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Share
Price:
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MYR3.20
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Target
Price:
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MYR3.86
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Recommendation:
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Buy
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Stronger
earnings ahead
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SPSB’s 1Q16 results were in line. We expect earnings to
pick up strongly in 4Q16 on the completion of Parque Melbourne
(Australia) and Battersea Power Station phase 1 (BPS1; London) projects
which should see lumpy recognition. Property sales should also pick up
strongly in 2H16 supported by MYR4.7b worth of new launches. We
maintain our earnings forecasts, MYR3.86 RNAV-TP. Reiterate BUY.
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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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3,810.1
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6,746.3
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5,319.9
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6,456.7
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EBITDA
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1,107.6
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2,063.3
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1,170.4
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1,420.5
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Core net profit
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376.0
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918.3
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659.7
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940.6
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Core EPS (sen)
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14.9
|
35.7
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24.9
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35.5
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Core EPS growth (%)
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(17.2)
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140.1
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(30.2)
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42.6
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Net DPS (sen)
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9.7
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23.0
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14.9
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21.3
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Core P/E (x)
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21.5
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9.0
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12.9
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9.0
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P/BV (x)
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1.0
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0.9
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0.8
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0.8
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Net dividend yield (%)
|
3.0
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7.2
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4.7
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6.7
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ROAE (%)
|
6.6
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13.9
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8.8
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12.0
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ROAA (%)
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2.9
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6.2
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3.8
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5.1
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EV/EBITDA (x)
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10.1
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4.9
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9.0
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7.4
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Net debt/equity (%)
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32.5
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19.5
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21.5
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20.5
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Share
Price:
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MYR1.42
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Target
Price:
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MYR1.48
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Recommendation:
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Hold
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1Q16: Below
expectations
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1Q16 net profit was below expectations due to reallocation
of ad spend away from its print segment (New Straits Times Press)
coupled with higher-than-expected newsprint cost. That said, consumer
sentiment has showed signs of improvement. This augurs well for adex
sentiment, which we believe will be further boosted by major sporting
events scheduled in mid-2016. Maintain earnings estimates, HOLD call
and MYR1.48 TP (based on 1.3x end-FY16 P/BV) for now.
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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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1,507.0
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1,427.7
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1,464.8
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1,526.5
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EBITDA
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310.8
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325.8
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313.5
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324.0
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Core net profit
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141.6
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138.7
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143.0
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156.4
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Core FDEPS (sen)
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12.6
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12.5
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12.8
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14.0
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Core FDEPS growth(%)
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(34.2)
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(0.9)
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2.5
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9.4
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Net DPS (sen)
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11.0
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10.0
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11.0
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12.0
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Core FD P/E (x)
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11.3
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11.4
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11.1
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10.1
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P/BV (x)
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1.0
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1.0
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1.0
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0.9
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Net dividend yield (%)
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7.7
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7.0
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7.7
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8.5
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ROAE (%)
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8.7
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8.6
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8.8
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9.5
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ROAA (%)
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5.6
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5.8
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6.1
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7.0
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EV/EBITDA (x)
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6.0
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4.0
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4.6
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4.3
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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
|
net cash
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Samuel Yin Shao
Yang
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Jade Tam
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Share
Price:
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MYR3.50
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Target
Price:
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MYR3.60
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Recommendation:
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Hold
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Sizeable KVMRT 2
win
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IJM clinched a KVMRT 2 elevated viaduct package worth
MYR1.47b, lifting its outstanding orderbook by 21% to MYR8.4b. Although
IJM would likely exceed our MYR2b job win estimate in FY3/17, the
earnings upside could be offset by lower property sales. Hence, our
earnings forecasts are unchanged, as is our SOP-TP of MYR3.60. Maintain
HOLD; the stock is fairly valued.
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FYE Mar (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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6,006.5
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5,448.3
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6,259.6
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7,048.1
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EBITDA
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1,540.4
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1,440.9
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1,210.2
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1,302.9
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Core net profit
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539.0
|
536.3
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571.7
|
620.8
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Core EPS (sen)
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19.2
|
16.5
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16.0
|
17.4
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Core EPS growth (%)
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23.7
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(14.1)
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(2.9)
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8.6
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Net DPS (sen)
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12.5
|
7.5
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7.5
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7.5
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Core P/E (x)
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18.2
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21.2
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21.9
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20.1
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P/BV (x)
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1.5
|
1.4
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1.4
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1.4
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Net dividend yield (%)
|
3.6
|
2.1
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2.1
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2.1
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ROAE (%)
|
8.7
|
7.1
|
6.6
|
6.9
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ROAA (%)
|
3.2
|
2.8
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2.8
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3.0
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EV/EBITDA (x)
|
9.4
|
11.9
|
14.5
|
13.4
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Net debt/equity (%)
|
53.4
|
51.4
|
43.6
|
39.6
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Further slowing
in growth…
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Industrial production index (IPI) slowed in Mar 2016
to +2.8% YoY (Feb 2016: +3.9% YoY) but picked up in 1Q 2016 to +3.3%
YoY (4Q 2015: +2.9% Yoy). Index of services (IOS) growth was
relatively sustained at +4.7% YoY last quarter (4Q 2015: +4.8% YoY).
Palm oil-related production slumped amid sustained value of
construction works, pointing to lower agriculture and sustained
construction. We estimated 1Q 2016 real GDP growth of +4.1% YoY (4Q
2015: +4.5% YoY).
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Suhaimi Ilias
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Zamros
Dzulkafli
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Economics Research
by
Suhaimi Ilias
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Unemployment rate rose to 3.5% in Mar 2016 from 3.4%
in Feb 2016, the highest since Nov 2013. Seasonally-adjusted rate
rose 0.3% percentage points to 3.5% (Feb 2016: 3.2%). We expect
unemployment rate to average 3.5% in 2016 (1Q 2016: 3.4%; 2015:
3.2%).
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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 between
1,655 and 1,671
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The FBMKLCI rose by 4.40 points to close at 1,648.98
yesterday, while the FBMEMAS and FBM100 gained 24.13 and 22.82 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 448-to-395, while 346 counters were unchanged. A total of 2.05b
shares were traded valued at MYR1.81b.
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NEWS
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Outside Malaysia:
U.S: Mortgage rates for 30-year loans fall to lowest since
2013 as a disappointing jobs report helped drive investors to the safety
of the government bonds that guide loan costs. The average rate for a
30-year fixed mortgage was 3.57%, down from 3.61% last week and the
lowest since May 2013, Freddie Mac said in a statement. (Source:
Bloomberg)
Brazil: Acting President Temer names cabinet on Rousseff
exit, pledging to improve investment conditions and protect welfare
programs in a bid to pull Latin America’s largest economy out of a
crushing recession. (Source: Bloomberg)
E.U: Industrial production in the euro area ended the
first quarter with a second monthly drop, weakened by falling output in
consumer goods and capital goods. Output declined 0.8% in March from
February, the Eurostat statistics office said. The reading follows
disappointing data this week from Germany, France and Italy, the region’s
three biggest economies. From a year earlier, production rose 0.2% YoY.
The monthly drop halts a strong start to 2016 after production in January
jumped the most in more than 12 years, and suggests that the euro area
lost momentum toward the end of the quarter. (Source: Bloomberg)
China: Soured loans at commercial banks rose to the
highest level in 11 years as defaults spread from small private firms to
large state-owned enterprises in a weakening economy. Nonperforming loans
rose 9% to CNY 1.39t (USD 214b) in March from December, the fastest
increase in three quarters, data from the China Banking Regulatory Commission
showed. Including “special-mention” loans, those where future repayment
is at risk but that are yet to become nonperforming, the amount swelled
to CNY 4.6t, representing 5.76% of total advances. (Source: Bloomberg)
Crude oil: Heads for weekly gain on U.S. output cuts,
Nigeria outages. Nigeria said militant attacks have cut output by as much
as 600,000 barrels a day and U.S. production has slid for a ninth week.
Companies in Canada plan to restart operations at some oil-sands sites
after wildfires shut production. Iran’s crude output has returned to
pre-sanctions levels, the International Energy Agency said. Brent for
July settlement climbed 48 cents to settle at USD 48.08 a barrel on the
London-based ICE Futures Europe exchange. The global benchmark crude
closed at a 63-cent premium to July WTI. (Source: Bloomberg)
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Malaysia:
Kerjaya Prospek: Eyes MYR600m order book target with Johor
win. It has won a MYR312.9m construction job for a high-rise residential
in Iskandar Malaysia, Johor. It is still tendering for about MYR1.5b
worth of projects in Klang Valley and Penang which the results will be
announced in the next five or six months. It shared that the winning rate
is about 20% to 30%. (Source: The Edge Financial Daily)
Axiata: edotco to build up to 2,000 towers this year. It
aims to build 1,000 to 2,000 towers across Malaysia, Sri Lanka,
Bangladesh, Cambodia, Pakistan and Myanmar this year. As a recap, the
regional tower services provider is a wholly owned subsidiary of Axiata
Group Bhd, with over 16,000 towers in the six countries. In Malaysia, it
has over 3,600 sites nationwide. (Source: The Sun Daily)
RHBCap: Eyes M&A opportunities in Indonesia. It has
investment bank, asset management and so potentially the big piece
missing is commercial banking, said RHBCap. However, it has yet to find a
M&A candidate. As a recap, securities and asset management business
in Indonesia made profits of about MYR5m last year. (Source: The Edge
Financial Daily)
UEM Edgenta: Eyes private hospital deals. It is eyeing
hospital support services (HSS) contracts from private hospitals in the
country to soften the impact of lower contribution from its Sabah and
Sarawak businesses to earnings this year. To recap, the company reduced
its ownership in One Medicare Sdn Bhd and Sedafiat Sdn Bhd to 40% from
full ownership previously, under a new concession agreement with the
government for the provision of HSS at public hospitals in the states.
CEO Azmir Merican said the company’s profit before tax and revenue is
expected to decline MYR45m and MYR280m respectively in the FYE Dec 31,
2016. (Source: The Sun Daily)
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