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| | | | | | | | | | | | | | Share Price: | MYR2.93 | Target Price: | MYR3.79 | Recommendation: | Buy | | |
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| | | Earnings and sales to catch up later | | SPSB's 1Q18 net profit of MYR61.5m was in line. 3M18 property sales were also within expectation, accounted for 22% of its 2018 sales target of MYR5b. Sales should pick up post-GE14 with better sentiment and the MYR5.6b worth of new launches in the pipeline. We maintain our earnings forecasts and MYR3.79 RNAV-TP (on 0.75x RNAV peg). BUY. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 5,711.4 | 4,520.1 | 5,047.6 | 5,824.3 | EBITDA | 1,759.0 | 1,513.7 | 1,110.5 | 1,281.3 | Core net profit | 955.8 | 890.1 | 601.2 | 1,073.7 | Core FDEPS (sen) | 27.7 | 22.3 | 13.9 | 24.8 | Core FDEPS growth(%) | (21.5) | (19.4) | (37.9) | 78.6 | Net DPS (sen) | 20.0 | 15.5 | 7.4 | 13.9 | Core FD P/E (x) | 10.6 | 13.1 | 21.1 | 11.8 | P/BV (x) | 0.7 | 0.8 | 1.0 | 1.7 | Net dividend yield (%) | 6.8 | 5.3 | 2.5 | 4.7 | ROAE (%) | na | na | na | na | ROAA (%) | 4.7 | 3.4 | 2.0 | 3.4 | EV/EBITDA (x) | 7.4 | 12.0 | 21.6 | 19.4 | Net debt/equity (%) | 10.9 | 10.1 | 49.2 | 53.2 |
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| | | | | | | | | | | | Share Price: | MYR2.16 | Target Price: | MYR2.63 | Recommendation: | Hold | | |
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| | | Secures MYR180m hospital job | | SCG has secured an e.MYR722m of job wins YTD FY18 with this latest hospital building job win. No change to our earnings forecasts having imputed job win potentials. Maintain HOLD with an unchanged TP of MYR2.63 (16x FY18 PER/+1SD) pending the release of its 1Q18 results slated for 17 May 2018. | | |
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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) | 22.6 | 20.3 | 13.2 | 12.7 | P/BV (x) | 5.7 | 5.0 | 4.0 | 3.3 | Net dividend yield (%) | 2.3 | 3.2 | 2.7 | 2.8 | 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 | 6.9 | 6.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR7.00 | Target Price: | MYR7.45 | Recommendation: | Hold | | |
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| | | Maintaining dividend payout | | 1Q18 earnings were below expectations, dragged by the Petroleum and Heavy Engineering segments. However, first interim DPS is maintained at 7sen, supported by its operating cashflow. We cut our FY18/19/20E EPS by 18%/11%/4% as we lower our earnings estimates for Petroleum and Heavy Engineering segments. Consequently, our SOP-based TP is reduced to MYR7.45 (-2%). Post-earnings revision, the stock trades at its mean 16x 12M rolling forward PER and DY is decent at 4.3%. Reiterate HOLD. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 9,597.2 | 10,037.7 | 8,909.5 | 9,195.3 | EBITDA | 3,898.8 | 4,074.3 | 3,869.5 | 4,223.0 | Core net profit | 1,914.0 | 2,027.7 | 1,725.4 | 1,944.3 | Core EPS (sen) | 42.9 | 45.4 | 38.7 | 43.6 | Core EPS growth (%) | (31.2) | 5.9 | (14.9) | 12.7 | Net DPS (sen) | 30.0 | 30.0 | 30.0 | 30.0 | Core P/E (x) | 16.3 | 15.4 | 18.1 | 16.1 | P/BV (x) | 0.8 | 0.9 | 0.9 | 0.9 | Net dividend yield (%) | 4.3 | 4.3 | 4.3 | 4.3 | ROAE (%) | na | na | na | na | ROAA (%) | 3.7 | 3.8 | 3.4 | 3.8 | EV/EBITDA (x) | 10.3 | 9.8 | 10.1 | 9.4 | Net debt/equity (%) | 15.4 | 16.1 | 18.9 | 19.8 |
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| | MACRO RESEARCH | | | | | | Continued moderation in quarterly growth
by Suhaimi Ilias |
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| | | | | | 1Q 2018 real GDP will be out on 17 May 2018. Based on manufacturing, mining and palm oil output as well as services activities and construction works, we estimated a slower economic growth of +5.5% YoY last quarter (4Q 2017: +5.9% YoY). | |
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| | | | | | MYR – Poised for Greater Stability
by Saktiandi Supaat |
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| | | | | | We maintain our out-of-consensus USDMYR forecasts for this year at 3.85, 3.70 and 3.65 for 2Q, 3Q and 4Q, respectively. Current level of Ringgit remains fundamentally undervalued relative to our fair value estimates of 3.56 for USDMYR and we expect this misalignment to correct further in the longer term. MYR fundamentals remain well anchored by current account surplus, rising FX reserves, sustained growth pick-up and higher oil prices. We lowered USDMYR forecasts beyond 2018... | |
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| | | | | | FBMKLCI Index: Volatile & Vulnerable
by Nik Ihsan Raja Abdullah |
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| | | | | | After the long post election holiday, FBMKLCI went through a volatile session yesterday. The outcome for GE14 was unprecedented and unexpected, but the benchmark showed some resilience after succumbed to early selldown. At day's end, the index rose 3.91pts to 1,850.42, off its intraday low of 1,797.14. Overall, market breadth was positive with gainers outpacing losers by 930 to 405. A total of 6.58b shares worth MYR7.31b changed hands. | |
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| NEWS | | | Outside Malaysia:
U.S: Home-price gains quicken across the country as supplies tighten. Home prices climbed in 91% of U.S. metropolitan areas in the first quarter, with gains accelerating nationwide as buyers competed for a tight supply of listings, the National Association of Realtors said. The national median was USD245,500, which is up 5.7% from the first quarter of 2017. The number of regions with double-digit gains jumped to 30% from 15% in the fourth quarter. (Source: Bloomberg)
U.S: Trump, Xi ease trade tensions with ZTE, Qualcomm reversals. The U.S. and China signalled a desire to avoid a costly trade war after President Donald Trump offered a lifeline to beleaguered telecom equipment maker ZTE Corp. and China's Xi Jinping dispatched his top economic adviser to Washington. Vice Premier Liu He -- who is Xi's top aide for economic matters -- will travel Tuesday to the U.S. for trade talks with Treasury Secretary Steven Mnuchin, the Chinese Ministry of Foreign Affairs said in Beijing. Meanwhile, Chinese regulators have restarted their review of Qualcomm Inc.'s application to acquire NXP Semiconductors NV, according to people familiar with the process. The work had been shelved earlier in reaction to growing U.S. trade tensions. (Source: Bloomberg)
India: Retail inflation in April accelerated more than estimated; raising the possibility the central bank may tighten policy next month. Consumer prices climbed 4.58% YoY in April, the statistics ministry said. Food price index rose 2.8% YoY after previous month's 2.81% YoY rise. Wholesale prices rose 3.18% YoY in April, the commerce ministry said. The continuing surge in prices of crude oil, India's biggest import, could add to the Reserve Bank of India's concerns about keeping inflation in check. The central bank could turn hawkish as elevated fuel prices along with a weaker rupee may widen the trade deficit and squeeze government finances. (Source: Bloomberg)
Saudi Arabia: Tells OPEC it pumped least oil since cuts started. Saudi Arabia told OPEC it pumped the least crude since production cuts began in early 2017 to help reduce a global glut. OPEC's biggest member reported output of 9.868 million barrels a day last month, the lowest since January 2017, according to a monthly report by the organization. The Saudi numbers back up Energy Minister Khalid Al-Falih's comments last month that the kingdom is prepared to keep supply restrained, even though inventories are back to normal. Since President Donald Trump re-imposed sanctions on Iran last week, the most pressing question for traders is whether the kingdom, its Gulf allies and Russia will increase production if Iranian exports are curtailed. Al-Falih will speak with his Russian counterpart, Alexander Novak, in St. Petersburg later this month, and all the producers in the accord will gather in Vienna in late June. The Saudis and the United Arab Emirates, which holds OPEC's presidency this year, have said other members can fill any gap. (Source: Bloomberg) | |
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Damansara Realty: Disposing 70% stake in Healthcare Technical Services S/B. The group is disposing its 70% stake in Healthcare Technical Services S/B (HTS) to Johor Corporation (JCORP), for MYR11.04m.The sales consideration will be satisfied entirely by way of set-off against the intercompany loan owing by Damansara Realty to JCorp. The proposed sale in HTS is expected to be completed in the third quarter of 2018. (Source: The Edge Financial Daily)
Daibochi Plastic and Packaging Industry: Myanmar ops lift 1Q net profit by 12%. The group said its new consumer packaging plant in Yangon, Myanmar, which commenced operation last July, helped lift its latest quarterly net profit by 12.3% to MYR6.48m from MYR5.77m a year ago. Meanwhile, revenue for the quarter under review rose 11.3% to MYR104.74m from MYR94.12m a year ago, on the aforesaid reason.The group declared a first interim single tier dividend of 1.05 sen per share, payable on June 28.(Source: The Edge Financial Daily) | |
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