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Share
Price:
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MYR1.60
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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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New gas
discoveries at SK408
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The new gas discoveries from SK408 field are sizeable
(3tcf) and will lift SAKP’s reserves portfolio by 50% - a major
positive. Unlocking and monetising its gas reserves via the signing of
GSA soon is a re-rating catalyst, not factored in by the market yet. We
maintain our earnings estimates for now. Reiterate BUY with an
unchanged MYR2.00 SOP-TP.
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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
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9,943.0
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10,184.0
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9,756.8
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10,367.9
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EBITDA
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3,120.5
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3,088.6
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3,017.0
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3,071.5
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Core net profit
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1,216.7
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1,009.4
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840.7
|
942.7
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Core EPS (sen)
|
20.3
|
16.9
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14.1
|
15.8
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Core EPS growth (%)
|
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)
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4.3
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1.4
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0.0
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0.0
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Core P/E (x)
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7.9
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9.5
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11.4
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10.1
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P/BV (x)
|
0.8
|
0.8
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0.7
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0.7
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Net dividend yield (%)
|
2.7
|
0.8
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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
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8.2
|
7.6
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Net debt/equity (%)
|
131.0
|
134.2
|
117.5
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99.6
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Share
Price:
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MYR0.65
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Target
Price:
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MYR1.05
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Recommendation:
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Buy
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1Q16 results a
miss
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1Q16 results came in below, at 12% of our/consensus’
initial FY forecasts, prompting a 3-30% cut in our 2016-18 earnings.
Despite the downgrades, BArmada’s investment angle is on the execution
of the 4 new projects from 4Q16, potential compensation on Armada
Claire and a valuation perspective. Our unchanged TP is SOP-based. Any
share price weakness following the 1Q16 results is an opportunity to
accumulate.
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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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2,397.3
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2,179.7
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1,509.8
|
2,669.9
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EBITDA
|
1,029.4
|
1,101.7
|
1,072.0
|
1,529.0
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Core net profit
|
399.6
|
360.7
|
215.4
|
590.8
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Core EPS (sen)
|
7.9
|
6.1
|
3.7
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10.1
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Core EPS growth (%)
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(48.4)
|
(22.2)
|
(40.3)
|
174.3
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Net DPS (sen)
|
1.6
|
0.8
|
0.0
|
0.0
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Core P/E (x)
|
8.2
|
10.6
|
17.7
|
6.5
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P/BV (x)
|
0.5
|
0.5
|
0.5
|
0.5
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Net dividend yield (%)
|
2.5
|
1.3
|
0.0
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0.0
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ROAE (%)
|
7.2
|
5.2
|
2.9
|
7.6
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ROAA (%)
|
3.4
|
2.2
|
1.2
|
3.0
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EV/EBITDA (x)
|
8.2
|
11.4
|
10.2
|
6.7
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Net debt/equity (%)
|
43.2
|
89.6
|
95.4
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80.0
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Share
Price:
|
MYR0.88
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Target
Price:
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MYR1.16
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Recommendation:
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Buy
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Secures charter
for Naga 6
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Clinching a rig contract from PETRONAS Carigali Sdn Bhd
(PCSB) in current weak conditions is a major feat. While the contract
may not be enough to pull UMWOG out from the red, UMWOG will remain
cashflow positive. Optimising rigs utilisation over DCR is a key
priority for 2016-17. We take the view that much of the tough operating
and financial outlook over the next 12 months has been reflected in the
share price (-56% since a year ago). Hence, our contrarian Trading BUY
call.
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FYE Dec (MYR m)
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FY14A
|
FY15A
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FY16E
|
FY17E
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Revenue
|
1,014.9
|
839.9
|
576.5
|
675.4
|
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EBITDA
|
410.8
|
(64.2)
|
(14.5)
|
48.2
|
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Core net profit
|
251.8
|
(7.5)
|
(277.8)
|
(215.1)
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Core EPS (sen)
|
11.6
|
(0.3)
|
(12.8)
|
(9.9)
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Core EPS growth (%)
|
51.4
|
nm
|
nm
|
nm
|
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Net DPS (sen)
|
100.0
|
0.0
|
0.0
|
0.0
|
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Core P/E (x)
|
7.5
|
(252.2)
|
(6.8)
|
(8.8)
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P/BV (x)
|
0.6
|
0.6
|
0.6
|
0.7
|
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Net dividend yield (%)
|
114.3
|
0.0
|
0.0
|
0.0
|
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ROAE (%)
|
8.3
|
(0.2)
|
(8.7)
|
(7.3)
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ROAA (%)
|
5.2
|
(0.1)
|
(3.8)
|
(3.2)
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EV/EBITDA (x)
|
15.0
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nm
|
nm
|
104.5
|
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Net debt/equity (%)
|
33.7
|
90.9
|
100.1
|
110.3
|
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Share
Price:
|
MYR7.37
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Target
Price:
|
MYR7.20
|
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Recommendation:
|
Hold
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Forex reversal
kicks in
|
|
1Q16 core net profit was in line with our expectation,
although possibly below consensus as forex losses kicked in.
Nevertheless, the anticipation of a special dividend (following TDC’s
recent disposal of its remaining Digi shares) would likely help sustain
current valuations, in our view. HOLD rating maintained, based on an
unchanged 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
|
|
Core EPS (sen)
|
22.2
|
29.8
|
27.9
|
33.0
|
|
Core EPS growth (%)
|
(51.1)
|
34.1
|
(6.4)
|
18.2
|
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Net DPS (sen)
|
5.6
|
80.2
|
7.1
|
8.2
|
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Core P/E (x)
|
33.2
|
24.7
|
26.4
|
22.4
|
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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
|
14.1
|
11.9
|
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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SECTOR RESEARCH
|
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Sector Note
by
Desmond Ch'ng
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Deposits still
contracting
|
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Momentum continues to wane with no visible bottom just
yet, as loan growth continues to slow and system deposits continue to
contract. While overall banking system asset quality remains
relatively stable, the recent corporate results point to potential sporadic
asset quality issues on the corporate front. We remain vigilant and
NEUTRAL on the sector. BUY AFG, HL Bank and HLFG, SELL CIMB.
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MACRO RESEARCH
|
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Economics Research
by
Suhaimi Ilias
|
|
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|
|
Picked up but
still sluggish
|
|
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|
Money supply (M3) growth picked up but remained
sluggish (Apr 2016: +1.5% YoY; Mar 2016: +0.9% YoY) amid the fall in
total deposits and slower credit growth. The trend in money supply is
consistent with downward pressure on GDP.
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Suhaimi Ilias
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Zamros
Dzulkafli
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NEWS
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Outside Malaysia:
U.S: Consumer confidence in May unexpectedly falls to
six-month low amid concerns that jobs are more difficult to find, a
report from the New York- based Conference Board showed. Index fell to
92.6, the lowest since November, from a revised 94.7 in April. Measure of
consumer expectations for the next six months fell to 79, the lowest
since February 2014 from 79.7. (Source: Bloomberg)
E.U: Consumer prices failed to increase for a fourth
consecutive month, highlighting policy makers’ struggle to stoke inflation
despite multiple rounds of stimulus. Prices fell 0.1% YoY in May, the
European Union’s statistics office said. That follows a drop of minus
0.2% YoY in April. The unemployment rate held at 10.2% last month,
according to a separate Eurostat release. (Source: Bloomberg)
China: Job creation tops 2016 target. The nation created
4.43 million new jobs in the first four months of the year, hitting 44%
of the annual target of 10 million, Vice Minister Xin Changxing said in
an online interview, according to transcript posted on the central
government’s website. The nation’s burgeoning services sector has
absorbed workers from struggling factories as top leaders stress that
keeping employment stable is a primary priority. Challenges loom as
demand for labor is waning, especially in the construction, steel and
coal sectors -- the key areas where reductions to excess capacity are
targeted, Xin said. (Source: Bloomberg)
S. Korea: Industrial production fell more than expected as
weak exports and corporate restructuring of shipbuilders continue to hurt
demand and business sentiment. Factory output dropped 2.8% YoY in April,
Statistics Korea said. (Source: Bloomberg)
India: Growth surges more than estimated before rate
decision. India’s world-beating economic growth accelerated more than
estimated at the start of 2016, easing pressure on central bank Governor
Raghuram Rajan to lower borrowing costs when he reviews policy next week.
Gross domestic product grew 7.9% YoY in January-March, the Statistics
Ministry said in a statement. That was faster than the 7.2% YoY in the
previous quarter. (Source: Bloomberg)
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Other News:
Kerjaya Prospek: Bags two jobs worth MYR278m. Kerjaya
Prospek Group has clinched two construction contracts worth MYR278m,
pushing its order book secured this year alone to MYR875m. Kerjaya’s
outstanding order book stands at MYR2.64b.The company has bagged a
MYR172.43m contract to build an apartment for EcoWorld Development in
Kuala Langat, Selangor. The construction and completion of the main
building will take 25 months and work is scheduled to commence this month
and will run until July 2018. The company also received a MYR105.95m
contract from Kerjaya Prospek Property Sdn Bhd (KPPSB), for the main
building works of a proposed mixed development in Tanjung Pinang, Penang.
(Source: The Sun Daily)
Sunsuria: Plans ‘Little Korea’ for Putrajaya project.
Sunsuria is planning a “Little Korea” village for its Sunsuria City
development- its flagship project at Putrajaya South which it plans to
develop and launch by next year. The development, dubbed “Sunsuria
Povence Village”, will consist of a series of South Korean-themed
developments, including a boutique hotel, wedding house, serviced
apartments, cultural heritage retail shops and a themed garden. The
estimated GDV of the project is between MYR600m to MYR700m. (Source: The
Edge Financial Daily)
Mitrajaya: Bags MYR52.04m contract for road and drainage
works. Mitrajaya Holdings has won a contract for road and drainage works
in Petroliam Nasional’s refinery and petronchemical integrated
development (Rapid) for a sum of USD12.6m (MYR52.04m). Its wholly-owned
subsidiary Pembinaan Mitrajaya Sdn Bhd had accepted the award from Punj
Lloyd Sdn Bhd for the execution of road, drainage, culvert and duct bank
works in Rapid yesterday. Phase 1 work shall be completed within seven
months from May 31, 2016. Phase 2 work shall be completed within six
months from the effective date of Oct 2, 2017, with an expected
completion date of April 2, 2018. (Source: The Edge Financial Daily)
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