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Share
Price:
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MYR16.92
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Target
Price:
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MYR18.10
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Recommendation:
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Buy
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4QFY16 above
expectations
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| 12MFY6/16 results were above our expectations but the
full-year DPS was below our estimates. Factoring in higher revenue from
the recent price hike and better cost efficiencies, we raise FY17-18
earnings by 6% respectively and our DCF-TP is raised to MYR18.10 from
MYR17.50. Coupled with still decent dividend yields of ~5%, HEIM
remains a BUY. |
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FYE Jun (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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1,748.9
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1,848.0
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1,924.1
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1,993.6
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EBITDA
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337.1
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399.2
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400.7
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410.5
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Core net profit
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214.2
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265.7
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267.2
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275.4
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Core EPS (sen)
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70.9
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87.9
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88.4
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91.2
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Core EPS growth (%)
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8.1
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24.0
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0.6
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3.1
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Net DPS (sen)
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71.0
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85.0
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88.0
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91.5
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Core P/E (x)
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23.9
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19.2
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19.1
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18.6
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P/BV (x)
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13.6
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15.2
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11.6
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11.3
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Net dividend yield (%)
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4.2
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5.0
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5.2
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5.4
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ROAE (%)
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58.4
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74.5
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68.7
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61.7
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ROAA (%)
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30.7
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38.9
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37.1
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34.8
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EV/EBITDA (x)
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12.9
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11.6
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12.7
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12.4
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Net debt/equity (%)
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6.0
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15.0
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net cash
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net cash
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Share
Price:
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MYR4.25
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Target
Price:
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MYR4.30
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Recommendation:
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Hold
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Hapag-Lloyd
merges with UASC
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| The merger of Hapag-Lloyd and UASC adds uncertainties to
Westports’ outlook in 2017-18, especially with CMA CGM signalling its
intention to increasingly use PSA. However, we still see high
possibility of existing volume being retained at Westports given its
competitiveness. On a brighter note, Westports could surprise the
market with a strong 2Q16 volume growth of >10% YoY. Maintain
earnings forecasts, HOLD and DCF-derived TP of MYR4.30. |
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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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1,503.0
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1,578.3
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1,693.4
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1,770.3
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EBITDA
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800.8
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869.1
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940.1
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1,017.1
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Core net profit
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512.2
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504.9
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596.4
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628.2
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Core EPS (sen)
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15.0
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14.8
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17.5
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18.4
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Core EPS growth (%)
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17.7
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(1.4)
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18.1
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5.3
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Net DPS (sen)
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11.3
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11.1
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13.1
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13.8
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Core P/E (x)
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28.3
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28.7
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24.3
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23.1
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P/BV (x)
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8.2
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7.6
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7.1
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6.6
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Net dividend yield (%)
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2.6
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2.6
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3.1
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3.3
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ROAE (%)
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30.4
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27.6
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30.2
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29.6
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ROAA (%)
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13.8
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12.8
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14.3
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14.4
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EV/EBITDA (x)
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15.2
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17.0
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16.7
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15.4
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Net debt/equity (%)
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40.0
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39.7
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59.9
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53.0
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SECTOR RESEARCH
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The next big
thing is here!
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Perodua unveiled its first sedan model, the
EEV-certified Bezza. Priced competitively between MYR37-51k, this
model is expected to give Proton’s entry models (i.e. Saga, Iriz,
Persona) a run for their money. We raise CY16/17/18 sales forecasts
for Perodua to 225k/ 250k/240k units from 220k/217k/205k, lifting our
FY16/17/18 earnings forecasts for UMWH, MBM and Pecca by 1%-12%. MBM
is now a BUY with a higher TP of MYR2.70. Pecca/UMWH remain as
BUY/SELL with higher TPs of MYR1.95/4.65. |
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Continued
weakness pre-Brexit
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Sluggish global trade continued to hamper exports and
imports in June 2016 as both fell -3.6% YoY (May 2016: -2.2% YoY) and
-6.6% YoY (May 2016: -0.9% YoY) respectively. Trade surplus narrowed
for a second month to +SGD5.3b (May 2016: +SGD5.5b). Global economy
and world trade are expected to remain lackluster for the rest of the
year amid heightened downside risk post-Brexit. |
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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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The FBMKLCI rose by 2.44 points to close at 1,670.84
yesterday, while the FBMEMAS and the FBM100 gained 10.53 points and
7.03 points respectively. In terms of market breadth, the
gainer-to-loser ratio was 407-to-386, while 353 counters were
unchanged. A total of 1.70b shares were traded valued at MYR1.65b. |
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NEWS
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Outside Malaysia:
U.S: Confidence among homebuilders falls from five-month
high. Confidence among U.S. homebuilders declined in July, showing the
construction industry remains in a slow, if unspectacular, recovery as
the busiest part of the selling season comes to a close, according to
data from the National Association of Home Builders/Wells Fargo. Builder
sentiment gauge declined to 59 from 60. Measure of six-month sales
outlook decreased to 66 from a seven-month high of 69, while index of
current sales fell 1 point to 63. (Source: Bloomberg)
E.U: ECB buys more than 150 companies’ bonds in
five-week-old program. The European Central Bank published its
corporate-bond holdings for the first time, showing that it has bought
debt issued by more than 150 companies under a five-week- old stimulus
program. Issuers included foodmaker Danone SA, miner Glencore Plc and
insurer Mapfre SA, according to data on the ECB’s website, which didn’t
divulge the size of individual bond holdings. Deutsche Lufthansa AG and
Telecom Italia SpA notes rated junk by at least one rating company were
also acquired. The ECB has bought about EUR 10.4b of company bonds since
the program began on June 8 as part of widening efforts to revive
economic growth in Europe. (Source: Bloomberg)
China: Home price gains tapered off last month, as
second-tier cities joined some of the nation’s largest hubs in imposing
housing curbs to cool surging prices. New-home prices excluding
government-subsidized housing climbed in 55 cities in June, down from 60
in May, among the 70 tracked, the National Bureau of Statistics said.
Prices dropped in 10 cities, compared with four a month earlier. They
were unchanged in five cities in June. A surge in home prices showed
signs of slowing after more regional hubs followed top cities Shanghai
and Shenzhen in imposing curbs designed to stem a surge in property
prices. Local authorities raised mortgage down-payment requirements for
some homes in Xiamen, a southern port city in the Fujian province, and
Hefei, the provincial capital of Anhui, where housing prices led gains in
May. (Source: Bloomberg) |
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Other News:
Berjaya Corp: Launches exclusive Vietnam lottery
operations. The launch of the first game, Mega 6/45 lotto jacket, marks
the start of an 18 year venture that will cost about USD210.58m
(MYR925m). Berjaya Corp believes their venture into the Vietnamese computerized
lottery market will see a significant migration from the traditional
paper lottery into computerized lottery as it looks more interesting and
offers more variety of games. On top of that, the northern region of
Vietnam remains a largely untapped market, with it contributing only 12%
to the USD3b paper lottery industry in the country. (Source: The Sun
Daily)
Hubline: To raise MYR200m, expand shipping fleet. Hubline
has proposed another fund-raising corporate exercise, comprising a notes
issue that will raise up to MYR200m mainly for repaying borrowings and
buying six new shipping vessels. The company will set aside half of the
expected MYR200m gross proceeds from the issue for partial repayment of
borrowings/credit facilities. About MYR70m, meanwhile, will be for
capital expenditures – the purchase of six new sets of tug and barges to
boost its dry bulk business. (Source: The Star)
Ekovest: To keep EkoCheras Mall for planned REIT. Ekovest
does not intend to sell its EkoCheras Mall as it plans to keep it for
recurring income and to group it with other properties that provide
recurring income like the group’s MYR4b River of Life project, to form a
real estate investment trust (REIT). However, there is no specific
timeline for the REIT to be realized and will wait for a good time. The
take up rate of EkoCheras Mall is at about 50% to 60% and it’s expected
to be fully occupied when it opens. (Source: The Edge Financial Daily)
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