. XL's plight is more challenging given an intensifying competitive landscape in the midst of SIM registration. Maintain HOLD on Axiata with an unchanged SOP-based MYR5.50 TP. Amid currency headwinds, we see risk-reward as being merely balanced presently. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 21,565.4 | 24,402.4 | 24,378.3 | 25,461.7 | EBITDA | 8,012.6 | 9,230.1 | 9,338.8 | 9,945.3 | Core net profit | 1,418.0 | 1,205.0 | 1,396.9 | 1,696.2 | Core EPS (sen) | 16.0 | 13.4 | 15.4 | 18.7 | Core EPS growth (%) | (33.1) | (16.1) | 15.2 | 21.4 | Net DPS (sen) | 8.0 | 8.5 | 13.1 | 15.9 | Core P/E (x) | 34.2 | 40.8 | 35.4 | 29.2 | P/BV (x) | 2.1 | 2.0 | 2.0 | 2.0 | Net dividend yield (%) | 1.5 | 1.6 | 2.4 | 2.9 | ROAE (%) | 2.1 | 3.8 | 5.6 | 6.8 | ROAA (%) | 2.2 | 1.7 | 2.0 | 2.4 | EV/EBITDA (x) | 8.0 | 7.3 | 7.3 | 6.9 | Net debt/equity (%) | 59.1 | 40.6 | 40.8 | 40.2 |
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| | MACRO RESEARCH | | | | | | KLCSU Index: Correction Ahead
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI rose 2.54pts to 1,862.45 yesterday, led by gains in PCHEM, SIME and PEP. Market breadth was positive with gainers outpacing losers by 463 to 433 while another 395 counters remained unchanged. A total of 2.04b shares worth MYR1.94b changed hands. Yesterday's rebound may not be sustainable following the sharp pullback in overnight US markets on renewed concerns of a trade war. Tech stocks could come under pressure today after Nasdaq tanked. | |
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| NEWS | | | Outside Malaysia:
U.S. Said to weigh emergency law for China investment crackdown. The Trump administration is considering a crackdown on Chinese investments in technologies the U.S. deems sensitive by invoking a law reserved for national emergencies, among other options, according to people familiar with the matter. Treasury Department officials are working on plans to identify technology sectors in which Chinese companies would be banned from investing, such as semiconductors and so-called 5G wireless communications, according to four people with knowledge of the proposal, who spoke on the condition of anonymity. (Source: Bloomberg)
U.S: Home prices in 20 cities advance more than forecast. A limited number of properties for sale against a backdrop of steady demand helped keep home prices elevated in January, according to S&P CoreLogic Case-Shiller data released. 20-city home-price index increased 6.4% YoY after rising 6.3% YoY. National gauge of home prices rose 6.2% YoY. (Source: Bloomberg)
U.S: Consumer confidence eases in March for first time this year on tempered optimism about the outlook for the economy, according to figures from the New York-based Conference Board. Confidence index fell to 127.7 from a revised 130 in February that was the highest since late 2000. Present conditions measure cooled to 159.9 from 161.2. Consumer expectations gauge dropped to 106.2 from 109.2. The softening in March reflected smaller shares of respondents who expect better business conditions, higher incomes and more job availability in the next six months. Fewer also said they anticipate stock prices will be higher in the year ahead. The figures show moods remain fairly upbeat amid a strong labor market and bigger after-tax paychecks that have the potential to drive consumer spending. (Source: Bloomberg)
EU: Euro-area economic confidence continued its slide in March as the region showed signs of entering a period of more moderate growth. Optimism slipped in the region's five biggest economies, taking the overall index to its lowest in six months. It's a third straight drop from a 17-year high reached in December. The report is the latest in a string of data suggesting economic growth in the currency bloc has cooled off after 2017 saw the fastest expansion in a decade. Purchasing Managers' Indexes showed manufacturing and services activity in the euro area is growing at its slowest pace in 14 months, while investor confidence dropped amid mounting fears of a trade war. (Source: Bloomberg)
U.K: Employers concerned about Brexit migration restrictions. British employers have become reliant on European Union workers and are concerned about restrictions when Britain leaves the bloc next year, according to a government-commissioned study published. "Employers were fearful about what the future migration system might be," the Migration Advisory Committee said in an interim report. "Many employers in lower-skilled sectors have built a business model in which the ready availability of EEA migrant labor played an important, sometimes vital, role." The U.K. has seen net migration from other EU countries plunge by more than a half since the 2016 Brexit referendum, with the decline most acute among citizens of the eight eastern countries, including Poland, that joined the bloc in 2004. (Source: Bloomberg) | |
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MAHB: To Exit airport business in Maldives with GMR Male sale. Malaysia Airports Holdings (MAHB) is exiting the airport business in Maldives via the disposal of its entire 23% stake in loss-making GMR Male International Airport Ltd for USD7.3M (MYR28.5m). MAHB expects to realise a gain of USD7.3m from the sale, as the total carrying value of GMR Male in the airport operator's book has been fully impaired in 2014. The airport operator had invested a total equity of USD6.9m for the 23% shares in GMR Male. (Source: The Edge Financial Daily)
Tenaga: Signs solar power purchase deals with six firms. Tenaga Nasional yesterday signed six large-scale solar photovoltaic (PV) power purchase agreements with special purpose companies (SPCs) set up by the winners of the competitive bidding organized by the Energy Commission in the first quarter of 2017. Each SPC will design, construct, own, operate and maintain a solar PV energy-generating facility with the approved capacity at its proposed location. The SPCs include Kenyir Gunkul Solar Sdn Bhd whose 29.99 megawatt (MW) capacity facility in Dungun, Terengganu has a scheduled commercial operational date of Dec 31, 2019. The other SPCs have an approved capacity of 30 MW each, including Idiwan Solar Sdn Bhd in Machang, Kelantan, and BGMC BRAS Power Sdn Bhd in Kuala Muda, Kedah, both targeted to begin commercial operations on Sept 20, 2020. (Source: The Edge Financial Daily) | |
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