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Share
Price:
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MYR12.84
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Target
Price:
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MYR14.20
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Recommendation:
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Buy
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Decent start to
the year
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1Q16 results were in line. We expect management’s
continuous focus on cost management, increased exports and better
contributions from Singapore, to drive earnings growth in the near
term. Our earnings forecasts, BUY call and MYR14.20 DCF-TP (8.1% WACC, 2.0%
LT growth) are unchanged. FY16E dividend yield of 6% adds to its
merits.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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1,635.1
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1,659.9
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1,723.6
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1,781.8
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EBITDA
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293.6
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306.0
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323.7
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336.5
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Core net profit
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211.6
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228.3
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236.7
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245.6
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Core EPS (sen)
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69.2
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74.7
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77.4
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80.3
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Core EPS growth (%)
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15.0
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7.9
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3.7
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3.8
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Net DPS (sen)
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69.3
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72.0
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77.0
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80.0
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Core P/E (x)
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18.6
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17.2
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16.6
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16.0
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P/BV (x)
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12.6
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11.7
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11.1
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10.8
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Net dividend yield (%)
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5.4
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5.6
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6.0
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6.2
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ROAE (%)
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72.2
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70.5
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68.8
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68.7
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ROAA (%)
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33.6
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34.5
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35.0
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34.8
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EV/EBITDA (x)
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12.2
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11.7
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12.2
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11.7
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Net debt/equity (%)
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net cash
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net cash
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net cash
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0.9
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Share
Price:
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MYR1.46
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Target
Price:
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MYR1.50
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Recommendation:
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Hold
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3sen first
interim DPS
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Dividend bonanza continues with 1st interim DPS of 3sen.
This compensates for its poor 1Q16 core net profit despite strong
headline profit on land disposal gains and forex translation gains. We
are keeping our DPS and profit forecasts unchanged for now. BPlant
remains a HOLD with an unchanged RNAV-TP of MYR1.50.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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717.3
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615.2
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710.7
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754.2
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EBITDA
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169.8
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112.7
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141.7
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166.4
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Core net profit
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62.8
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31.4
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59.1
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78.8
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Core EPS (sen)
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3.9
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2.0
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3.7
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4.9
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Core EPS growth (%)
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(36.7)
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(49.9)
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87.8
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33.4
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Net DPS (sen)
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6.0
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13.0
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3.7
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4.9
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Core P/E (x)
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37.2
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74.3
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39.6
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29.7
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P/BV (x)
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1.0
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1.1
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1.0
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1.0
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Net dividend yield (%)
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4.1
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8.9
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2.5
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3.4
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ROAE (%)
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3.4
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1.4
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2.6
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3.4
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ROAA (%)
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1.9
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1.0
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1.8
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2.3
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EV/EBITDA (x)
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16.7
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26.4
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19.9
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17.0
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Net debt/equity (%)
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17.9
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22.3
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16.2
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16.2
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Exports and imports fell in Apr 2016 by -8.0% YoY (Mar
2016: -14.3% YoY) and -12.0% YoY (Mar 2016: -9.0% YoY) respectively.
Steeper declines in imports versus exports resulted in wider trade
surplus of SGD6.27b (Mar 2016: SGD 4.95b). MAS shifted its policy to
“neutral” from “modest and gradual appreciation” of SGD NEER last
month.
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Suhaimi Ilias
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Zamros
Dzulkafli
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Technical Research
by Lee
Cheng Hooi
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Sell higher
levels of the rebound
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The FBMKLCI rose by 12.18 points to close at 1,633.39
yesterday, while the FBMEMAS and FBM100 gained 65.80 and 63.75 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 481-to-340, while 334 counters were unchanged. A total of 1.70b
shares were traded valued at MYR1.72b.
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NEWS
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Outside Malaysia:
U.S: New-home construction rose in April, extending a
pattern of gains and losses that signals the homebuilding industry is
contributing little to economic growth. Residential starts increased 6.6%
to a 1.17 million annualized rate from 1.1 million in March, Commerce
Department data showed. Permits, a proxy for future construction, also
climbed. (Source: Bloomberg)
U.K: Inflation unexpectedly slowed in April, highlighting
the struggle Bank of England policy makers face to revive price growth.
The rate fell to 0.3% from 0.5% in March, driven lower by the cost of air
fares and clothes, the Office for National Statistics said. Inflation has
been below the BOE’s 2% target for more than two years, largely due to
lower oil costs and a stronger pound. (Source: Bloomberg)
U.K: Home-price growth accelerated to the fastest pace in
a year as stamp-duty changes prompted a surge in demand from landlords in
the first quarter. Values rose an annual 9% in March, up from 7.6% the
previous month, the Office for National Statistics said. That’s the
biggest increase since March 2015. In London, prices jumped 13%, the most
since December 2014. The upward momentum adds to evidence that investors
rushed to buy properties before a tax increase took effect in April.
(Source: Bloomberg)
Japan: Dodges recession on modest increase in consumer
spending. Japan’s economy returned to growth in the first quarter as a
small increase in consumer spending helped the nation avoid another
recession. Gross domestic product expanded by an annualized 1.7% in the
three months ended March 31, following a revised 1.7% contraction in the
previous quarter, the Cabinet Office said. There was little in the
figures to indicate that Japan is pulling free of the cycle of expansion
and contraction that’s plagued the economy for decades, despite more than
three years of Abenomics and record monetary stimulus from the central
bank. (Source: Bloomberg)
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Other news:
UMW O&G: Cuts 300 jobs. UMW Oil & Gas Corporation
(UMWOG) has cut 300 jobs as part of its cost rationalization strategy and
will be laying off more workers going forward, in an effort to improve
its efficiency amid the current challenges faced by the oil and gas
industry. The group’s workforce stands at 736 employees, after letting go
of 300 contract workers. The company is focused on rationalizing contract
workers and less on permanent staff. (Source: The Edge Financial Daily)
Zelan: Eyes MYR4b local infrastructure contracts in 2016.
Zelan is eyeing MYR4b worth of contracts this year, comprising local
infrastructure projects, as it winds down its overseas operations.
Despite the challenging economy, Zelan is still participating in tenders
for local infrastructure projects. Up until April, the company has
submitted over 10 tenders, valued at more than MYR4b. The company is
focusing on its local operations as the group aims to eventually wind
down its foreign operations. (Source: The Edge Financial Daily)
Icon Offshore: Buoyant as oil prices improve. Offshore
support vessel player Icon Offshore hopes to maintain its fleet
utilization rate at the current 60% level, in anticipation of an
improvement in oil and gas activities following the rebound in global oil
prices. The company believes that the supply and demand dynamic is
beginning to change, creating an environment which allows oil majors to
consider investments again. The company expects to return to the black
this year with a resilient fleet utilization rate, despite a 20% to 30%
drop in charter rates. (Source: The Sun Daily)
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