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| | | | | | | | | | | | | | Share Price: | SGD0.75 | Target Price: | SGD0.86 | Recommendation: | Buy | | |
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| | | Appetite should improve | | 2Q18 profit recovery was stronger than expected, propelled by topline growth in PT Japfa TBK, APO and Dairy divisions combined with margin improvement from cost and yield efficiencies. Only Consumer Food continued to struggle in a very competitive Indonesia market. 2Q18 reported PATMI of USD29.6m turned around from the loss in the prior year and was up 77% QoQ with 1H18 accounting for c52% of our full year forecast. Maintain BUY with SOTP-based PT of SGD0.86 (unchanged). | | |
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| | FYE Dec (USD m) | FY16A | FY17A | FY18E | FY19E | Revenue | 3,032.9 | 3,189.9 | 3,390.8 | 3,561.4 | EBITDA | 394.5 | 284.5 | 383.2 | 419.4 | Core net profit | 130.2 | 15.7 | 89.1 | 105.2 | Core EPS (cts) | 7.4 | 0.9 | 4.8 | 5.7 | Core EPS growth (%) | 47.4 | (88.0) | 443.6 | 18.2 | Net DPS (cts) | 1.0 | 0.7 | 0.7 | 0.7 | Core P/E (x) | 7.2 | 54.2 | 11.3 | 9.6 | P/BV (x) | 1.2 | 1.2 | 1.8 | 1.6 | Net dividend yield (%) | 1.9 | 1.5 | 1.3 | 1.3 | ROAE (%) | 16.2 | 3.0 | 14.4 | 17.8 | ROAA (%) | 5.5 | 0.6 | 3.1 | 3.6 | EV/EBITDA (x) | 4.8 | 6.0 | 6.2 | 5.6 | Net debt/equity (%) | 46.3 | 69.4 | 107.9 | 84.1 |
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| | | | | | | | | | | | Share Price: | SGD0.79 | Target Price: | SGD0.95 | Recommendation: | Buy | | |
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| | | Better Equilibrium | | 2Q18 DPU of SGD1.42cts is in line at 46% of our FY18E. DPU fell 17.6% YoY from a 13.7% increase in units and lower NPI following the conversion of CWT Commodity Hub into multi-tenancies and divestment of its Hi-Speed Logistics Centre. These were partly offset by nine new Australian assets, which lifted Australian revenue contributions from 20% to 23%. Cache has delivered on boosting its Commodity Hub committed occupancy, and we see stronger growth as rents stabilise and leasing demand picks up. | | |
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| | FYE Dec (SGD m) | FY16A | FY17A | FY18E | FY19E | Revenue | 111.3 | 112.0 | 126.4 | 132.7 | Net property income | 88.0 | 87.3 | 98.5 | 103.5 | Distributable income | 69.3 | 66.0 | 67.7 | 70.1 | DPU (cts) | 7.4 | 6.6 | 6.3 | 6.5 | DPU growth (%) | (13.2) | (10.9) | (4.1) | 2.9 | Price/DPU(x) | 11.2 | 12.7 | 12.3 | 11.9 | P/BV (x) | 1.1 | 1.2 | 0.8 | 0.8 | DPU yield (%) | 8.9 | 7.9 | 8.1 | 8.4 | ROAE (%) | (3.2) | 3.3 | 8.3 | 7.4 | ROAA (%) | 5.2 | 5.2 | 5.4 | 4.9 | Debt/Assets (x) | 0.4 | 0.4 | 0.3 | 0.3 |
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| | | | | | | | | | | | Share Price: | IDR6,575 | Target Price: | IDR6200.00 | Recommendation: | Hold | | |
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| | | Short-term challenges remain | | BDMN's acquisition by MUFG Bank is progressing as scheduled. But as the cash-out option for minority shareholders might not occur until 2020, we are refocusing on the 12-month outlook for BDMN. Based on our estimates, rising NPLs among SME loans are likely to put pressure on earnings. We trim our GGM-based TP 5% to IDR6,200 (1.3x 2019F PBV from 1.4x previously) and reiterate HOLD. | | |
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| | FYE Dec (IDR b) | FY16A | FY17A | FY18E | FY19E | Operating income | 18,764.6 | 18,815.0 | 19,962.9 | 20,989.2 | Pre-provision profit | 9,381.7 | 9,092.0 | 9,740.8 | 10,247.4 | Core net profit | 2,669.5 | 3,681.6 | 4,176.1 | 4,405.4 | Core EPS (IDR) | 279 | 384 | 436 | 460 | Core EPS growth (%) | 11.5 | 37.9 | 13.4 | 5.5 | Net DPS (IDR) | 88 | 121 | 137 | 145 | Core P/E (x) | 12.9 | 13.2 | 15.1 | 14.3 | P/BV (x) | 1.0 | 1.3 | 1.5 | 1.4 | Net dividend yield (%) | 2.4 | 2.4 | 2.1 | 2.2 | Book value (IDR) | 3,750 | 4,033 | 4,317 | 4,615 | ROAE (%) | 7.6 | 9.9 | 10.4 | 10.3 | ROAA (%) | 1.5 | 2.1 | 2.3 | 2.3 |
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| | | | | | | | | | | | Share Price: | INR947 | Target Price: | INR1160.00 | Recommendation: | Buy | | |
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| | | Large contract wins back | | 1Q19 EPS forms 24% of our FY19E. Although its base business was squeezed by clients' budget rationalisation, strong new contracts provide confidence that its slight 1Q19 revenue weakness could be short-lived. We raise FY19-20 EPS by 4-5% after factoring in INR depreciation, share buybacks but lower revenue. Given the latter, we now set our TP at 14x FY20E EPS, its 5-year average, rather than a slight premium of 15x. This doesn't change our TP of INR1,160. Maintain BUY. | | |
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| | FYE Mar (INR m) | FY17A | FY18A | FY19E | FY20E | Revenue | 467,220.0 | 505,700.0 | 581,876.9 | 643,933.4 | EBITDA | 103,090.0 | 114,400.0 | 136,973.9 | 152,815.8 | Core net profit | 81,540.0 | 87,820.0 | 98,712.8 | 109,495.2 | Core EPS (INR) | 57 | 63 | 73 | 83 | Core EPS growth (%) | 45.8 | 10.4 | 15.4 | 14.1 | Net DPS (INR) | 24 | 12 | 14 | 16 | Core P/E (x) | 13.9 | 14.0 | 13.3 | 11.6 | P/BV (x) | 3.4 | 3.3 | 3.2 | 2.9 | Net dividend yield (%) | 3.0 | 1.4 | 1.5 | 1.7 | ROAE (%) | 26.6 | 25.0 | 25.6 | 25.9 | ROAA (%) | 19.0 | 18.6 | 19.4 | 19.6 | EV/EBITDA (x) | 10.9 | 10.9 | 8.8 | 7.6 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | PVR (PVRL IN)
by Jigar Shah |
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| | | | | Share Price: | INR1,127 | Target Price: | INR1450.00 | Recommendation: | Buy | | |
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| | | 1Q beat due to F&B | | 1Q EBITDA was +20% YoY and 18% above our forecast due to a +23% YoY in F&B sales. We maintain our FY19-21 forecasts as the footfalls/screen were flat. Our TP of INR1,450 is unchanged, based on 13x FY20E EV/EBITDA; 25% below its 5-year avg. of 17x. PVRL corrected 18% in the last month & it's trading at an attractive 10x FY20E EV/EBITDA on concerns the government will regulate F&B prices in cinemas. Catalyst are better content leading to higher footfall and dismissal of potential F&B regulations. | | |
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| | FYE Mar (INR m) | FY17A | FY18A | FY19E | FY20E | Revenue | 21,194.3 | 23,341.1 | 27,198.9 | 31,570.9 | EBITDA | 3,136.2 | 4,018.3 | 4,888.0 | 5,912.6 | Core net profit | 1,039.3 | 1,259.6 | 1,691.2 | 2,115.9 | Core EPS (INR) | 22 | 27 | 36 | 45 | Core EPS growth (%) | (14.4) | 21.2 | 34.3 | 25.1 | Net DPS (INR) | 2 | 2 | 3 | 3 | Core P/E (x) | 50.1 | 51.7 | 30.5 | 24.4 | P/BV (x) | 5.4 | 6.1 | 4.2 | 3.6 | Net dividend yield (%) | 0.2 | 0.1 | 0.2 | 0.2 | ROAE (%) | 10.8 | 12.2 | 14.7 | 15.9 | ROAA (%) | 5.2 | 5.6 | 6.9 | 7.9 | EV/EBITDA (x) | 24.0 | 15.9 | 12.0 | 9.9 | Net debt/equity (%) | 78.4 | 65.7 | 58.7 | 50.5 |
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| | | | | | | | | | | | Share Price: | MYR2.50 | Target Price: | MYR2.40 | Recommendation: | Hold | | |
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| | | Above expectations | | Despite 1H18 core earnings at 40% of our full-year forecast, the results are still above expectation. We expect a much stronger 2H18, fuelled by demand ramp at the sensor division in preparation for major smartphone launches in 3Q18. We raise our FY18-20 earnings forecasts by 2%-9%, on higher sensor volumes. Correspondingly, our TP is raised by 4% to MYR2.40, pegged on unchanged 18x CY19 EPS (average PER targets for tech stocks within our coverage). Maintain HOLD. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 215.3 | 304.6 | 371.5 | 439.4 | EBITDA | 51.2 | 82.8 | 110.8 | 138.2 | Core net profit | 25.7 | 50.0 | 67.5 | 89.2 | Core EPS (sen) | 3.9 | 7.5 | 10.1 | 13.3 | Core EPS growth (%) | (64.2) | 92.8 | 35.1 | 32.1 | Net DPS (sen) | 6.9 | 7.3 | 7.1 | 9.3 | Core P/E (x) | 45.0 | 32.3 | 24.8 | 18.7 | P/BV (x) | 4.4 | 5.7 | 5.5 | 5.1 | Net dividend yield (%) | 3.9 | 3.0 | 2.8 | 3.7 | ROAE (%) | 9.1 | 18.8 | 23.2 | 28.3 | ROAA (%) | 7.7 | 14.1 | 16.5 | 20.4 | EV/EBITDA (x) | 16.1 | 22.1 | 14.5 | 11.6 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR5.29 | Target Price: | MYR6.55 | Recommendation: | Buy | | |
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| | | Challenging quarter due to lower utilisation rate | | 2Q18 core net profit of MYR249m (+65.8% YoY, +3.1% QoQ) was below our expectation (20% of our full-year forecast) but in-line with consensus (at 23%). Factory utilisation rate came in at 82%, lower than our forecast of 90%. The volatile naphtha price is also inhibiting LCT's ability to operate seamlessly. We cut FY18-19 core earnings forecasts by -11.4% to factor in lower utilisation rate in FY18-19. Our new TP is MYR6.55 (-55 sen) based on an unchanged 6.5x 2018 EV/EBITDA. Maintain BUY. | | |
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| | FYE Dec (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 8,136.6 | 7,824.3 | 10,041.2 | 11,148.3 | EBITDA | 2,193.0 | 1,568.7 | 1,889.0 | 2,212.8 | Core net profit | 1,396.5 | 1,091.9 | 1,155.9 | 1,345.8 | Core EPS (sen) | 80.8 | 55.0 | 50.9 | 59.2 | Core EPS growth (%) | 123.1 | (32.0) | (7.5) | 16.4 | Net DPS (sen) | 6.9 | 23.0 | 16.8 | 19.5 | Core P/E (x) | na | 9.5 | 10.4 | 8.9 | P/BV (x) | na | 0.9 | 1.0 | 0.9 | Net dividend yield (%) | na | 4.4 | 3.2 | 3.7 | ROAE (%) | 18.6 | 10.9 | 9.8 | 10.8 | ROAA (%) | 16.7 | 9.7 | 8.6 | 9.3 | EV/EBITDA (x) | na | 3.7 | 5.1 | 4.8 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | Share Price: | MYR1.19 | Target Price: | MYR1.50 | Recommendation: | Buy | | |
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| | | 4QFY18 earnings in-line | | 4QFY6/18 results and final gross DPU of 1.97sen (FY18: 7.87sen) were within our estimates as bottomline growth was largely attributed to new asset contribution and better earnings at the Australian hotels. We adjust our FY19-20 earnings forecasts by +1 to +3% but maintain our MYR1.50 TP due to marginal changes in our DDM-valuation (cost of equity: 8.6%). | | |
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| | FYE Jun (MYR m) | FY17A | FY18A | FY19E | FY20E | Revenue | 449.7 | 501.0 | 531.5 | 549.4 | Net property income | 209.6 | 248.8 | 266.4 | 272.5 | Distributable income | 122.7 | 134.1 | 145.1 | 150.8 | DPU (sen) | 6.5 | 7.1 | 7.7 | 8.0 | DPU growth (%) | (8.8) | 9.3 | 8.2 | 3.9 | Price/DPU(x) | 18.0 | 16.6 | 15.5 | 14.9 | P/BV (x) | 0.8 | 0.7 | 0.7 | 0.8 | DPU yield (%) | 5.6 | 6.0 | 6.4 | 6.7 | ROAE (%) | (0.5) | 9.0 | 2.8 | 3.0 | ROAA (%) | 3.1 | 3.6 | 3.7 | 3.8 | Debt/Assets (x) | 0.3 | 0.4 | 0.4 | 0.4 |
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| | MACRO RESEARCH | | | | | | Money supply growth up in first month of 0% GST
by Suhaimi Ilias |
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| | | | | | Money supply (M3) growth picked up to +5.7% YoY in June 2018 (May 2018: +5.5% YoY), driven by the increase in deposit growth and external reserves as well as supported by stable credit growth. Meanwhile, indicators such as credit card spending as well as auto loan applications and approvals confirm the boost to consumer discretionary spending from the zero-rating of GST that began in June 2018. | |
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| | | | | | KLPRO Index: Taking a Breather
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI closed at its intraday high thanks to late buying support on selected index-linked stocks. At the day's end, the benchmark index rose 13.99pts to 1,784.25, led by gains in PMETAL, TNB, and DIALOG. Market breadth however was weak, with losers outpacing gainers by 479 to 438. A total of 2.71b shares worth MYR3.05b changed hands. FBMKLCI could extend its gains today amid firmer Wall Street overnight. | |
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| NEWS | | | Outside Malaysia:
U.S: Is said to consider higher China tariffs while talks sought. The Trump administration will propose raising to 25% its planned 10% tariffs on USD200 billion in Chinese imports, ratcheting up pressure on Beijing to return to the negotiating table, three people familiar with the internal deliberations said. The U.S. imposed 25% tariffs on USD34 billion of Chinese products in early July, and the review period on another USD16 billion of imports ends Wednesday. President Donald Trump has threatened an additional USD200 billion with levies of 10%, a level the administration may raise to 25% in a Federal Register notice in coming days, one of the people said. The change isn't final yet and may not go forward after a public review, the people said. (Source: Bloomberg)
U.S: Consumer confidence rises as economic optimism holds up. U.S. consumer confidence increased modestly in July as Americans grew more upbeat about the economy and labor market, figures from the New York-based Conference Board showed. Confidence index rose to 127.4 from 127.1 in June. Present conditions measure increased to a 17-year high of 165.9 from a revised 161.7. Consumer expectations gauge slipped for a second month, falling to 101.7 from 104. Gauge of 12-month inflation expectations climbed to highest since October 2015. (Source: Bloomberg)
E.U: Economy gets higher inflation but weaker growth. A bumper day of euro-area economic releases showed the region's vital signs remain good, if not great. While the region's economic expansion entered a sixth year in the second quarter, growth unexpectedly slowed to just 0.3%, the weakest in two years. Inflation accelerated further above the European Central Bank's goal in July, though that was largely driven by stronger energy prices. Unemployment remained at the lowest since 2008. (Source: Bloomberg)
Germany: Unemployment extended its decline as companies hired workers to expand production capacity. The figures are further evidence that while some German companies have warned about the impact of increased global trade tensions, most of the economy is still running strong. Momentum in the private sector picked up in July amid strengthening manufacturing, and the strongest confidence in services since 2011 propelled a gauge for economic sentiment to a five-month high. The Federal Labor Agency in Nuremberg said that the number of people out of work declined by a seasonally adjusted 6,000 to 2.338 million. The jobless rate held at a record low of 5.2%. With capacity utilization running at 88%, close to a record, many businesses are looking to invest. (Source: Bloomberg)
Japan: BOJ Governor pushed through changes to radical monetary stimulus program as the central bank prepares for a longer struggle to stoke inflation. While keeping unchanged its two major benchmarks – the negative interest rate and 10-year yield target -- the BOJ took a number of steps to alleviate the strain on banks and the market distortions stemming from its policy. Yet Kuroda also indicated that the BOJ will tolerate 10-year yields deviating as much as 0.2% from zero, compared with 0.1% now. The BOJ cut its inflation forecasts, showing it's preparing for an even lengthier battle to generate 2% price gains, further widening the gap with global peers who are moving away from crisis-era policies. (Source: Bloomberg) | |
| | | | | Other News:
Opcom: Bags MYR11.16m Unifi contract. Its subsidiary, Opcom Cables S/B was awarded MYR11.16m contract from Telekom Malaysia. The contract, involved the provision of works and services as a 'Rakan Unifi' for a period of 18 months commencing from 2 Jul 2018 to 31 Dec 2019. (Source: The Star)
Serba Dinamik: Collaborates with Hill International for Pengerang project. The group has inked a Heads of Agremeent (HoA) with Hill International NV to jointly undertake the proposed development of the Pengerang International Commercial Centre (PICC) in Pengerang, Johor. The PICC project was initiated by the group, following a Memorandum of Agreement Aug last year. (Source: The Edge Markets)
Datasonic: Fima lawsuit due to pricing disagreement. Datasonic Group, which is yet to receive notice of Fima Corp Bhd's suit against it, said the issue was due to a disagreement between unit Datasonic Technologies S/B (DTSB) and Percetakan Keselamatan Nasional S/B on the pricing of the 1.5m Malaysian passport booklets supplied and should be far less than the claim amount. Fima is suing DTSB for MYR24.98m. (Source: The Sun Daily) | |
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