| | | FEATURED
CALLS | Malaysia | Genting Bhd
Strong start to 2018
Samuel Yin Shao Yang | | | Malaysia | Genting Malaysia
Encouraging start to 2018
Samuel Yin Shao Yang | | | | | |
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| | | | | | | | | | | | | | Share Price: | MYR8.44 | Target Price: | MYR12.35 | Recommendation: | Buy | | |
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| | | Strong start to 2018 | | 1Q18 results outperformed on a high RWS VIP win rate. Even so, Resorts World Sentosa (RWS) and Resorts World Genting's (RWG) operations both grew markedly YoY. Our earnings estimates are tweaked -1% to+2% while our SOP-based TP is trimmed -1% to MYR12.35 on minor housekeeping changes. Trading at a huge 45% discount to our SOP/sh valuations, we prefer GENT as a cheaper proxy to Genting Singapore (GENS SP, BUY, TP: MYR1.46) and Genting Malaysia (GENM MK, BUY, TP: MYR5.70). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 18,365.8 | 20,019.6 | 20,958.0 | 23,047.5 | EBITDA | 6,046.1 | 7,518.8 | 8,226.1 | 9,242.0 | Core net profit | 1,493.4 | 2,117.6 | 2,491.3 | 2,954.5 | Core FDEPS (sen) | 39.9 | 55.2 | 58.7 | 69.1 | Core FDEPS growth(%) | 11.7 | 38.2 | 6.4 | 17.7 | Net DPS (sen) | 12.5 | 21.5 | 17.6 | 20.7 | Core FD P/E (x) | 21.2 | 15.3 | 14.4 | 12.2 | P/BV (x) | 0.9 | 1.0 | 0.9 | 0.9 | Net dividend yield (%) | 1.5 | 2.5 | 2.1 | 2.5 | ROAE (%) | 6.4 | 4.3 | 7.2 | 8.1 | ROAA (%) | 1.7 | 2.3 | 2.6 | 3.1 | EV/EBITDA (x) | 6.6 | 6.8 | 6.0 | 5.2 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR4.93 | Target Price: | MYR5.70 | Recommendation: | Buy | | |
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| | | Encouraging start to 2018 | | 1Q18 results were within the higher end of our expectations. 1Q18 Resorts World Genting (RWG) visitor arrivals, VIP gross gaming revenue (GGR) and mass market GGR all grew markedly YoY. Our earnings estimates, BUY call and MYR5.70 TP are unchanged for now. Zero-rating of the Goods & Services Tax (GST) may boost our earnings estimates by 10% p.a. and our TP by 8% to MYR6.15, yielding total upside potential of 25%. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 8,931.6 | 9,328.7 | 10,165.3 | 11,810.2 | EBITDA | 2,394.9 | 2,319.3 | 2,801.3 | 3,466.4 | Core net profit | 1,547.4 | 1,412.0 | 1,773.4 | 2,273.1 | Core FDEPS (sen) | 27.3 | 24.9 | 31.1 | 39.9 | Core FDEPS growth(%) | 34.0 | (8.9) | 25.3 | 28.2 | Net DPS (sen) | 16.5 | 17.0 | 11.3 | 14.4 | Core FD P/E (x) | 18.1 | 19.8 | 15.8 | 12.4 | P/BV (x) | 1.4 | 1.4 | 1.4 | 1.3 | Net dividend yield (%) | 3.3 | 3.4 | 2.3 | 2.9 | ROAE (%) | 14.8 | 5.9 | 8.9 | 10.7 | ROAA (%) | 5.6 | 4.9 | 5.8 | 7.2 | EV/EBITDA (x) | 8.6 | 12.2 | 9.0 | 6.9 | Net debt/equity (%) | net cash | 4.3 | 8.3 | 1.4 |
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| | | | | | | | | | | | Share Price: | MYR3.23 | Target Price: | MYR3.70 | Recommendation: | Buy | | |
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| | | 1Q18 results above; U/G to BUY | | 1Q18 core net profit of MYR306.2m (+15% YoY, -0.4% QoQ) was above expectation at 24% of our full-year forecast. Yields were relatively flat YoY whilst unit cost declined by 0.4% YoY despite fuel price rising by 24% YoY. We trim FY18-20E earnings by 2.3%/6.6%/6.1%, factoring in the strong 1Q18 and revisions to our jet fuel price and USDMYR assumptions. AirAsia's share price has fallen by 14% in the past month and valuation has turned attractive. We upgrade to BUY with a reduced TP of MYR3.70. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 8,506.3 | 9,709.7 | 10,638.8 | 11,169.9 | EBITDAR | 3,303.5 | 3,651.9 | 3,406.9 | 3,590.2 | Core net profit | 1,434.3 | 1,415.9 | 1,241.5 | 1,242.9 | Core EPS (sen) | 42.9 | 42.4 | 37.1 | 37.2 | Core EPS growth (%) | 571.8 | (1.3) | (12.3) | 0.1 | Net DPS (sen) | 16.0 | 24.0 | 8.0 | 9.0 | Core P/E (x) | 7.5 | 7.6 | 8.7 | 8.7 | P/BV (x) | 1.6 | 1.7 | 1.5 | 1.3 | Net dividend yield (%) | 5.0 | 7.4 | 2.5 | 2.8 | ROAE (%) | 23.2 | 24.5 | 17.2 | 16.0 | ROAA (%) | 6.6 | 6.6 | 5.6 | 5.0 | EV/EBITDAR (x) | 5.0 | 5.1 | 5.7 | 5.8 | Net debt/equity (%) | 133.3 | 116.3 | 120.2 | 123.7 |
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| | | | | | | | | | | | Share Price: | MYR0.75 | Target Price: | MYR0.85 | Recommendation: | Buy | | |
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| | | Sequentially stable | | 9MFY18 results were in line with our expectation, but below consensus. Following the stock's 42% share price YTD decline, YTLP now offers an attractive dividend yield in excess of 6%. Upgrade to BUY with the stock now offering 14% potential upside to our revised (stressed) 85sen TP. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 10,240.5 | 9,778.2 | 9,412.0 | 9,587.9 | EBITDA | 2,777.5 | 2,464.2 | 2,587.2 | 2,694.4 | Core net profit | 872.0 | 676.5 | 539.2 | 593.0 | Core FDEPS (sen) | 11.2 | 8.7 | 6.9 | 7.6 | Core FDEPS growth(%) | (8.5) | (22.8) | (20.3) | 10.0 | Net DPS (sen) | 10.0 | 5.0 | 5.0 | 5.0 | Core FD P/E (x) | 6.7 | 8.6 | 10.8 | 9.9 | P/BV (x) | 0.5 | 0.4 | 0.4 | 0.4 | Net dividend yield (%) | 13.3 | 6.7 | 6.7 | 6.7 | ROAE (%) | 8.8 | 5.2 | 4.1 | 4.4 | ROAA (%) | 2.0 | 1.5 | 1.1 | 1.2 | EV/EBITDA (x) | 9.0 | 11.2 | 8.9 | 8.6 | Net debt/equity (%) | 115.6 | 125.1 | 127.6 | 127.0 |
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| | | | | | | | | | | | Share Price: | MYR7.07 | Target Price: | MYR8.55 | Recommendation: | Buy | | |
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| | | Expect better earnings ahead | | 1Q18 results was slightly weaker QoQ/YoY but within expectations.However, we lowered our FY18-20E EPS by 4-7% given the delays in its plant commencement dates.TP is trimmed to MYR8.55, based on unchanged 24x FY19 PER (mean).U/G to BUY as we think:(i) the weakness in its share price (-19% from peak in Feb 2018) has already reflected the weaker 1Q18 results;(ii) near-term earnings could be better on its new capacity and margin recovery;(iii) FY19 PER of 20x is relatively undemanding(vs. its peers) | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,668.0 | 1,957.6 | 2,264.9 | 2,608.1 | EBITDA | 285.3 | 309.2 | 340.0 | 394.1 | Core net profit | 167.1 | 182.1 | 195.4 | 227.8 | Core EPS (sen) | 26.1 | 28.5 | 30.5 | 35.6 | Core EPS growth (%) | (17.8) | 9.0 | 7.3 | 16.6 | Net DPS (sen) | 11.0 | 11.0 | 12.2 | 14.3 | Core P/E (x) | 27.1 | 24.8 | 23.1 | 19.8 | P/BV (x) | 4.2 | 3.9 | 3.6 | 3.2 | Net dividend yield (%) | 1.6 | 1.6 | 1.7 | 2.0 | ROAE (%) | 16.2 | 16.3 | 16.1 | 17.0 | ROAA (%) | 11.2 | 10.8 | 10.1 | 10.6 | EV/EBITDA (x) | 15.1 | 17.4 | 14.1 | 12.2 | Net debt/equity (%) | 4.8 | 15.7 | 18.7 | 19.1 |
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| | | | | | | | | | | | Share Price: | MYR2.30 | Target Price: | MYR2.50 | Recommendation: | Buy | | |
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| | | A decent start into FY18 | | 1Q18 results were within estimates whereby earnings were driven by better performances at the retailing and property management services segments. We maintain our earnings forecasts but raise our TP to MYR2.50 (+20sen) after rolling forward our valuation base to FY19, pegged to an unchanged 28x PER at +0.5SD of mean. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 4,018.7 | 4,088.2 | 4,389.2 | 4,536.6 | EBITDA | 461.4 | 531.8 | 556.0 | 582.7 | Core net profit | 90.3 | 106.0 | 115.7 | 124.2 | Core EPS (sen) | 6.4 | 7.6 | 8.2 | 8.8 | Core EPS growth (%) | (32.3) | 17.4 | 9.1 | 7.4 | Net DPS (sen) | 3.0 | 3.5 | 4.1 | 4.4 | Core P/E (x) | 35.7 | 30.5 | 27.9 | 26.0 | P/BV (x) | 1.7 | 1.6 | 1.6 | 1.6 | Net dividend yield (%) | 1.3 | 1.5 | 1.8 | 1.9 | ROAE (%) | 4.9 | 5.5 | 5.8 | 6.1 | ROAA (%) | 2.1 | 2.4 | 2.6 | 2.7 | EV/EBITDA (x) | 9.8 | 6.3 | 7.2 | 6.9 | Net debt/equity (%) | 47.0 | 43.8 | 38.2 | 36.4 |
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| | | | | | | | | | | | Share Price: | MYR0.28 | Target Price: | MYR0.33 | Recommendation: | Buy | | |
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| | | Tactical U/G to BUY | | 1Q18 results are in line and we expect improving prospects ahead, on rising JUs utilisation, a short-term key catalyst. Risk-reward has improved following the recent 10% drop in share price. UMWOG's financials are sound and valuations have turned more attractive. Our unchanged MYR0.33 TP (1x EV/ replacement value) offers an 18% upside. Upgrade to BUY. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 321.1 | 586.5 | 675.5 | 698.0 | EBITDA | 79.0 | 234.3 | 301.8 | 316.8 | Core net profit | (309.7) | (140.3) | 12.3 | 21.9 | Core EPS (sen) | (14.3) | (1.7) | 0.2 | 0.3 | Core EPS growth (%) | nm | nm | nm | 77.8 | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | nm | 186.4 | 104.8 | P/BV (x) | 0.3 | 0.9 | 0.8 | 0.8 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | (42.1) | (45.7) | 0.5 | 0.8 | ROAA (%) | (4.4) | (2.5) | 0.3 | 0.5 | EV/EBITDA (x) | 64.2 | 15.7 | 10.0 | 8.8 | Net debt/equity (%) | 142.3 | 43.6 | 26.1 | 17.5 |
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| | | | | | | | | | | | Share Price: | MYR1.13 | Target Price: | MYR1.50 | Recommendation: | Buy | | |
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| | | 3QFY18 surprised on the upside | | 3QFY6/18 results were above estimates whereby earnings growth was mainly driven by the outperformance of the Australian hotels and new asset contribution. YTLREIT also declared a third gross DPU of 1.94sen (YTD: 5.9sen). We raise our FY18-20 earnings forecasts by 7-14% and DDM-TP by 10sen to MYR1.50 (cost of equity: 8.6%). | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 426.3 | 449.7 | 505.9 | 531.5 | Net property income | 198.9 | 209.6 | 250.1 | 252.4 | Distributable income | 104.5 | 122.7 | 132.4 | 139.9 | DPU (sen) | 7.1 | 6.5 | 7.0 | 7.4 | DPU growth (%) | (1.0) | (8.8) | 7.9 | 5.6 | Price/DPU(x) | 15.9 | 17.4 | 16.2 | 15.3 | P/BV (x) | 0.8 | 0.8 | 0.8 | 0.8 | DPU yield (%) | 6.3 | 5.7 | 6.2 | 6.5 | ROAE (%) | (0.3) | (0.5) | 2.6 | 2.3 | ROAA (%) | 2.9 | 3.1 | 3.6 | 3.6 | Debt/Assets (x) | 0.4 | 0.3 | 0.4 | 0.4 |
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| | | | | | | | | | | | Share Price: | MYR0.36 | Target Price: | MYR0.50 | Recommendation: | Buy | | |
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| | | Take a closer look; U/G to BUY | | 1Q18's net loss of MYR22m has significantly narrowed QoQ and YoY. Near-term adex outlook is turning positive given several adex-friendly events lined up in FY18. With the 53% fall in share price YTD, we believe the heavy sell down was overdone given the value in MPR's media rights and land assets. We continue to value MPR on 1.0x FY18E P/B ex-goodwill, but derive a lower TP of MYR0.50 (vs. MYR0.54) after updating for FY17 annual report. The stock is now a BUY. Earnings estimates maintained. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,289.0 | 1,195.7 | 1,251.7 | 1,311.8 | EBITDA | 163.6 | 19.4 | 90.7 | 116.2 | Core net profit | 38.7 | (153.2) | (15.6) | 10.2 | Core EPS (sen) | 3.5 | (13.8) | (1.4) | 0.9 | Core EPS growth (%) | (72.1) | nm | nm | nm | Net DPS (sen) | 8.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | 10.3 | nm | nm | 39.0 | P/BV (x) | 0.3 | 0.5 | 0.5 | 0.5 | Net dividend yield (%) | 22.2 | 0.0 | 0.0 | 0.0 | ROAE (%) | (3.8) | (58.4) | (2.1) | 1.4 | ROAA (%) | 1.7 | (8.2) | (1.0) | 0.7 | EV/EBITDA (x) | 7.5 | 49.2 | 6.4 | 4.8 | Net debt/equity (%) | net cash | 14.0 | 24.6 | 22.8 |
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| | | | | | | | | | | | Share Price: | MYR0.88 | Target Price: | MYR1.25 | Recommendation: | Buy | | |
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| | | Surprise on the downside | | Disappointing QoQ revenue growth in 3QFY18 coupled with sharp margin contraction led to a 29% QoQ fall in earnings. Expecting slower revenue and weaker operating margins due to production yield inefficiency and higher labour cost, we cut FY18-20E earnings by 22%-29%. Correspondingly, our TP is lowered to MYR1.25. Despite a poor set of results, we believe that the share price may have over corrected. Current valuations are attractive at 4.5x CY19 ex-cash PER. Maintain BUY. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 126.3 | 122.2 | 112.5 | 119.2 | EBITDA | 22.6 | 21.0 | 16.1 | 22.3 | Core net profit | 16.5 | 14.8 | 11.1 | 15.3 | Core EPS (sen) | 8.8 | 7.9 | 6.0 | 8.3 | Core EPS growth (%) | (8.0) | (10.5) | (23.0) | 37.8 | Net DPS (sen) | 4.0 | 5.0 | 6.0 | 6.0 | Core P/E (x) | 10.0 | 11.2 | 14.6 | 10.6 | P/BV (x) | 1.1 | 1.0 | 1.0 | 1.0 | Net dividend yield (%) | 4.5 | 5.7 | 6.8 | 6.8 | ROAE (%) | 12.7 | 9.2 | 6.8 | 9.2 | ROAA (%) | 11.3 | 8.0 | 6.0 | 8.2 | EV/EBITDA (x) | 9.4 | 10.0 | 4.4 | 3.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.16 | Target Price: | MYR0.22 | Recommendation: | Buy | | |
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| | | Tactical U/G to BUY | | The OSV sector has bottomed. Cost management is yielding positive results and OSV utilisation is set to rise. Clinching positive wins from PETRONAS' ILCT tender, the results to be known soon, is a catalyst. Valuations are attractive now following the 30% fall in share price post recommencement of our coverage in Feb 2018. Our TP is based on 0.5x BV, on par with peer ratings. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 226.9 | 204.6 | 237.9 | 252.1 | EBITDA | 88.3 | 83.0 | 96.8 | 111.0 | Core net profit | 0.7 | (22.9) | (2.6) | 11.7 | Core EPS (sen) | 0.1 | (1.9) | (0.2) | 1.0 | Core EPS growth (%) | (96.1) | nm | nm | nm | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | 253.7 | nm | nm | 15.6 | P/BV (x) | 0.3 | 0.4 | 0.4 | 0.3 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | (22.7) | (9.9) | (0.5) | 2.2 | ROAA (%) | 0.0 | (1.7) | (0.2) | 0.9 | EV/EBITDA (x) | 12.3 | 10.9 | 7.1 | 5.7 | Net debt/equity (%) | 114.2 | 122.6 | 98.2 | 86.2 |
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| | | | | | | | | | | | Share Price: | MYR0.13 | Target Price: | MYR0.30 | Recommendation: | Buy | | |
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| | | Tactical U/G to BUY | | Results aside, we upgrade Alam to a BUY on improving risk-reward opportunities, premised on these 3 catalysts: (i) its debt restructuring is underway and will likely be approved; (ii) it should secure positive outcome from PETRONAS' ILCT tenders; and (iii) valuations have turned attractive following a 31% YTD fall in share price. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 229.5 | 159.8 | 197.6 | 211.3 | EBITDA | 19.8 | (34.5) | 24.0 | 28.6 | Core net profit | (89.8) | (99.6) | (25.3) | (18.6) | Core EPS (sen) | (9.7) | (10.8) | (2.7) | (2.0) | Core EPS growth (%) | nm | nm | nm | nm | Net DPS (sen) | 0.0 | 0.0 | 0.0 | 0.0 | Core P/E (x) | nm | nm | nm | nm | P/BV (x) | 0.2 | 0.2 | 0.2 | 0.2 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | ROAE (%) | (17.0) | (22.0) | (4.3) | (3.3) | ROAA (%) | (8.4) | (10.9) | (3.0) | (2.2) | EV/EBITDA (x) | 17.6 | nm | 8.9 | 7.3 | Net debt/equity (%) | 14.9 | 16.2 | 17.9 | 17.4 |
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| | | | | | | | | | | | Share Price: | MYR1.44 | Target Price: | MYR1.57 | Recommendation: | Hold | | |
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| | | Earnings on track | | SDPR's 9MFY6/18 results came in as per our expectation but above consensus. 9MFY18 net profit of MYR593m jumped strongly by +108% YoY on asset/land sales. SDPR's 9MFY18 sales were however slight below expectations. We maintain our earnings forecasts and MYR1.57 RNAV-TP (on 0.55x P/RNAV) pending an analyst briefing today. 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 | 841.5 | 701.1 | Core EPS (sen) | 11.0 | 8.9 | 12.4 | 10.3 | Core EPS growth (%) | 33.6 | (18.8) | 38.4 | (16.7) | Net DPS (sen) | 0.0 | 0.0 | 4.9 | 4.1 | Core P/E (x) | 13.1 | 16.1 | 11.6 | 14.0 | P/BV (x) | 1.8 | 1.5 | 1.0 | 1.0 | Net dividend yield (%) | 0.0 | 0.0 | 3.4 | 2.9 | ROAE (%) | 18.2 | 10.7 | 10.5 | 7.1 | ROAA (%) | 6.2 | 4.5 | 5.9 | 4.6 | EV/EBITDA (x) | na | na | 10.9 | 13.0 | Net debt/equity (%) | 22.4 | 1.4 | 10.0 | 17.8 |
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| | | | | | | | | | | | Share Price: | MYR1.53 | Target Price: | MYR1.24 | Recommendation: | Sell | | |
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| | | 1Q18:Below expectations | | 1Q18 results fell short. We have lowered our earnings forecasts by 15%/ 14%/14% for FY18/19/20 assuming lower sales and higher operating costs. We believe that focus on cost efficiencies remains key in the near term and we await the delivery of results. Of note is that its 18-month 'Back to Basics' exercise, unveiled end-July 2017, is on-going. Post downward earnings revisions, new TP for SEM is MYR1.24 (on unchanged 27x CY19 PER; about peer average). We now rate SEM a SELL (from HOLD). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,103.4 | 2,187.1 | 2,289.1 | 2,459.8 | EBITDA | 126.6 | 140.0 | 140.3 | 155.3 | Core net profit | 54.0 | 51.0 | 47.6 | 56.4 | Core EPS (sen) | 4.4 | 4.2 | 3.9 | 4.6 | Core EPS growth (%) | (3.2) | (5.6) | (6.7) | 18.5 | Net DPS (sen) | 4.7 | 2.0 | 1.9 | 2.3 | Core P/E (x) | 34.7 | 36.8 | 39.4 | 33.2 | P/BV (x) | 53.3 | 25.3 | 19.2 | 14.9 | Net dividend yield (%) | 3.1 | 1.3 | 1.3 | 1.5 | ROAE (%) | 52.6 | 93.4 | 55.4 | 50.4 | ROAA (%) | 7.1 | 6.5 | 5.8 | 6.4 | EV/EBITDA (x) | 14.0 | 14.1 | 14.1 | 12.6 | Net debt/equity (%) | 188.2 | 157.2 | 102.6 | 62.4 |
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| | | | | | | | | | Ta Ann (TAH MK)
by Chee Ting Ong |
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| | | | | Share Price: | MYR2.74 | Target Price: | MYR3.20 | Recommendation: | Hold | | |
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| | | Double whammy from plantation and timber | | 1Q18 results fell short with sharply lower plantation earnings while timber division suffered losses. We cut our FY18-20F EPS forecasts by -13% for each year. Post EPS revisions, we cut Ta Ann's TP to MYR3.20 (from MYR3.70) on an unchanged 13x FY18 PER, its 5-year historical mean. Despite upside to our new TP, Ta Ann remains a HOLD given the present weak CPO price and still uncertain timber outlook. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,147.8 | 1,170.8 | 1,149.7 | 1,195.8 | EBITDA | 268.6 | 306.4 | 299.8 | 336.6 | Core net profit | 125.6 | 119.5 | 109.5 | 131.6 | Core EPS (sen) | 28.2 | 26.9 | 24.6 | 29.6 | Core EPS growth (%) | (25.4) | (4.8) | (8.4) | 20.2 | Net DPS (sen) | 10.0 | 10.0 | 9.8 | 11.8 | Core P/E (x) | 9.7 | 10.2 | 11.1 | 9.3 | P/BV (x) | 1.0 | 0.9 | 0.8 | 0.8 | Net dividend yield (%) | 3.6 | 3.6 | 3.6 | 4.3 | ROAE (%) | 10.2 | 9.0 | 7.7 | 8.7 | ROAA (%) | 6.2 | 5.4 | 4.5 | 5.2 | EV/EBITDA (x) | 7.0 | 6.5 | 5.2 | 4.3 | Net debt/equity (%) | 5.4 | 18.7 | 16.3 | 5.8 |
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| | | | | | | | | | | | Share Price: | MYR1.36 | Target Price: | MYR1.40 | Recommendation: | Hold | | |
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| | | 1Q18: Below expectations | | 1Q18 results were below ours and consensus expectations on the back of slower construction progress. We lower our FY18E-20E earnings by 12%-16% after adjusting for slower works recognition and lower construction EBIT margins. We derive a new lower TP of MYR1.40 (-13%; rounded) pegged to unchanged 12x FY18 PER (-1 SD). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 498.5 | 505.9 | 625.1 | 842.3 | EBITDA | 83.0 | 73.3 | 95.8 | 124.6 | Core net profit | 56.5 | 46.6 | 62.5 | 83.2 | Core EPS (sen) | 10.3 | 8.5 | 11.4 | 15.1 | Core EPS growth (%) | (25.9) | (17.4) | 34.0 | 33.2 | Net DPS (sen) | 2.4 | 2.4 | 2.4 | 2.4 | Core P/E (x) | 13.2 | 16.0 | 12.0 | 9.0 | P/BV (x) | 1.1 | 1.0 | 1.0 | 0.9 | Net dividend yield (%) | 1.8 | 1.8 | 1.8 | 1.8 | ROAE (%) | 8.3 | 6.5 | 8.2 | 10.2 | ROAA (%) | 6.7 | 5.0 | 6.2 | 7.5 | EV/EBITDA (x) | 9.6 | 9.9 | 6.7 | 5.0 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR0.85 | Target Price: | MYR0.90 | Recommendation: | Hold | | |
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| | | 1Q18 missed estimates | | 1Q18 results fell short of our expectations as earnings were mainly impacted by negative rental reversions and higher opex at KOMTAR JBCC despite occupancy rate improvement. We lower our EPU forecasts by 7-9% and DDM-TP by 10sen to MYR0.90 (unchanged 8.6% cost of equity). | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 76.1 | 80.0 | 83.1 | 90.4 | Net property income | 56.9 | 56.9 | 58.9 | 64.9 | Distributable income | 36.0 | 35.5 | 34.1 | 38.7 | DPU (sen) | 5.4 | 5.4 | 4.9 | 5.1 | DPU growth (%) | 400.0 | 0.0 | (9.7) | 4.3 | Price/DPU(x) | 15.7 | 15.7 | 17.4 | 16.7 | P/BV (x) | 0.8 | 0.8 | 0.7 | 0.7 | DPU yield (%) | 6.4 | 6.4 | 5.7 | 6.0 | ROAE (%) | 7.8 | 5.8 | 4.8 | 4.9 | ROAA (%) | 3.7 | 3.6 | 3.1 | 3.1 | Debt/Assets (x) | 0.4 | 0.4 | 0.3 | 0.4 |
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| | | | | | | | | | | | Share Price: | MYR5.32 | Target Price: | MYR4.00 | Recommendation: | Sell | | |
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| | | No surprises | | 4QFY3/18 results were in line. While marine division's earnings remained soft on extended lower fish cycle (post El-Nino), we understand that it has begun to see better fish catch into 1QFY19. Meanwhile, livestock should continue its earnings momentum on better overall ASPs and better contribution from its overseas units (eg. Indonesia). Our earnings forecasts are tweaked, DCF-TP unchanged at MYR4.00. | | |
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| | FYE Mar (MYR m) | FY17A | FY18A | FY19E | FY20E | Revenue | 3,012.0 | 3,263.8 | 3,500.2 | 3,797.7 | EBITDA | 394.6 | 404.7 | 455.9 | 487.7 | Core net profit | 185.9 | 206.2 | 233.8 | 254.3 | Core EPS (sen) | 11.5 | 12.7 | 14.4 | 15.7 | Core EPS growth (%) | (3.2) | 10.9 | 13.4 | 8.8 | Net DPS (sen) | 7.3 | 5.2 | 5.6 | 6.0 | Core P/E (x) | 46.4 | 41.9 | 36.9 | 33.9 | P/BV (x) | 4.9 | 4.8 | 4.4 | 4.1 | Net dividend yield (%) | 1.4 | 1.0 | 1.1 | 1.1 | ROAE (%) | 11.7 | 11.6 | 12.4 | 12.5 | ROAA (%) | 6.2 | 6.3 | 7.0 | 7.3 | EV/EBITDA (x) | 16.4 | 22.5 | 21.0 | 19.7 | Net debt/equity (%) | 33.5 | 36.5 | 38.1 | 37.2 |
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| | MACRO RESEARCH | | | | | | 17 new additions, 7 deletions
by Desmond Ch'ng |
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| | | | | | The Securities Commission's (SC) revised Shariah compliant securities/ stocks list, released last evening, will take effect from today, 25 May. It includes 17 additions, 7 deletions, as opposed to 33 additions, 22 deletions in the Nov 2017 review. The number of Shariah compliant stocks now stands at 693 (77% of the total of 901 listed stocks, including REITS, on Bursa Securities). This contrasts against 686 compliant stocks in the Nov 2017 Shariah list. | |
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| | | | | | KLFIN Index: Correction has Begun
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell for a fourth day, losing 28.59pts to 1,777.66, as foreign selling persisted. Banking stocks took a beating with decliners led by MAYBANK, MISC and GENM. Broader market remained bearish with losers outpacing gainers by 752 to 235. A total of 2.86b shares worth MYR3.86b changed hands. Expect another day of volatile trading on geopolitical worries. O&G stocks may also come under pressure after Russia signaled that it may phase out the supply curbs which weighed on oil price. | |
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| NEWS | | | Outside Malaysia:
U.S: Filings for unemployment benefits unexpectedly rose to a seven-week high while remaining consistent with a tight job market, Labor Department figures showed. Jobless claims increased by 11k to 234k (est. 220k). Continuing claims rose by 29k to 1.741m in week ended May 12 (data reported with one-week lag). Four-week average of initial claims, a less- volatile measure than the weekly figure, rose to 219,750 from the prior week's 213,500. Unemployment-benefits applications below 300,000 are generally considered consistent with a healthy labor market, and the latest tally still isn't far from the 48-year low of 209,000 reached in April. (Source: Bloomberg)
U.S: Household sentiment improved for the first time in five weeks on more upbeat views about personal finances and the economy, the Bloomberg Consumer Comfort Index showed. Weekly index rose to 55.2 from 54.6. Gauge of personal finances increased to a four-week high of 63.5 from 62.1. Index tracking current views of the economy increased to 56.5 from 55.8, marking just the second advance since mid-March. Measure of buying climate little changed at 45.7 after 45.8. Americans' views of their finances strengthened, supported by stock markets that have recouped some losses in recent weeks, along with tax cuts that are putting more money in people's pockets. The index tracking views on the broader economy also improved, helped by modest wage growth and the lowest unemployment rate in more than 17 years. (Source: Bloomberg)
U.S: National home values have increased 8.7% since last April to a median value of USD215,600, according to Zillow. Newly released data from the Federal Housing Finance Agency confirm the widespread gains seen by Zillow as home prices rose in all 50 states and the District of Columbia in the first quarter of 2018 compared to a year earlier. The FHFA report shows first-quarter home prices rose 6.9% from a year earlier. The rise in home prices has allowed more people to take cash-out of the homes when they refinance. Refinancing, where the home owner took additional cash out, rose to 61% in the first quarter -- the highest rate seen since the third quarter of 2008, according to FHFA data. (Source: Bloomberg)
Japan: Core inflation in Tokyo unexpectedly slowed for a third consecutive month in May, an unwelcome development for the Bank of Japan as it struggles to hit its 2% target. Core consumer prices in Tokyo, which exclude fresh food, rose 0.5% in May (estimate 0.6%). Tokyo's consumer prices excluding fresh food and energy climbed 0.2% (estimate 0.3%). Overall prices gained 0.4% (estimate 0.5%). Tokyo's inflation results, because they are released about a month before the nationwide figures for the same period, are seen as leading indicators. (Source: Bloomberg) | |
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Gunung Capital: Cautious on National Service contract. The group which saw a more than 18-fold increase in net profit for the first quarter ended March 31, is cautious of extension to its National Service Programme contract given the new government's target of reducing operational expenditure.The company made a MYR2.66m net profit for the quarter under review, compared with MYR0.146m in the same quarter a year ago. The service contract has contributed to revenue for the past seven years including the quarter under review. The group is expecting to see cost pressure although it expects service-contract revenues to continue to provide a positive cashflow for the group in the current financial year. (Source: The Sun Daily)
Sunsuria: 2Q profit jumps on continued contribution from ongoing project. The group announced a 69% YoY surge in net profit to MYR30.39m in its second quarter ended March 31, 2018 (2QFY18) from MYR18.01m a year ago, as the property developer's revenue grew 34% YoY to MYR139.07m from MYR103.68m, on continued contribution from ongoing projects. The better quarterly earnings pushed Sunsuria's net profit in the first six months of the year (1HFY18) to MYR51.23m, up 79% YoY from MYR28.64m; cumulative revenue was up 49% to MYR249.9m from MYR167.48m. (Source: The Edge Financial Daily)
Axiata: edotco expands business model to include power services in Myanmar. edotco Myanmar, part of Axiata Group Bhd's subsidiary edotco Group S/B, is taking over the energy assets and management of Ooredoo Myanmar Ltd on 1,250 telecommunications tower sites in Myanmar. edotco currently owns and operates more than 1,500 tower sites across Myanmar, with Ooredoo Myanmar as its anchor tenant. edotco Myanmar has signed an agreement with Ooredoo Myanmar that will enable edotco to provide and manage energy for all tenants on these sites. (Source: The Edge Financial Daily) | |
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