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Share
Price:
|
MYR3.23
|
|
Target
Price:
|
MYR3.80
|
|
Recommendation:
|
Buy
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Oversold; U/G to
BUY
|
|
The market could have overreacted to the weak earnings and
default concerns at OMS with the MYR2b YTD drop in CMS’ market cap that
is 3x the potential write-off from OMS. While OMS’ forex loss could
still affect its 2Q16 headline earnings, core earnings would improve
going forward. Current share price undervalues its stable core
businesses and assets including Sacofa’s concession and its property
landbank. Sentiment would improve on the potential positive catalysts.
Upgrade CMS to BUY.
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
1,673.9
|
1,788.0
|
1,543.9
|
2,022.1
|
|
EBITDA
|
372.5
|
398.2
|
345.0
|
418.4
|
|
Core net profit
|
221.3
|
248.1
|
182.4
|
233.1
|
|
Core EPS (sen)
|
21.3
|
23.1
|
17.0
|
21.7
|
|
Core EPS growth (%)
|
23.9
|
8.5
|
(26.5)
|
27.8
|
|
Net DPS (sen)
|
8.5
|
4.5
|
6.8
|
8.7
|
|
Core P/E (x)
|
15.2
|
14.0
|
19.0
|
14.9
|
|
P/BV (x)
|
1.9
|
1.7
|
1.6
|
1.5
|
|
Net dividend yield (%)
|
2.6
|
1.4
|
2.1
|
2.7
|
|
ROAE (%)
|
12.8
|
13.0
|
8.8
|
10.6
|
|
ROAA (%)
|
8.5
|
8.2
|
5.3
|
6.2
|
|
EV/EBITDA (x)
|
9.8
|
14.2
|
11.3
|
9.5
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
4.9
|
5.0
|
|
|
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|
|
|
|
Share
Price:
|
MYR4.18
|
|
Target
Price:
|
MYR4.59
|
|
Recommendation:
|
Buy
|
|
|
|
|
|
|
|
|
Strong headline
profits
|
|
IOI posted a sequentially stronger headline net profit in
3QFY16, boosted by forex translation gains and fair valuation (FV)
gains on financial instruments. Pending an update, we are keeping our
earnings forecasts. But we believe recent selldown due to its RPSO
suspension is overdone. We maintain our contrarian BUY with an
unchanged TP of MYR4.59.
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|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
12,664.1
|
11,621.0
|
11,944.6
|
11,167.6
|
|
EBITDA
|
2,376.3
|
847.4
|
1,545.5
|
1,638.2
|
|
Core net profit
|
1,549.4
|
860.1
|
923.3
|
988.8
|
|
Core FDEPS (sen)
|
24.0
|
13.3
|
14.3
|
15.3
|
|
Core FDEPS growth(%)
|
(6.9)
|
(44.6)
|
7.4
|
7.1
|
|
Net DPS (sen)
|
20.0
|
9.0
|
7.1
|
7.7
|
|
Core FD P/E (x)
|
17.4
|
31.4
|
29.2
|
27.3
|
|
P/BV (x)
|
4.5
|
5.3
|
4.9
|
4.5
|
|
Net dividend yield (%)
|
4.8
|
2.2
|
1.7
|
1.8
|
|
ROAE (%)
|
15.7
|
15.5
|
17.5
|
17.1
|
|
ROAA (%)
|
7.9
|
6.0
|
6.8
|
7.2
|
|
EV/EBITDA (x)
|
15.8
|
36.9
|
20.6
|
19.1
|
|
Net debt/equity (%)
|
58.6
|
96.1
|
83.8
|
68.8
|
|
|
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|
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|
|
|
|
|
|
Share
Price:
|
MYR1.54
|
|
Target
Price:
|
MYR1.90
|
|
Recommendation:
|
Buy
|
|
|
|
|
|
|
|
|
Direct proxy to
Pengerang play
|
|
9MFY6/16 core earnings made up 76% of our full year’s
forecast. Dialog’s investment thesis is intact. It is a long term,
sustained growth stock, leveraging on its Pengerang (tank terminal and
regas projects) operations. It is net cash, atypical to its industry
peers, testament to its lean management and largely cashflow driven
tank terminal businesses. Our TP of MYR1.90 is SOP-based.
|
|
|
|
|
|
|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
2,551.7
|
2,358.2
|
2,640.0
|
2,640.0
|
|
EBITDA
|
280.9
|
292.0
|
294.9
|
295.7
|
|
Core net profit
|
211.0
|
253.2
|
262.5
|
277.1
|
|
Core EPS (sen)
|
4.3
|
5.1
|
5.3
|
5.6
|
|
Core EPS growth (%)
|
6.5
|
18.3
|
3.7
|
5.5
|
|
Net DPS (sen)
|
2.1
|
2.2
|
2.1
|
2.2
|
|
Core P/E (x)
|
35.8
|
30.2
|
29.2
|
27.6
|
|
P/BV (x)
|
4.8
|
3.9
|
3.6
|
3.3
|
|
Net dividend yield (%)
|
1.4
|
1.4
|
1.4
|
1.4
|
|
ROAE (%)
|
14.5
|
14.3
|
12.8
|
12.5
|
|
ROAA (%)
|
6.9
|
7.4
|
7.6
|
8.2
|
|
EV/EBITDA (x)
|
34.7
|
27.3
|
27.7
|
28.0
|
|
Net debt/equity (%)
|
29.3
|
net cash
|
20.4
|
23.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR2.72
|
|
Target
Price:
|
MYR3.20
|
|
Recommendation:
|
Buy
|
|
|
|
|
|
|
|
|
Is the worst
over?
|
|
While the blip in the RF division in 3QFY6/16 was
expected, we caution that further deferment of shipment beyond that is
not impossible as its main end client (a premium smartphone maker) has
continued to guide for inventory rationalisation. We keep our forecasts
unchanged pending an analyst briefing today. Over the longer term,
Inari’s outlook remains intact with potential job wins following its
latest plant acquisition. Maintain BUY; MYR3.20 TP (15x CY17 PER) is
unchanged.
|
|
|
|
|
|
|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
793.7
|
933.1
|
1,077.9
|
1,341.4
|
|
EBITDA
|
134.8
|
187.3
|
200.5
|
275.9
|
|
Core net profit
|
102.8
|
151.5
|
147.4
|
194.6
|
|
Core EPS (sen)
|
11.3
|
16.3
|
15.2
|
20.0
|
|
Core EPS growth (%)
|
138.9
|
43.9
|
(6.9)
|
32.1
|
|
Net DPS (sen)
|
6.8
|
8.9
|
6.1
|
8.0
|
|
Core P/E (x)
|
24.0
|
16.7
|
17.9
|
13.6
|
|
P/BV (x)
|
9.6
|
4.7
|
4.2
|
3.5
|
|
Net dividend yield (%)
|
2.5
|
3.3
|
2.2
|
2.9
|
|
ROAE (%)
|
49.4
|
38.1
|
25.3
|
28.3
|
|
ROAA (%)
|
23.6
|
22.7
|
16.4
|
18.8
|
|
EV/EBITDA (x)
|
15.6
|
11.9
|
12.5
|
9.3
|
|
Net debt/equity (%)
|
6.7
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR2.20
|
|
Target
Price:
|
MYR2.05
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
Better days
ahead
|
|
In line with our expectations, MBM’s 2016 will be a tale
of two halves whereby 2H16 should be stronger HoH, driven by the launch
of Perodua’s sedan model. Pending further clarity (i.e. price points,
targets, specifications) on the sedan model’s launch, we maintain our
earnings forecasts, HOLD rating and TP of MYR2.05 based on 9x FY16 EPS.
Downside is cushioned by a FY16 P/BV of 0.5x.
|
|
|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
1,774.1
|
1,816.7
|
1,752.8
|
1,771.6
|
|
EBITDA
|
17.8
|
43.9
|
24.0
|
28.9
|
|
Core net profit
|
112.2
|
83.5
|
88.9
|
106.1
|
|
Core EPS (sen)
|
28.7
|
21.4
|
22.7
|
27.2
|
|
Core EPS growth (%)
|
(18.8)
|
(25.5)
|
6.4
|
19.4
|
|
Net DPS (sen)
|
8.0
|
10.0
|
8.0
|
8.0
|
|
Core P/E (x)
|
7.7
|
10.3
|
9.7
|
8.1
|
|
P/BV (x)
|
0.6
|
0.5
|
0.5
|
0.5
|
|
Net dividend yield (%)
|
3.6
|
4.5
|
3.6
|
3.6
|
|
ROAE (%)
|
7.6
|
5.4
|
5.5
|
6.3
|
|
ROAA (%)
|
4.6
|
3.5
|
3.6
|
4.1
|
|
EV/EBITDA (x)
|
91.1
|
32.0
|
50.8
|
40.9
|
|
Net debt/equity (%)
|
13.1
|
10.1
|
2.7
|
net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR2.30
|
|
Target
Price:
|
MYR2.30
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
3QFY16 above
expectations
|
|
3QFY6/16 results beat estimates whereby sales were driven
by strong organic growth and new stores. While a fourth interim net DPS
of 2.5sen was in line, a 1.5sen special net DPS came as a surprise. We
increase FY16-18 earnings by 4-10%. Our higher TP of MYR2.30 (+30sen)
is pegged to 11x FY17 PER (from 10.5x CY16 PER).
|
|
|
|
|
|
|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
866.3
|
977.9
|
1,287.6
|
1,474.7
|
|
EBITDA
|
147.6
|
145.3
|
208.1
|
218.5
|
|
Core net profit
|
90.9
|
80.2
|
132.0
|
137.2
|
|
Core EPS (sen)
|
13.8
|
12.2
|
20.1
|
20.8
|
|
Core EPS growth (%)
|
6.5
|
(11.8)
|
64.6
|
3.9
|
|
Net DPS (sen)
|
11.5
|
10.0
|
11.5
|
10.0
|
|
Core P/E (x)
|
16.6
|
18.9
|
11.5
|
11.0
|
|
P/BV (x)
|
3.9
|
3.7
|
3.3
|
2.8
|
|
Net dividend yield (%)
|
5.0
|
4.3
|
5.0
|
4.3
|
|
ROAE (%)
|
23.9
|
20.2
|
30.3
|
27.3
|
|
ROAA (%)
|
16.8
|
13.7
|
20.1
|
18.0
|
|
EV/EBITDA (x)
|
8.0
|
4.6
|
6.2
|
5.7
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECTOR RESEARCH
|
|
|
|
|
|
|
|
Sector Note
by Thong
Jung Liaw
|
|
|
|
|
|
|
PETRONAS’ 1Q16
report card
|
|
|
|
|
|
|
PETRONAS’ weak 1Q16 results were expected and clearly
expose the dire state of the industry – low oil price level, cost/
capex cuts, reduced activities, cancellations and deferments, just to
name a few. The key positive from this is that PETRONAS is profitable
at USD34/bbl. We remain Neutral on the sector. A concerted cut in
global oil production is key to a re-look of the sector. Volatility
offers multiple trading cycles, especially on high-beta, beaten down
stocks.
|
|
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|
|
|
|
|
|
|
|
Apr 2016 TIV sales made a U-turn and headed back to a
MoM contraction, recording just 42.2k units (-14% MoM, -7% YoY). At
this juncture, downside to our 2016 TIV forecast of 620k units (-7%
YoY) is likely, should monthly TIV sustain below the 55k-unit level
going forward. We keep our TIV forecast unchanged for now but
tactically downgrade the sector to NEGATIVE based on a bottom-up
approach (SELL rating on UMWH and TCM unchanged). We remain BUYers of
Pecca and BAuto. HOLD on MBM.
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
MACRO RESEARCH
|
|
|
|
|
|
|
|
Technical Research
by Lee
Cheng Hooi
|
|
|
|
|
|
|
An unimpressive
price rebound
|
|
|
|
|
|
|
The FBMKLCI rose by 2.33 points to close at 1,635.72
yesterday, while the FBMEMAS and FBM100 gained 8.66 and 11.37 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 305-to-516, while 379 counters were unchanged. A total of 1.88b
shares were traded valued at MYR1.99b.
|
|
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|
|
|
NEWS
|
|
|
Outside Malaysia:
U.S: Fed puts June rate increase on table provided economy
says go. Minutes of the April 26-27 Federal Open Market Committee meeting
released in Washington used the word “June” six times in a policy
context. That signal follows several speeches by regional Fed bank
presidents warning investors not to dismiss a mid-year hike after the
odds of such a move edged close to zero. (Source: Bloomberg)
U.S. Manufacturers, services trim 2016 sales forecast, ISM
says. Manufacturers and service providers are less optimistic about sales
this year than they were at the end of 2015, according to a survey by the
Institute for Supply Management. Revenue to rise 2.8% at factories, down
from the 4.1% advance projected in December. Business investment will
increase 1% for manufacturers; advance 6.2% for service industries. Weak
overseas growth remains a drag on manufacturing, though the industry has
shown signs of stabilizing more recently. Service providers, who are
shielded to a larger extent from global challenges, have been faring
better. About 32% of manufacturers said last year’s dollar strength has
hurt profits, while only 13% of service providers said so. Last year’s
decline in oil prices has been a benefit to both factories and service
companies. (Source: Bloomberg)
U.K: Jobs market showed signs of cooling in the first
quarter as Britain prepares for an increasingly bitter referendum on its
European Union membership. The number of people in work rose by 44,000,
less than a quarter of the gain seen at the end of 2015, the Office for
National Statistics said. Unemployment fell 2,000, leaving the jobless
rate at a decade-low 5.1%. The employment rate edged up to 74.2%.
(Source: Bloomberg)
China: Home prices rose in the most Chinese cities in more
than two years in April, with gains in second-tier cities surpassing
advances in larger hubs. New-home prices excluding government-subsidized
housing climbed in 65 cities, compared with 62 in March, among the 70
cities tracked by the government, the National Bureau of Statistics said.
That’s the most cities since December 2013. Prices dropped in five cities
in April, compared with eight a month earlier. The latest figures signal
that the government is gaining traction in its efforts to clear a glut of
unsold homes in smaller cities while encouraging curbs in top economic
hubs including Shanghai and Shenzhen, where prices have surged rapidly
amid stimulus measures and lower interest rates. (Source: Bloomberg)
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|
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|
|
Other news:
TH Plantations: In degearing mode. TH Plantations, which
plans to embark on a degearing exercise this year, hopes to get back on
track with its target of 50% dividend payout. The company’s net gearing
levels are already at maximum levels of 0.71 times and it aims to reduce
its gearing to 0.5 times as a start and then lower it further. TH Plant
will be very susceptible if crude palm oil prices dip below MYR2,300 a
tonne. (Source: The Sun Daily)
EA Technique: Confident of keeping its FSO deals. EA
Technique (M) foresees no challenges in its floating, storage and
offloading (FSO) segment as most of its contracts serve the downstream
segment and are on long-term charters. The bulk or 91% of EA Technique’s
fleet of 35 vessels are on long-term charters. The company’s FSO
contracts had not faced any early termination so far and are for the
transporting of clean petroleum products like jet fuel and RON95 fuel,
which see more demand than the upstream oil and gas segment. The only
challenge arises from requests from clients to revise charter rates.
(Source: The Edge Financial Daily)
Tien Wah: Hopes to sustain growth. Printing and packaging
group Tien Wah Press Holdings said its growth momentum will be driven by
its tobacco business. Despite a slight impact on the Malaysian tobacco
business due to recent exise hikes, the cigarette business is still doing
well in Tien Wah’s other markets. The company is also confident of
securing a contract renewal from its major customer, British American
Tobacco (M) for another three years. The company is now into the final
year of a long-term supply contract with its major customer. (Source: The
Edge Financial Daily)
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