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Share
Price:
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MYR2.41
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Target
Price:
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MYR2.50
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Recommendation:
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Hold
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A strong showing
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| GMB’s 1H16 results beat expectations. With the 2H16 tariff
hike already secured, it is possible that GMB’s 2016 spread could come
in ahead of guidance. Nevertheless, there remain some uncertainties on
the regulatory front (pertaining to the rate of return for regulated
assets) for 2017. Maintain HOLD, with an unchanged MYR2.50 TP. |
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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
|
2,773.5
|
3,619.0
|
4,047.6
|
4,792.3
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EBITDA
|
258.1
|
191.0
|
212.5
|
217.0
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Core net profit
|
167.6
|
106.2
|
118.8
|
119.1
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Core EPS (sen)
|
13.1
|
8.3
|
9.2
|
9.3
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Core EPS growth (%)
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(2.2)
|
(36.7)
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11.9
|
0.3
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Net DPS (sen)
|
13.1
|
8.3
|
9.3
|
9.3
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Core P/E (x)
|
18.5
|
29.1
|
26.1
|
26.0
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P/BV (x)
|
3.1
|
3.2
|
3.2
|
3.2
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Net dividend yield (%)
|
5.4
|
3.4
|
3.8
|
3.9
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ROAE (%)
|
16.6
|
10.7
|
12.2
|
12.3
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ROAA (%)
|
10.2
|
5.5
|
5.8
|
5.7
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EV/EBITDA (x)
|
14.6
|
14.9
|
13.4
|
13.0
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
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Share
Price:
|
MYR1.68
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Target
Price:
|
MYR1.80
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Recommendation:
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Hold
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4QFY16 on track
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| 4QFY6/16 earnings and 4th interim gross DPU of 2.1sen were
in line. Earnings were mainly lifted by Sunway Pyramid Mall and Sunway
Resort Hotel & Spa, and additional revenue contribution from Sunway
Putra Mall and Sunway Putra Hotel, but the office segment continued to
underperform. We remain neutral on SunREIT’s outlook and maintain our
DDM-TP of MYR1.80 (cost of equity: 7.8%). |
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FYE Jun (MYR m)
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FY15A
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FY16A
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FY17E
|
FY18E
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Revenue
|
453.5
|
507.0
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522.6
|
562.7
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Net property income
|
340.8
|
373.9
|
395.8
|
428.1
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Distributable income
|
256.6
|
270.6
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268.6
|
296.0
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DPU (sen)
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7.8
|
8.3
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8.2
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9.0
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DPU growth (%)
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4.3
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5.2
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(1.0)
|
9.7
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Price/DPU(x)
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21.4
|
20.3
|
20.5
|
18.7
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P/BV (x)
|
1.2
|
1.2
|
1.2
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1.2
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DPU yield (%)
|
4.7
|
4.9
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4.9
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5.3
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ROAE (%)
|
6.3
|
6.5
|
6.7
|
7.4
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ROAA (%)
|
4.0
|
4.0
|
4.1
|
4.4
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Debt/Assets (x)
|
0.3
|
0.3
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0.3
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0.4
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Share
Price:
|
MYR1.47
|
Target
Price:
|
MYR1.34
|
Recommendation:
|
Hold
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Diversification
pains
|
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| Results were below our expectations due to
less-than-expected cost savings. We cut EPS estimates by 12-14% and DPS
by 1sen. Notwithstanding, MPR’s valuations are not expensive and it is
also offering decent yields of >5% p.a.. While the earnings attrition
can be attributed to CJ WoW Shop, we are aware of the need to diversify
away from the cyclical adex based business model. Our unchanged MYR1.34
TP implies 13.5x FY16E PER or 0.9x below its long-term PER mean. |
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FYE Dec (MYR m)
|
FY14A
|
FY15A
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FY16E
|
FY17E
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Revenue
|
1,507.0
|
1,427.7
|
1,467.1
|
1,577.0
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EBITDA
|
310.8
|
327.0
|
264.3
|
267.7
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Core net profit
|
141.6
|
138.7
|
110.0
|
119.6
|
Core EPS (sen)
|
12.8
|
12.5
|
9.9
|
10.8
|
Core EPS growth (%)
|
(34.7)
|
(2.4)
|
(20.7)
|
8.8
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Net DPS (sen)
|
11.0
|
10.0
|
8.0
|
9.0
|
Core P/E (x)
|
11.5
|
11.8
|
14.8
|
13.6
|
P/BV (x)
|
1.0
|
1.0
|
1.0
|
1.0
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Net dividend yield (%)
|
7.5
|
6.8
|
5.4
|
6.1
|
ROAE (%)
|
8.7
|
8.6
|
6.7
|
7.2
|
ROAA (%)
|
5.6
|
5.8
|
4.7
|
5.3
|
EV/EBITDA (x)
|
6.0
|
4.0
|
5.5
|
5.4
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Samuel Yin Shao
Yang
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Jade Tam
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
|
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Industrial production index growth consisting of
manufacturing, mining and electricity quickened June 2016 and 2Q
2016. Index of services also picked up last quarter. Palm oil output
slumped, pointing to further decline in agriculture. Growth in the
value of construction works done was sustained, implying steady
construction activities. We estimate 2Q 2016 real GDP growth of +4.0%
YoY (1Q 2016: +4.2% 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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A decent growth
in 1H 2016
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The economy expanded +2.1% YoY and +0.3% QoQ SAAR in
2Q 2016 (1Q 2016: +2.1% YoY; +1.1% QoQ SAAR), driven by both domestic
and external demand. Tweaked our 2016 growth forecast slightly to
+1.8% from +1.7% previously, but maintained +1.8% for 2017. With 1H
2016 growth at +2.1% YoY, we expect the economy to expand at slower
pace in 2H 2016. |
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|
Suhaimi Ilias
|
|
|
Zamros
Dzulkafli
|
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NEWS
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Outside Malaysia:
U.S: Jobless claims little changed for second straight
week. The number of Americans filing applications for unemployment
benefits was little changed last week, holding near four-decade lows that
highlight strength in the job market. Jobless claims fell by 1,000 to
266,000 in the week ended Aug. 6, from a revised 267,000 in the prior
period, a report from the Labor Department showed. Filings have been
below 300,000 for 75 straight weeks, the longest stretch since 1970.
Employers are retaining and hiring more workers and slowly raising wages,
indicating consumer spending will keep boosting the world’s largest
economy in the second half. Such durability in U.S. employment would be
among forces that encourage Federal Reserve policy makers to raise
interest rates by the end of 2016. (Source: Bloomberg)
U.K: BOE is sticking to its guns as it moves into its
second week of bond purchases. The central bank left its shopping list
broadly unchanged after the first week of its extended quantitative
easing program saw it fail to attract enough sellers of gilts due in more
than 15 years to hit its purchase target. On Aug. 16 it will seek GBP
1.17b (USD 1.5b) of 15 of the 16 securities in that maturity bracket that
it sought on Aug. 9, with the July 2055 bond being excluded because the
Debt Management Office is selling the debt within a week of the
operation. That’s despite the BOE being offered none of the July 2040 and
July 2049 bonds at this week’s operation, and having to accept some
offers for other gilts that were significantly over the average market
price. (Source: Bloomberg)
Russia: Economy shrank the least since a contraction began
at the start of last year, putting it on the cusp of exiting the longest
recession in two decades. GDP lost 0.6% YoY in the second quarter after a
decline of 1.2% YoY in the previous three months, the Federal Statistics
Service said, citing preliminary data. (Source: Bloomberg) |
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Other News:
Kumpulan Perangsang Selangor: Proposes to acquire Century
Bond. The company’s wholly owned subsidiary Perangsang Packaging Sdn Bhd
(PPSB) entered into a conditional share sale agreement with CB Equities
Sdn Bhd (CBE), which holds 50.55% of Century Bond’s shares, and its
affiliates to acquire the 85.7 million Century Bond shares or 71.44%
shareholding in the company for MYR150.03m. The company said it would pay
MYR1.75 per share which represents a 2.3% premium to Century Bond’s
closing price of MYR1.71 yesterday. PPSB will be obliged to extend a
mandatory general offer (MGO) for the remaining 28.56% CBB shares that it
does not own for MYR59.97m. Both proposals will be funded entirely in
cash, via a combination of external borrowings and internally generated funds.
The entire deal is expected to close by the end of 1Q17. (Source: The
Edge financial Daily)
Iris Corp: Clinches Nigeria e-passports deal. The company
has bagged a USD42.49m (MYR170.37m) contract for the supply of 2.5
million units of 32-page e-passport for Nigeria. The group said it had
entered into a supply agreement with Iris Smart Technologies Ltd for the
three-year deal. Iris Smart Technologies, which was incorporated under
the laws of Nigeria, is a system integrator and solution provider for the
establishment and management of citizen database and identity management.
The implementation of the agreement will be financed with internal funds
and bank borrowings. According to the group, the supply agreement will
commence “from the date of the agreement”. (Source: The Sun Daily)
Eco World: To launch MYR15b Eco Grandeur next month. The
group will launch Eco Grandeur, a modern integrated green township
located in Bandar Puncak Alam, Selangor, next month. The entire
development, comprising Eco Grandeur and the adjacent Eco Business Park
V, has a combined GDV of MYR15b. The phase 1 of the development is to be
completed in three years while the entire project will be completed
within 12 to 15 years. (Source: The Edge Financial Daily) |
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