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Share
Price:
|
MYR0.47
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Target
Price:
|
MYR0.80
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Recommendation:
|
Buy
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Secures MYR175m
EPC job
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The EPC job win worth MYR175m from Norman Process Oils is
a positive development to its orderbook replenishment for existing
operations (process equipment). Nonetheless, the key re-rating catalyst
to KNM is the successful remodelling of its business model, from a
cyclical to a more secured, recurring based income via its potential
exposure to the build, own, operate (BOO) waste-to-energy (WTE)
operations in Thailand and UK. This would be realised from as early as
3Q16. BUY.
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FYE Dec (MYR m)
|
FY14A
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FY15A
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FY16E
|
FY17E
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Revenue
|
1,865.1
|
1,641.3
|
1,830.7
|
2,170.4
|
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EBITDA
|
207.9
|
208.4
|
210.1
|
254.5
|
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Core net profit
|
36.8
|
45.7
|
105.5
|
140.1
|
|
Core EPS (sen)
|
2.4
|
2.4
|
5.6
|
7.5
|
|
Core EPS growth (%)
|
61.2
|
3.4
|
131.0
|
32.8
|
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Net DPS (sen)
|
0.0
|
0.0
|
0.0
|
0.0
|
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Core P/E (x)
|
19.7
|
19.0
|
8.2
|
6.2
|
|
P/BV (x)
|
0.3
|
0.3
|
0.3
|
0.3
|
|
Net dividend yield (%)
|
0.0
|
0.0
|
0.0
|
0.0
|
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ROAE (%)
|
1.7
|
1.9
|
3.8
|
4.9
|
|
ROAA (%)
|
0.9
|
1.1
|
2.4
|
3.1
|
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EV/EBITDA (x)
|
6.3
|
7.0
|
6.0
|
4.5
|
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Net debt/equity (%)
|
27.1
|
19.1
|
14.7
|
9.7
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Share
Price:
|
MYR7.35
|
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Target
Price:
|
MYR7.20
|
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Recommendation:
|
Hold
|
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Precursor to
special DPS?
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|
Following the disposal of its remaining Digi shares, it is
possible that TDC could pay out the proceeds to shareholders via a
special dividend. This would likely help to sustain share price at
current lofty valuations, in our view. HOLD rating maintained, with a
marginally lower MYR7.20 TP.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
596.3
|
682.4
|
757.1
|
859.8
|
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EBITDA
|
217.8
|
263.9
|
272.6
|
309.5
|
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Core net profit
|
127.3
|
171.2
|
160.5
|
189.7
|
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Core EPS (sen)
|
22.2
|
29.8
|
27.9
|
33.0
|
|
Core EPS growth (%)
|
(51.1)
|
34.1
|
(6.4)
|
18.2
|
|
Net DPS (sen)
|
5.6
|
80.2
|
7.1
|
8.2
|
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Core P/E (x)
|
33.1
|
24.7
|
26.4
|
22.3
|
|
P/BV (x)
|
1.8
|
2.0
|
2.0
|
1.9
|
|
Net dividend yield (%)
|
0.8
|
10.9
|
1.0
|
1.1
|
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ROAE (%)
|
5.8
|
7.7
|
7.7
|
8.8
|
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ROAA (%)
|
5.0
|
6.4
|
6.1
|
7.0
|
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EV/EBITDA (x)
|
12.0
|
16.2
|
14.0
|
11.8
|
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Share
Price:
|
MYR5.87
|
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Target
Price:
|
MYR6.30
|
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Recommendation:
|
Hold
|
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Capital
repayment of RHB Bank shares
|
|
The proposed capital distribution of 1.3 RHB Bank shares
for every 1 RHB Capital (RHB) shares, is as expected. The entire
restructuring exercise should be completed by Jul 2016. Our MYR6.30 TP
is unchanged, pegging RHB Bank’s proforma 2016 BV to a multiple of 0.9x
(estd. ROE 9%) while accounting for the share swap ratio as well. HOLD
maintained.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Operating income
|
6,234.9
|
6,191.2
|
6,303.2
|
6,572.7
|
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Pre-provision profit
|
2,823.7
|
2,398.0
|
2,863.4
|
2,991.6
|
|
Core net profit
|
1,925.6
|
1,689.2
|
1,775.7
|
1,831.1
|
|
Core EPS (MYR)
|
0.71
|
0.65
|
0.57
|
0.59
|
|
Core EPS growth (%)
|
3.2
|
(9.2)
|
(11.5)
|
2.6
|
|
Net DPS (MYR)
|
0.06
|
0.12
|
0.14
|
0.15
|
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Core P/E (x)
|
8.2
|
9.0
|
10.2
|
10.0
|
|
P/BV (x)
|
0.8
|
0.8
|
1.1
|
1.0
|
|
Net dividend yield (%)
|
1.0
|
2.0
|
2.4
|
2.6
|
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Book value (MYR)
|
7.31
|
7.51
|
5.40
|
5.89
|
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ROAE (%)
|
10.8
|
8.1
|
8.9
|
10.5
|
|
ROAA (%)
|
0.9
|
0.8
|
0.8
|
0.8
|
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Share
Price:
|
MYR1.62
|
|
Target
Price:
|
MYR1.90
|
|
Recommendation:
|
Buy
|
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Weak car sales
to affect earnings
|
|
Weak car sales/production raise concerns on Pecca’s
revenue especially in 4MCY16. The top six car marques, contributing 80%
of Pecca’s revenue in FY15, saw YoY contraction in sales volume in
4MCY16, affected by weak consumer sentiment and price hikes. Pending
3QFY16 results due out on 24 May, we keep our forecasts unchanged but
with downside potential. Maintain BUY; MYR1.90 TP (13x CY17 PER).
|
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|
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|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
99.5
|
129.5
|
141.6
|
154.0
|
|
EBITDA
|
22.6
|
27.8
|
30.9
|
36.0
|
|
Core net profit
|
14.5
|
17.9
|
20.1
|
25.1
|
|
Core EPS (sen)
|
7.7
|
9.5
|
10.7
|
13.4
|
|
Core EPS growth (%)
|
37.4
|
23.9
|
11.9
|
25.2
|
|
Net DPS (sen)
|
5.1
|
4.4
|
5.3
|
6.7
|
|
Core P/E (x)
|
21.0
|
17.0
|
15.2
|
12.1
|
|
P/BV (x)
|
5.1
|
4.4
|
2.1
|
2.0
|
|
Net dividend yield (%)
|
3.2
|
2.7
|
3.3
|
4.1
|
|
ROAE (%)
|
25.1
|
27.6
|
18.9
|
16.9
|
|
ROAA (%)
|
16.3
|
17.5
|
14.6
|
14.6
|
|
EV/EBITDA (x)
|
na
|
na
|
7.4
|
6.3
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
Share
Price:
|
MYR0.97
|
|
Target
Price:
|
MYR1.07
|
|
Recommendation:
|
Buy
|
|
|
|
|
|
|
|
|
Minor shortfall
from KOMTAR JBCC
|
|
1Q16 earnings were below our expectations mainly due to
lower-than-expected occupancy rates and percentage rent income at
KOMTAR JBCC mall. We lower FY16 earnings by -6% after adjusting KOMTAR
JBCC’s key assumptions. Our DCF-based TP of MYR1.07 is unchanged (WACC:
7.2%, terminal yield: 7%).
|
|
|
|
|
|
|
FYE na (MYR m)
|
FYna
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
na
|
20.7
|
74.4
|
80.9
|
|
Net property income
|
na
|
15.7
|
52.9
|
58.7
|
|
Distributable income
|
na
|
7.1
|
31.8
|
37.6
|
|
DPU (sen)
|
na
|
1.1
|
4.9
|
5.5
|
|
DPU growth (%)
|
na
|
na
|
356.4
|
12.3
|
|
Price/DPU(x)
|
na
|
90.3
|
19.8
|
17.6
|
|
P/BV (x)
|
na
|
1.0
|
1.0
|
1.0
|
|
DPU yield (%)
|
na
|
1.1
|
5.1
|
5.7
|
|
ROAE (%)
|
na
|
na
|
5.4
|
6.3
|
|
ROAA (%)
|
na
|
na
|
3.3
|
3.9
|
|
Debt/Assets (x)
|
na
|
0.4
|
0.4
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECTOR RESEARCH
|
|
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|
|
Sector Note
by
Desmond Ch'ng
|
|
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|
|
Base Rates rise
for some banks
|
|
|
|
|
|
|
The move by Public Bank and HL Bank to raise their
Base Rates (BR) by 10bps is marginally positive in alleviating some
of the pressure on their NIMs. The scope for the other domestic banks
(with the exception of Maybank) to follow suit appears limited at this
stage, amid declining interbank rates. We maintain our NEUTRAL call
on the sector, with BUYs on AFG, HL Bank and HLFG. Public Bank is a
HOLD.
|
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|
MACRO RESEARCH
|
|
|
|
|
|
|
|
Economics Research
by
Suhaimi Ilias
|
|
|
|
|
|
|
|
|
|
|
Headline and core inflation rate moderated to +2.1%
YoY (Mar 2016: +2.6% YoY) and +2.3% YoY (Mar 2016: +3.6% YoY)
respectively. YTD 2016 headline inflation is +3.2% YoY while core
inflation is at +3.3% YoY. We adjusted our 2016 headline inflation
rate forecast range to 2.7%-3.2% from 3.0%-3.5% previously.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Economics Research
by
Suhaimi Ilias
|
|
|
|
|
|
|
|
|
|
|
External reserves as at 13 May 2016 rose to USD97.2b
(MYR382.3b) from USD97.0b (MYR381.4b) on 30 Apr 2016. This is
equivalent to 7.9 months of retained imports and 1.2 times of
short-term external debt. Latest figure remains up trend amid mix
trends in capital flows. Year-to-date, external reserves increased by
+2.0% from USD95.3b at end-2015.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technical Research
by Lee
Cheng Hooi
|
|
|
|
|
|
|
Respite before
turbulence continues
|
|
|
|
|
|
|
The FBM KLCI edged up 0.53 points WoW to close at
1,628.79. The market traded in a narrow range and average daily
volume fell from 1.88b to 1.39b shares last week.
|
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NEWS
|
|
|
Outside Malaysia:
Brazil: New economic team downgrades expectations for
budget. Brazil’s new economic team projects the largest budget deficit
before interest payments on record this year, underscoring the challenge
Acting President Michel Temer will face in turning around Latin America’s
biggest economy. Temer’s administration will submit a bill that would
allow it to report a primary budget gap of BRL 170.5b (USD 48.4b) in
2016, Finance Minister Henrique Meirelles said. The estimate is realistic
and transparent, and doesn’t include possible spending cuts and revenue
increases that require congressional approval, he said. It’s for the
central government only, meaning it doesn’t take into consideration state
or city budgets. (Source: Bloomberg)
Japan: Exports post seventh monthly decline in April on
stronger Yen, underscoring the mounting challenges to Prime Minister
Shinzo Abe’s efforts to revive economic growth. Overseas shipments
declined 10.1% YoY in April, the Ministry of Finance said. Imports fell
23.3% YoY, leaving a trade surplus of JPY 823.5b (USD 7.5b). (Source:
Bloomberg)
Crude Oil: Iran won’t freeze oil output as it gears up for
OPEC meeting. Iran, which is due to meet with OPEC partners on June 2,
has no plan to join any freeze in crude output as the country won’t be
done ramping up oil exports to pre-sanctions levels before the second
half of the year, the head of the state oil company said. The Persian
Gulf state’s oil exports will likely surpass 2.2 million barrels a day by
the middle of the summer, Rokneddin Javadi, managing director of National
Iranian Oil Co., told Mehr news agency. Iran last exported at this level
before sanctions were imposed on the country for its nuclear program more
than four years ago. Sanctions were eased in January, and Iranian officials
said they won’t discuss any output freeze or cut before reaching
pre-sanctions levels. (Source: Bloomberg)
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Other news:
Utilities: Edra to build MYR400m solar plant in Kedah.
Edra, recently acquired by China General Nuclear Power Corp for MYR9.83b
is set to build a MYR400m solar power plant in Kedah. The plant in Kuala
Ketil will turn the once agricultural land into an industrial site and
support the long-established industrial park in Kulim. This could
footprint the first 50MW AC solar panel farm that will be the largest in
Malaysia. (Source: The Edge Financial Daily)
Malaysian Bulk Carriers: On selling spree as dry bulk market
picks up. Malaysian Bulk Carriers (Maybulk), the country’s largest dry
bulk shipowner is said to be putting two more vessels up for sale.
According to industry sources, Maybulk is now in talks to sell Alam Padu,
a bulk carrier built in April 2005, and has a deadweight of 87,000
tonnes, and Alam Murni, which is a 2003-built, 53,000 deadweight tonnage
Supramax bulk barrier. Based on recent price tags, the two vessels could
fetch more than USD10m. (Source: The Edge Financial Daily)
Tanjung Offshore: On diversification mode. Oil and gas
service provider Tanjung Offshore is putting in place a diversification
strategy that will eventually see less reliance on its core oil and gas
business, whereby its revenue contribution to the group is expected to
reduce to 70% in the next five years. The balance 30% will come from the
proposed new venture into property construction, aerospace, transport and
education business. The company is in talks for partnerships in the
aerospace and education segments, including with UMW Holdings but nothing
has been firmed up yet. (Source: The Sun Daily)
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