[Maybank Kim Eng] Today's Research - Malaysia

19 Oct 2015, Monday

g Company Research - IHH Healthcare: First JV hospital in China | John Cheong - UMW Oil & Gas: Tough, soft, weak | Thong Jung Liaw - CapitaLand Malaysia Mall Trust: Below expectations; D/G to HOLD | Kevin Wong - Nestle Malaysia: Serves Writs of Summons | Liew Wei Han g Macro Research - Singapore: Singapore NODX, September ‘15 - Marginally up… | Suhaimi Ilias - Malaysia: Technicals - Awaiting earnings and Budget Day | Lee Cheng Hooi - Malaysia: Other News - | Malaysia Research Team

MY: IHH Healthcare (IHH MK) Share Price: MYR6.56 Target Price: MYR6.35 Recommendation: Hold John Cheong (65) 6231 5845 johncheong@maybank-ke.com.sg Company Update: First JV hospital in China FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 6,756.5 7,344.0 8,739.3 10,551.0 EBITDA 1,749.8 1,943.0 2,294.1 2,703.7 Core net profit 610.6 754.7 964.7 1,169.4 Core FDEPS (sen) 7.4 9.2 11.7 14.1 Core FDEPS growth(%) 48.5 23.5 27.2 21.2 Net DPS (sen) 2.0 3.0 3.1 3.6 Core FD P/E (x) 88.3 71.5 56.2 46.4 P/BV (x) 3.0 2.8 2.7 2.6 Net dividend yield (%) 0.3 0.5 0.5 0.5 ROAE (%) 3.5 4.0 4.9 5.7 ROAA (%) 2.3 2.7 3.3 3.9 EV/EBITDA (x) 20.3 22.1 25.5 21.5 Net debt/equity (%) 12.8 9.3 13.4 9.6 §  Entered into a JV to lease and operate a 350-bed hospital in Chengdu, China. This is LT positive, providing a stronger foothold in an underpenetrated high demand market. §  Hospital is expected to open in 2H17 and we expect it to be EBITDA positive in 2 years; no change to our EPS forecasts. §  Maintain HOLD and TP of MYR6.35 as we believe the positives from its LT prospects have been priced in. MY: UMW Oil & Gas (UMWOG MK) Share Price: MYR1.38 Target Price: MYR0.80 Recommendation: Sell Thong Jung Liaw (603) 2297 8688 tjliaw@maybank-ib.com Ivan Yap (603) 2297 8612 ivan.yap@maybank-ib.com Company Update: Tough, soft, weak FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 737.8 1,016.3 927.3 892.3 EBITDA 311.8 411.9 157.4 77.0 Core net profit 166.4 248.5 (103.3) (184.4) Core EPS (sen) 7.7 11.5 (4.8) (8.5) Core EPS growth (%) 182.5 49.4 nm nm Net DPS (sen) 0.0 100.0 0.0 0.0 Core P/E (x) 17.9 12.0 (28.9) (16.2) P/BV (x) 1.1 0.9 1.0 1.0 Net dividend yield (%) 0.0 72.5 0.0 0.0 ROAE (%) 10.9 8.2 (3.3) (6.1) ROAA (%) 5.7 5.2 (1.7) (3.0) EV/EBITDA (x) 26.6 15.0 34.2 70.1 Net debt/equity (%) net cash 33.6 77.4 82.5 §  Naga 8 secures charter at sub-USD100k DCR but overall low utilisation is a concern; 75% of UMWOG’s rigs are idle. §  Raise core net loss forecasts for 2015-17 on reduced rigs utilisation and lower DCR forecasts. §  Reiterate SELL with an unchanged MYR0.80 TP, based on 0.8x EV/replacement value peg. MY: CapitaLand Malaysia Mall Trust (CMMT MK) Share Price: MYR1.40 Target Price: MYR1.45 Recommendation: Hold Kevin Wong (603) 2082 6824 kevin.wong@maybank-ib.com Wei Sum Wong (603) 2297 8679 weisum@maybank-ib.com Rating Change: Below expectations; D/G to HOLD FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 305.1 315.4 345.2 381.1 Net property income 208.6 208.9 237.0 261.0 Distributable income 156.8 158.4 155.2 176.9 DPU (sen) 8.0 8.0 8.7 8.8 DPU growth (%) 4.9 0.7 8.5 1.1 Price/DPU(x) 17.6 17.5 16.1 15.9 P/BV (x) 1.1 1.1 1.1 1.2 DPU yield (%) 5.7 5.7 6.2 6.3 ROAE (%) 6.9 6.7 6.5 7.1 ROAA (%) 4.7 4.5 4.3 4.6 Debt/Assets (x) 0.3 0.3 0.3 0.3 §  3Q15 core net profit of MYR40m (+11% YoY) fell short; SWP continues to drag earnings. §  We tweak our SWP assumptions and shave FY15-17 earnings by 5.6-6.7%. §  Downgrade to HOLD with a lower MYR1.45 TP (-10sen). MY: Nestle Malaysia (NESZ MK) Share Price: MYR72.44 Target Price: MYR68.00 Recommendation: Hold Liew Wei Han (603) 2297 8676 weihan.l@maybank-ib.com Company Update: Serves Writs of Summons FYE Dec (MYR m) FY13A FY14A FY15E FY16E Revenue 4,787.9 4,808.9 4,977.2 5,350.5 EBITDA 843.6 837.2 914.6 972.7 Core net profit 561.7 550.4 579.8 611.3 Core EPS (sen) 239.5 234.7 247.3 260.7 Core EPS growth (%) 11.2 (2.0) 5.4 5.4 Net DPS (sen) 235.0 235.0 239.9 252.9 Core P/E (x) 30.2 30.9 29.3 27.8 P/BV (x) 20.8 21.9 21.4 20.9 Net dividend yield (%) 3.2 3.2 3.3 3.5 ROAE (%) 71.7 69.1 73.8 76.1 ROAA (%) 28.1 25.1 25.0 25.5 EV/EBITDA (x) 19.0 19.4 18.9 17.7 Net debt/equity (%) 10.4 20.4 33.3 23.5 §  Nestle has demanded MYR21.6m from Century Logistics’ unit for failure to exercise care in its services. CTL counter claims, seeking MYR9.3m in damages. §  There would be a 2.0-3.5% upside to our FY16 earnings estimates for Nestle depending on the court’s ruling. §  Maintain HOLD with an unchanged TP of MYR68.00. SG: Singapore NODX, September ‘15 Suhaimi Ilias (603) 2297 8682 suhaimi_ilias@maybank-ib.com Zamros Dzulkafli (603) 2082 6818 zamros.d@maybank-ib.com Economics Research: Marginally up… §  NODX up slightly in Sep 2015 to reverse July-Aug 2015 drop §  On rebound in electronic exports amid further fall in non-electronic exports §  Exports remain lackluster, mainly dragged by slowing China MY: Technicals Lee Cheng Hooi (603) 2297 8694 chenghooi.lee@maybank-ib.com Technical Research: Awaiting earnings and Budget Day §  FBM KLCI – Awaiting Budget Day 2016 on 23 Oct. §  CPO Futures – Some support seen at MYR2,240. §  DJIA – Awaiting the results and earnings season. §  KOSSAN – A very strong triple time frame uptrend stock. MY: Other News Malaysia Research Team Economics Research: Outside Malaysia —   U.S: Factory output fell in September for a second month —   U.K: London property prices reach another record in sellers’ market Malaysia —   Banking: Bank targets growth regions —   Cahya Mata Sarawak: MPA to sign EPC contract for phosphate complex —   Ekovest: On track to start construction on DUKE phase 3 —   Bintulu Port Holdings: IMW bags MYR21m Bintulu Port job