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Share
Price:
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MYR1.59
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Target
Price:
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MYR2.00
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Recommendation:
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Buy
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Risk-reward
opportunities improving
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| The recent share price correction following Seadrill’s
exit from SAKP is an opportunity to accumulate and trade on valuations
(oversold, undervalued), beta and potential catalysts. Unlocking and
monetising its gas reserve is high on SAKP’s agenda, a major catalyst
not factored in by the market yet. Our unchanged SOP-based TP offers a
26% upside. |
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FYE Jan (MYR m)
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FY15A
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FY16A
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FY17E
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FY18E
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Revenue
|
9,943.0
|
10,184.0
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9,756.8
|
10,367.9
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EBITDA
|
3,120.5
|
3,088.6
|
3,017.0
|
3,071.5
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Core net profit
|
1,216.7
|
1,009.4
|
840.7
|
942.7
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Core EPS (sen)
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20.3
|
16.9
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14.1
|
15.8
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Core EPS growth (%)
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13.6
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(16.8)
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(16.7)
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12.1
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Net DPS (sen)
|
4.3
|
1.4
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0.0
|
0.0
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Core P/E (x)
|
7.8
|
9.4
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11.3
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10.1
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P/BV (x)
|
0.8
|
0.8
|
0.7
|
0.7
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Net dividend yield (%)
|
2.7
|
0.8
|
0.0
|
0.0
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ROAE (%)
|
11.0
|
8.3
|
6.7
|
7.0
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ROAA (%)
|
4.0
|
2.8
|
2.3
|
2.6
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EV/EBITDA (x)
|
10.2
|
8.9
|
8.2
|
7.6
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Net debt/equity (%)
|
131.0
|
134.2
|
117.5
|
99.6
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Share
Price:
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MYR1.88
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Target
Price:
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MYR2.35
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Recommendation:
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Buy
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Starbucks leads
the way
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| We recently hosted BFood for a two-day non-deal roadshow
(NDR) in Hong Kong. Management was represented by Dato’ Francis Lee
(CEO) and he met with 12 funds. We remain positive on BFood’s outlook
which largely premised on Berjaya Starbucks’ growth potential. We trim
our profit forecasts by <2% p.a. and nudged down TP by 5sen to
MYR2.35 after adjusting our assumptions (pegged to 22.5x CY17 PER at
-0.5SD). |
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FYE Apr (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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150.4
|
376.8
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546.6
|
613.8
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EBITDA
|
14.6
|
213.7
|
70.4
|
84.6
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Core net profit
|
22.7
|
25.7
|
27.6
|
35.0
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Core FDEPS (sen)
|
7.0
|
6.8
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7.3
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9.2
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Core FDEPS growth(%)
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18.8
|
(2.4)
|
7.5
|
26.5
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Net DPS (sen)
|
3.2
|
4.3
|
2.8
|
3.5
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Core FD P/E (x)
|
27.0
|
27.7
|
25.8
|
20.4
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P/BV (x)
|
3.1
|
1.8
|
1.7
|
1.7
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Net dividend yield (%)
|
1.7
|
2.3
|
1.5
|
1.9
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ROAE (%)
|
14.9
|
9.2
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6.9
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8.4
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ROAA (%)
|
12.6
|
5.7
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3.7
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4.6
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EV/EBITDA (x)
|
26.2
|
5.1
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12.1
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10.1
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Net debt/equity (%)
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net cash
|
39.1
|
38.6
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36.0
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Share
Price:
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MYR1.44
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Target
Price:
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MYR1.33
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Recommendation:
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Sell
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Potentially in
the red
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| FGV’s 1Q16 results will likely disappoint at near
breakeven level. And, there is a small probability that it could slip
into the red if its plantation cost of production turns out to be
higher than expected or sugar contribution is weaker than expected following
recent increase in raw material cost. We are keeping our earnings
forecasts for now. Maintain SELL with an unchanged TP of MYR1.33 on 1x
trailing PNTA. |
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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
|
16,434.3
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15,669.7
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15,737.5
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16,369.9
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EBITDA
|
1,293.9
|
957.4
|
990.7
|
1,194.2
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Core net profit
|
95.7
|
(171.8)
|
141.4
|
252.2
|
Core EPS (sen)
|
2.6
|
(4.7)
|
3.9
|
6.9
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Core EPS growth (%)
|
545.6
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nm
|
nm
|
78.3
|
Net DPS (sen)
|
10.0
|
4.0
|
2.3
|
4.1
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Core P/E (x)
|
54.9
|
(30.6)
|
37.2
|
20.8
|
P/BV (x)
|
0.8
|
0.8
|
0.8
|
0.8
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Net dividend yield (%)
|
6.9
|
2.8
|
1.6
|
2.9
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ROAE (%)
|
1.5
|
(2.7)
|
2.2
|
3.8
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ROAA (%)
|
0.5
|
(0.8)
|
0.7
|
1.2
|
EV/EBITDA (x)
|
9.0
|
12.4
|
11.3
|
9.7
|
Net debt/equity (%)
|
18.8
|
47.8
|
50.2
|
53.2
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MACRO RESEARCH
|
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Technical Research
by Lee
Cheng Hooi
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Sell into the
price rebounds
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The FBMKLCI rebounded 6.14 points to close at 1,657.58
yesterday, while the FBMEMAS and FBM100 rose 49.72 and 47.61 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 484-to-341, while 356 counters were unchanged. A total of 1.67b
shares were traded valued at MYR2.13b. |
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NEWS
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Outside Malaysia:
U.S: Productivity decreases for a second straight quarter
and employer costs for labor climbed by the most in more than a year. The
measure of employee output per hour fell at a 1% annualized rate from
January through March after a 1.7% decline in the fourth quarter. Labor
costs jumped 4.1%, more than forecast. Employers have steadily beefed up
headcounts to meet demand even as growth softened the past two quarters.
At the same time, they’ve been hesitant to ramp up investments in
efficiency- boosting equipment, meaning productivity will likely continue
to languish. (Source: Bloomberg)
U.S: Service industries gauge climbs to four-month high in
April, signaling the economy is firming up after a weak start to the
year. The Institute for Supply Management’s non-manufacturing index rose
to 55.7 from 54.5 in March, the Tempe, Arizona-based group’s data showed.
Readings above 50 signal growth. The improvement shows service producers,
which account for almost 90% of the economy, gained some traction
following the slowest quarterly growth pace in two years. Industries
including retailers, builders and health-care providers have been less
vulnerable to weakness overseas that’s kept pressure on U.S. factories.
(Source: Bloomberg)
E.U: Economy starts quarter in a ‘low gear,’ Markit says.
European Central Bank policy is helping to sustain growth in the euro
area economy, though the pace is “tepid” and inflation remains too low,
according to Markit Economics. Markit said its composite Purchasing
Managers Index was at 53 in April -- above the 50 level that divides
expansion from contraction. A services gauge was at 53.1, with business
confidence rising to a three-month high and growth in new orders
accelerating. The report suggests the 19-nation economy grew at an annual
pace of 1.5% at the start of the second quarter. (Source: Bloomberg) |
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Other News:
Construction: LRT 3 project starts this month, 96
companies shortlisted for packages worth MYR9b. A total of 44 companies
have been shortlisted to build the 37km rail infrastructure that
comprises stations, viaducts, as well as park and ride facilities. There
are two segments, 22 companies have been shortlisted to bid for the large
infrastructure jobs that would be awarded on a competitive basis and
another 22 companies were shortlisted on a restricted tender basis among
majority bumiputera-owned companies. Also, 8 companies have been
shortlisted for the tunneling portion spanning across two kilometres.
(Source: The Star)
TH Heavy Engineering: TH Heavy not in talks to sell assets
to MISC. Both TH Heavy Engineering (THHE) and MISC are not in talks over
disposal of THHE’s floating production and fabrication businesses nor its
fabrication yard in Pulau Indah, Selangor. Both companies were responding
to news reports that MISC was in talks to acquire THHE. (Source: The Edge
Financial Daily)
DiGi.Com: Priority to lure more subscribers. The priority
of DiGi.com (DiGi) – whose blended subscriber base has ballooned to
12.34m, exceeding its rival Maxis that serves 10.89m users as at Mar 31,
2016 – now is to offer flexible products for customers to spend according
to their needs. DiGi has always wanted to provide a lower entry point for
customers and hence introduced its Internet-sharing feature yesterday,
which allows customers to customize the allocation of their Internet
quota among a principle line and up to six of its supplementary lines.
(Source: The Edge Financial Daily) |
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