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Ta Ann (TAH MK)
by Li Shin
Chai
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Share
Price:
|
MYR3.89
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Target
Price:
|
MYR5.00
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Recommendation:
|
Buy
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1Q16: Dragged by
higher cost
|
|
Ta Ann’s 1Q16 core net profit of MYR12m (-54% YoY, -74%
QoQ) was below expectation due to higher-than-expected cost of
production at both the timber and plantation divisions. We adjust our
cost estimates and reduce our 2016-18 EPS by 14-21%. We expect earnings
to play catch up in the following quarters on stronger FFB output in
2H. Maintain BUY with a lower MYR5.00 TP (-28%).
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
1,020.7
|
1,046.8
|
1,043.4
|
1,146.6
|
|
EBITDA
|
243.2
|
323.9
|
269.2
|
331.2
|
|
Core net profit
|
110.6
|
185.9
|
124.0
|
163.9
|
|
Core EPS (sen)
|
29.8
|
50.2
|
33.5
|
44.2
|
|
Core EPS growth (%)
|
82.6
|
68.1
|
(33.3)
|
32.1
|
|
Net DPS (sen)
|
20.0
|
20.0
|
15.1
|
19.9
|
|
Core P/E (x)
|
13.0
|
7.8
|
11.6
|
8.8
|
|
P/BV (x)
|
1.4
|
1.2
|
1.2
|
1.1
|
|
Net dividend yield (%)
|
5.1
|
5.1
|
3.9
|
5.1
|
|
ROAE (%)
|
10.7
|
16.6
|
10.2
|
12.7
|
|
ROAA (%)
|
6.0
|
9.6
|
6.2
|
7.8
|
|
EV/EBITDA (x)
|
6.9
|
6.3
|
6.0
|
4.7
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Net debt/equity (%)
|
18.7
|
12.3
|
10.0
|
6.2
|
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Share
Price:
|
MYR1.69
|
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Target
Price:
|
MYR2.45
|
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Recommendation:
|
Buy
|
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1Q16: In line
|
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1Q16 results were in line. With two sizeable job wins YTD,
its solid outstanding construction orderbook of MYR2.4b would lead to
strong earnings growth. Meanwhile, HSL is still vying for more
contracts to grow its orderbook further. Maintain our earnings forecasts
and BUY call with an unchanged TP of MYR2.45 based on 12.5x 2017 EPS
(mean valuations).
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
604.7
|
654.7
|
711.6
|
970.7
|
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EBITDA
|
109.4
|
109.2
|
116.7
|
152.0
|
|
Core net profit
|
76.9
|
76.2
|
81.0
|
108.0
|
|
Core EPS (sen)
|
14.0
|
13.9
|
14.7
|
19.6
|
|
Core EPS growth (%)
|
(9.2)
|
(0.9)
|
6.1
|
33.4
|
|
Net DPS (sen)
|
2.8
|
2.4
|
2.2
|
2.9
|
|
Core P/E (x)
|
12.1
|
12.2
|
11.5
|
8.6
|
|
P/BV (x)
|
1.6
|
1.4
|
1.3
|
1.1
|
|
Net dividend yield (%)
|
1.7
|
1.4
|
1.3
|
1.7
|
|
ROAE (%)
|
13.6
|
12.2
|
11.7
|
14.0
|
|
ROAA (%)
|
9.7
|
9.4
|
9.4
|
11.0
|
|
EV/EBITDA (x)
|
7.1
|
8.6
|
7.0
|
5.3
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
|
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Share
Price:
|
MYR2.80
|
|
Target
Price:
|
MYR2.20
|
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Recommendation:
|
Sell
|
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Troubled retail
business; D/G to SELL
|
|
1Q16 net profit was below expectations. YoY earnings were
dragged down by the Retail segment’s thinner profit margin but partly
offset by the Property Management Services segment’s growth. We cut our
FY16-18 earnings forecasts by 23-25% and consequently lower TP by 20sen
to MYR2.20 pegged to 22.5x FY17 PER (from 20.5x FY16 PER). Downgrade to
SELL (from HOLD) in view of a challenging near-term outlook.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
3,705.5
|
3,834.6
|
4,024.3
|
4,174.7
|
|
EBITDA
|
485.6
|
443.9
|
460.4
|
480.1
|
|
Core net profit
|
197.7
|
133.4
|
122.1
|
136.5
|
|
Core EPS (sen)
|
14.1
|
9.5
|
8.7
|
9.7
|
|
Core EPS growth (%)
|
(14.4)
|
(32.5)
|
(8.5)
|
11.8
|
|
Net DPS (sen)
|
5.0
|
4.0
|
3.0
|
3.4
|
|
Core P/E (x)
|
19.9
|
29.5
|
32.2
|
28.8
|
|
P/BV (x)
|
2.2
|
2.1
|
2.1
|
2.0
|
|
Net dividend yield (%)
|
1.8
|
1.4
|
1.1
|
1.2
|
|
ROAE (%)
|
11.6
|
7.4
|
6.5
|
7.0
|
|
ROAA (%)
|
6.2
|
3.6
|
3.0
|
3.3
|
|
EV/EBITDA (x)
|
9.3
|
9.9
|
9.6
|
9.0
|
|
Net debt/equity (%)
|
3.4
|
30.3
|
25.0
|
18.6
|
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|
Share
Price:
|
MYR2.73
|
|
Target
Price:
|
MYR3.20
|
|
Recommendation:
|
Buy
|
|
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|
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|
|
Set your eyes
ahead
|
|
We believe that earnings have bottomed in 3QFY16 and
should pick up in 4QFY16 on (i) higher RF shipment approaching a major
smartphone launch in Sep 2016 and (ii) potential reversal of forex
losses due to a weaker MYR. Alongside RF, stronger contribution from
the other divisions (i.e. ISK, ISL, IIS) would take Inari back to a
growth trajectory. With positive long-term prospects riding on higher
adoption of 3G/LTE/LTE-A, we reiterate BUY on Inari MYR3.20 TP
unchanged (15x CY17 EPS).
|
|
|
|
|
|
|
FYE Jun (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
793.7
|
933.1
|
1,077.9
|
1,341.4
|
|
EBITDA
|
134.8
|
187.3
|
199.5
|
274.5
|
|
Core net profit
|
102.8
|
151.5
|
146.3
|
193.0
|
|
Core EPS (sen)
|
11.3
|
16.3
|
15.1
|
19.9
|
|
Core EPS growth (%)
|
138.9
|
43.9
|
(7.6)
|
31.9
|
|
Net DPS (sen)
|
6.8
|
8.9
|
7.5
|
8.9
|
|
Core P/E (x)
|
24.1
|
16.8
|
18.1
|
13.7
|
|
P/BV (x)
|
9.6
|
4.7
|
4.3
|
3.7
|
|
Net dividend yield (%)
|
2.5
|
3.3
|
2.8
|
3.3
|
|
ROAE (%)
|
49.4
|
38.1
|
25.4
|
29.0
|
|
ROAA (%)
|
23.6
|
22.7
|
16.4
|
19.0
|
|
EV/EBITDA (x)
|
15.6
|
11.9
|
12.7
|
9.5
|
|
Net debt/equity (%)
|
6.7
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR4.23
|
|
Target
Price:
|
MYR4.60
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
Starting the
year right
|
|
1Q16 results were in line. Recovery in patient figures and
higher occupancy rates at its Malaysian and Indonesian hospitals
continue to support growth in earnings. However, increasing interest
cost and losses from the Australian aged-care business could present
downside risk to earnings. Maintain HOLD with an unchanged TP of
MYR4.60.
|
|
|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
2,639.1
|
2,818.5
|
3,119.6
|
3,499.5
|
|
EBITDA
|
297.9
|
350.9
|
381.4
|
428.9
|
|
Core net profit
|
125.1
|
144.6
|
149.1
|
167.4
|
|
Core EPS (sen)
|
12.3
|
13.9
|
14.4
|
16.1
|
|
Core EPS growth (%)
|
20.5
|
13.3
|
3.1
|
12.2
|
|
Net DPS (sen)
|
7.5
|
5.3
|
7.2
|
8.1
|
|
Core P/E (x)
|
34.4
|
30.3
|
29.4
|
26.2
|
|
P/BV (x)
|
3.4
|
3.0
|
2.9
|
2.7
|
|
Net dividend yield (%)
|
1.8
|
1.2
|
1.7
|
1.9
|
|
ROAE (%)
|
10.7
|
10.7
|
10.0
|
10.7
|
|
ROAA (%)
|
4.1
|
4.0
|
3.7
|
4.0
|
|
EV/EBITDA (x)
|
16.1
|
16.0
|
14.9
|
13.4
|
|
Net debt/equity (%)
|
75.1
|
77.5
|
77.4
|
76.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR0.26
|
|
Target
Price:
|
MYR0.27
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
Seeking charters
|
|
1Q16 core earnings (+52% YoY) account for 26% of our
full-year forecast. Marine vessel and 49%-owned FPSO operations were
the key drivers to earnings, offsetting weaker performance at drilling
and MOPU operations. The business outlook remains challenging but
almost all the operating/ financial negatives/ challenges have been priced
in. Securing new charters for its off-hire assets (i.e. MOPU and E3
barge) are short-term catalysts. Until then, Perisai remains a HOLD
with a MYR0.27 TP.
|
|
|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
122.1
|
214.8
|
216.8
|
216.8
|
|
EBITDA
|
50.7
|
82.7
|
103.9
|
103.9
|
|
Core net profit
|
11.8
|
3.2
|
29.7
|
34.4
|
|
Core EPS (sen)
|
1.0
|
0.3
|
2.5
|
2.9
|
|
Core EPS growth (%)
|
(84.1)
|
(73.6)
|
839.1
|
15.7
|
|
Net DPS (sen)
|
0.0
|
0.0
|
0.0
|
0.0
|
|
Core P/E (x)
|
25.4
|
96.3
|
10.3
|
8.9
|
|
P/BV (x)
|
0.3
|
0.4
|
0.4
|
0.4
|
|
Net dividend yield (%)
|
0.0
|
0.0
|
0.0
|
0.0
|
|
ROAE (%)
|
1.1
|
0.3
|
4.2
|
4.4
|
|
ROAA (%)
|
0.6
|
0.1
|
1.3
|
1.5
|
|
EV/EBITDA (x)
|
33.9
|
21.8
|
16.5
|
15.8
|
|
Net debt/equity (%)
|
90.9
|
192.4
|
164.3
|
141.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR5.02
|
|
Target
Price:
|
MYR4.70
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
Rising sugar
costs
|
|
1Q16 results came in below expectations on
higher-than-expected raw sugar costs and operating expenses.
Positively, the government’s cessation of sugar imported through
approved permits (starting Apr 2016) could help cushion bottom-line on
the clawback of volumes. We have revised our FY16/17/18 earnings
forecasts by –9%/-7%/-3%..
|
|
|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
2,281.5
|
2,307.3
|
2,383.1
|
2,443.4
|
|
EBITDA
|
383.4
|
384.1
|
398.5
|
470.4
|
|
Core net profit
|
257.0
|
271.1
|
241.8
|
235.2
|
|
Core EPS (sen)
|
36.6
|
38.6
|
34.4
|
33.5
|
|
Core EPS growth (%)
|
1.5
|
5.5
|
(10.8)
|
(2.7)
|
|
Net DPS (sen)
|
24.0
|
26.0
|
20.6
|
20.1
|
|
Core P/E (x)
|
13.7
|
13.0
|
14.6
|
15.0
|
|
P/BV (x)
|
1.8
|
1.7
|
1.7
|
1.6
|
|
Net dividend yield (%)
|
4.8
|
5.2
|
4.1
|
4.0
|
|
ROAE (%)
|
13.5
|
13.6
|
11.6
|
10.8
|
|
ROAA (%)
|
11.0
|
10.3
|
8.1
|
6.7
|
|
EV/EBITDA (x)
|
9.6
|
9.9
|
10.7
|
9.8
|
|
Net debt/equity (%)
|
10.4
|
14.9
|
33.6
|
48.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACRO RESEARCH
|
|
|
|
|
|
|
|
Economics Research
by
Suhaimi Ilias
|
|
|
|
|
|
|
New Governor,
same policy…
|
|
|
|
|
|
|
As we expected, BNM kept the Overnight Policy Rate
(OPR) and the Statutory Reserve Requirement (SRR) ratio unchanged at
3.25% and 3.50% respectively. Maintain our OPR forecast range of
3.00%-3.25% this year, which implies possibility of OPR cut in the
next quarter.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technical Research
by Lee
Cheng Hooi
|
|
|
|
|
|
|
A mixed and
sluggish tone
|
|
|
|
|
|
|
The FBMKLCI fell by 1.96 points to close at 1,633.76
yesterday, while the FBMEMAS and FBM100 gained 5.78 and 6.13 points
respectively. In terms of market breadth, the gainer-to-loser ratio
was 356-to-415, while 376 counters were unchanged. A total of 1.39b
shares were traded valued at MYR1.80b.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEWS
|
|
|
Outside Malaysia:
G-7: Gathering kicks off with competing views on boosting
growth. Finance chiefs from the Group of Seven advanced economies
arriving for meetings in Japan, sent mixed signals on how best to boost
flagging global growth. While the host nation looks to favor an agenda
that includes more fiscal stimulus to spur demand, a tonic that’s
strongly supported by Canada, not everyone signaled a willingness to
spend more. Germany’s finance minister Wolfgang Schaeuble, who has
previously pushed back against calls for new spending, said the G-7
meeting in Sendai, northern Japan, will cover different options for
different economies. (Source: Bloomberg)
U.S: April leading economic indicator index widened to
123.9 vs 123.1 prior month. Six-month annualized LEI change rose 1.1%
(Source: Bloomberg)
U.S: Jobless claims dropped last week from a one-year
high. Applications dropped by 16,000 in the week ended May 14, the
biggest decrease since early February, to 278,000, a Labor Department
report showed. The decrease was primarily due to fewer filings in New
York after a surge the previous week that probably reflected difficulties
adjusting for the spring break holiday. A subdued rate of dismissals,
along with steady hiring, shows companies have confidence in the demand
outlook. (Source: Bloomberg)
Philippines: GDP grew faster than most other nations in
Asia in the first quarter, spurred by spending ahead of the May
elections. GDP increased 6.9% YoY in the three months through March, the
highest in almost three years, the Philippine Statistics Authority said.
(Source: Bloomberg)
Australia: Added jobs in April and the unemployment rate
held at a 2 1/2 year low as the number of people in part-time roles
increased. Unemployment was unchanged at 5.7%, employment rose 10,800
from March and participation rate a measure of labor force as a share of
the population dropped to 64.8%. The report signals that record-low
interest rates are aiding a revival in industries like construction,
tourism and education that’s helping soak up unemployed workers as a
resource boom winds down. (Source: Bloomberg)
|
|
|
|
|
|
|
Other news:
IOI Corporation: IOI Corp’s USD25m acquisition of 50%
stake in LCK Nutrition off. IOI Corp, LC Group BV, LCK Nutrition and
Denny Foods Ltd have mutually agreed to terminate the agreement entered
into in June last year with immediate effect. No reason was given. Under
the proposed deal, IOI Corp’s wholly-owned subsidiary Loders Croklaan
Group BV was to subscribe to a 50% stake in LCK Nutrition for USD25m. In
return, Loders Croklaan was to transfer its Betapol business to LCK.
(Source: The Edge Financial Daily)
UMW Holdings: Eyes more Rolls-Royce deals. UMW Holdings,
which is working on delivering aero engine fan cases under its 25-year
Rolls-Royce deal inked last year, is confident it stands a good chance of
winning more outsourcing works from Rolls-Royce Holdings plc for aircraft
engine parts in the future, if it meets its current contractual
obligations. The company has allocated MYR750m as capital expenditure
over the next three specifically for this aerospace business, and that
training of talent will start by August, with manufacturing expected to
begin by the fourth quarter of 2017. (Source: The Edge Financial Daily)
UEM Sunrise: Launches Melia Residence Phase 3. UEM Sunrise
(UEMS) officially launched Phase 3 of its Melia Residences yesterday,
backed by the full take-up of Phase 1 and 2. A total of 206 Phase 1 and
Phase 2 units have been completely taken-up within the first two days of
its launch. UEMS has achieved a total of approximately MYR206m in sales
from its Melia Residences, exceeding their target of MYR196m for 2016
despite soft property market conditions in Johor. (Source: The Edge
Financial Daily)
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