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Share
Price:
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MYR0.45
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Target
Price:
|
MYR0.64
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Recommendation:
|
Buy
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Selling overdone
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With its investment in Technics fully impaired, we expect
headline net profit to normalize going forward. Outstanding orderbook
of MYR2.4b also provides good near-term earnings visibility. Our
FY16-18 core net profit forecasts are raised by 15%/36%/33% after
increasing our FY16/ FY17/FY18 job wins assumptions to MYR2b/1.5b/1.5b.
Reflecting its high gearing and receivables, we continue to peg the
stock to 0.5x P/B (-1SD). Selling on the stock seems overdone. We
upgrade the stock to a BUY.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
1,002.8
|
1,788.8
|
1,823.3
|
2,002.5
|
|
EBITDA
|
87.2
|
124.3
|
74.9
|
197.7
|
|
Core net profit
|
23.7
|
47.5
|
68.4
|
80.1
|
|
Core EPS (sen)
|
3.1
|
6.1
|
8.8
|
10.3
|
|
Core EPS growth (%)
|
(55.8)
|
100.0
|
44.0
|
17.1
|
|
Net DPS (sen)
|
1.3
|
0.5
|
0.0
|
0.8
|
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Core P/E (x)
|
14.7
|
7.3
|
5.1
|
4.3
|
|
P/BV (x)
|
0.4
|
0.3
|
0.3
|
0.3
|
|
Net dividend yield (%)
|
2.8
|
1.1
|
0.0
|
1.9
|
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ROAE (%)
|
na
|
na
|
na
|
na
|
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ROAA (%)
|
1.3
|
2.0
|
2.5
|
2.7
|
|
EV/EBITDA (x)
|
10.3
|
10.2
|
15.2
|
6.2
|
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Net debt/equity (%)
|
32.3
|
58.9
|
69.1
|
70.8
|
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Chew Hann Wong
|
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Adrian Wong
|
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Share
Price:
|
MYR2.95
|
|
Target
Price:
|
MYR2.75
|
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Recommendation:
|
Hold
|
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Weak quarter but
expected
|
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2QFY1/17 and 1HFY1/17 earnings and dividends were in-line.
Although Astro’s subscribership base continues to ease and we expect it
to ease further post the MYR8 sports package price hike on 1 Aug 2016,
we still expect future quarterly earnings to be better due to
non-recurrence of UEFA Euro Cup and Summer Olympics content cost. We
leave our earnings estimates, HOLD call and MYR2.75 DCF-based TP
unchanged for now.
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FYE Jan (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
|
Revenue
|
5,231.4
|
5,475.4
|
5,681.6
|
5,814.2
|
|
EBITDA
|
1,808.3
|
1,940.6
|
1,842.8
|
2,030.1
|
|
Core net profit
|
519.4
|
662.0
|
644.8
|
798.1
|
|
Core FDEPS (sen)
|
10.0
|
12.7
|
12.3
|
15.2
|
|
Core FDEPS growth(%)
|
15.9
|
27.3
|
(3.0)
|
23.8
|
|
Net DPS (sen)
|
11.0
|
12.0
|
12.0
|
12.0
|
|
Core FD P/E (x)
|
29.6
|
23.2
|
24.0
|
19.4
|
|
P/BV (x)
|
22.1
|
25.6
|
24.7
|
19.3
|
|
Net dividend yield (%)
|
3.7
|
4.1
|
4.1
|
4.1
|
|
ROAE (%)
|
79.5
|
95.1
|
105.6
|
112.8
|
|
ROAA (%)
|
7.5
|
9.7
|
9.2
|
11.3
|
|
EV/EBITDA (x)
|
9.6
|
9.1
|
10.0
|
9.1
|
|
Net debt/equity (%)
|
301.0
|
nm
|
485.0
|
397.7
|
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NEWS
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Outside Malaysia:
U.K: Unemployment rate stayed at an 11-year low in the
three months through July as the economy added jobs, according to figures
from the Office for National Statistics. Unemployment fell 39,000 to 1.63
million, leaving jobless rate at 4.9%. Number of people in work rose
174,000 to 31.8 million, highest on record. In July alone, unemployment
rate fell to 4.7%, lowest since September 2005 (Source: Bloomberg)
China: Credit expansion rebounds in August on property
binge. China’s broadest measure of new credit exceeded estimates in
August as a property boom in the nation’s biggest cities fuels near-term
growth and adds to longer-term worries about the expansion’s
sustainability. Aggregate financing was CNY 1.47t (USD 220b) in August.
New yuan loans stood at CMY 948.7b. The rise in aggregate financing
helped fuel a 39% jump in property sales by value in the first eight
months. Medium and long-term new loans, mostly mortgages, climbed CNY
528.6b. Private investment in fixed assets, meanwhile, stalled at 2.1%
for a second straight month in the January through August period,
matching a record low. (Source: Bloomberg)
Thailand: Central bank kept its benchmark interest rate
unchanged for an 11th consecutive meeting, the longest streak on record,
as an economic recovery continues to gain momentum. The Bank of Thailand
held its one-day bond repurchase rate at 1.5%, with monetary policy
committee members voting unanimously in favor, it said in Bangkok.
(Source: Bloomberg)
Crude Oil: Global glut set to worsen as Nigeria, Libya
fields restart. Amid the most enduring global oil glut in decades, two
OPEC crude producers whose supplies have been crushed by domestic
conflicts are preparing to add hundreds of thousands of barrels to world
markets within weeks. Libya’s state oil company lifted curbs on crude
sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially
unlocking 300,000 barrels a day of supply. In Nigeria, Exxon Mobil Corp.
was said to be ready to resume shipments of Qua Iboe crude, the country’s
biggest export grade, which averaged about 340,000 barrels a day in
shipments last year, according to Bloomberg estimates. On top of that, a
second Nigerian grade operated by Royal Dutch Shell Plc is scheduled to
restart about 200,000 barrels a day of flow within days. (Source:
Bloomberg)
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Other News:
Construction: Inta Bina seeks ACE market entry. The
company has been in Malaysia construction industry for over 25 years, is
planning to offer 107.05m of its shares of 10sen each in its initial
public offering to list on Bursa Malaysia’s ACE Market. The shares
represent 20% of its enlarged issues and paid-up share capital. The
proceeds from the public issue are expected to be utilized for capital
expenditure, repayment of bank borrowings, general working capital and
estimated listing expenses, though Inta Bina did not reveal the
breakdown. Its order book value, as at May 31 this year was
MYR446.8m.(Source: The Edge Financial Daily)
Property: End-financing woes, loan rejection continue to
dampen property market. End-financing issues and loan rejection remain
the top reasons for unsold properties in Malaysia, said the Real Estate
and Housing Developers’ Association Malaysia (Rehda). Rehda president
Datuk Seri Fateh Iskandar Mohamed Mansor said end-financing issues have
plagued the property market since 2014. Among the cost- cutting measures
implemented were recruitment freeze, less benefits/perks, less working
hours, restructuring, retrenchment and salary reduction. To boost sales,
developers have resorted to creative strategies including freebies,
reviewing selling prices (including rebates) and financing/easy payment
schemes. (Source: The Sun Daily)
LBS Bina: To inject construction arm into ML Global. The
company which is reorganising its construction division by injecting
construction unit MITC Engineering S/B (MITCE) into its 51.18%-owned
subsidiary ML Global, wants to grow ML Global into one of the major
construction arms in the country. LBS and ML Global managing director Tan
Sri Lim Hock San said MITCE has tendered for MYR639m worth of jobs and is
close to securing some deals. It has an order book of MYR1.5b consisting
of 62% from LBS and 38% from external parties. Formed in 2007, it has
also completed MYR1.15b worth of jobs. (Source: The Sun Daily)
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