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Sunway
Construction Group |
Chew Hann Wong
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Share
Price:
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MYR1.61
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Target
Price:
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MYR1.80
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Recommendation:
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Buy
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SCG has won an additional advance work package for KVMRT 2
from MMC-Gamuda worth MYR53m. It also accepted a Letter of Intent from
Sunway Iskandar Sdn Bhd to take on 1) construction of 88 units of
office shop lots utilizing precast (MYR57m) & 2) design and build
of a proposed commercial retail complex (MYR100m) in the Medini area.
YTD job wins of MYR2.6b has lifted its outstanding orderbook to MYR5b.
Our earnings having imputed MYR3.0b job wins for 2016. Reiterate BUY
with unchanged TP of MYR1.80
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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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1,880.7
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1,916.9
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2,359.0
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2,511.2
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EBITDA
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151.2
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178.2
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204.0
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241.8
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Core net profit
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114.2
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127.7
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135.0
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164.9
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Core EPS (sen)
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8.8
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9.9
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10.4
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12.8
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Core EPS growth (%)
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20.9
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11.9
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5.7
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22.1
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Net DPS (sen)
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30.5
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4.0
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3.7
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4.5
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Core P/E (x)
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18.2
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16.3
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15.4
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12.6
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P/BV (x)
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6.2
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4.6
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3.9
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3.2
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Net dividend yield (%)
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19.0
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2.5
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2.3
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2.8
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ROAE (%)
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na
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na
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na
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na
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ROAA (%)
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8.4
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9.2
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8.5
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9.4
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EV/EBITDA (x)
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na
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8.7
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8.4
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6.6
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Net debt/equity (%)
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net cash
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net cash
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net cash
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net cash
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Chew Hann Wong
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Adrian Wong
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Share
Price:
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MYR1.88
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Target
Price:
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MYR2.05
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Recommendation:
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Buy
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3QFY16: Above
expectations
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3QFY10/16 results came in above expectations on
better-than-expected product mix and A&P income. As of end-Jul,
Bison has opened 48 stores, on track to meet its 70 new store openings
p.a. from FY16-18. Imputing the better set of results, we raised our
earnings forecasts by 9%-13% for FY16-18. We maintain BUY, with a
higher TP of MYR2.05 (+23sen).
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FYE Oct (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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182.4
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217.5
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264.3
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320.1
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EBITDA
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19.1
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21.0
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28.1
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34.9
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Core net profit
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12.3
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13.5
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19.4
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24.5
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Core EPS (sen)
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4.0
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4.4
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6.3
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7.9
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Core EPS growth (%)
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5.5
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9.5
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43.8
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26.2
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Net DPS (sen)
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3.5
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0.2
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1.5
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1.5
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Core P/E (x)
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47.2
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43.1
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30.0
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23.8
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P/BV (x)
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13.7
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10.5
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3.7
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3.3
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Net dividend yield (%)
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1.9
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0.1
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0.8
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0.8
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ROAE (%)
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33.4
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27.6
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18.1
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14.5
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ROAA (%)
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16.7
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14.9
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12.6
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11.0
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EV/EBITDA (x)
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na
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na
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18.0
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14.5
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Net debt/equity (%)
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3.9
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4.6
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net cash
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net cash
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Share
Price:
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MYR3.26
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Target
Price:
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MYR4.35
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Recommendation:
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Buy
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1HFY17 results
preview
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1HFY1/17 earnings are expected to track expectations, with
a stronger sequential 2Q. A 15sen special DPS is a short-term positive.
Securing a FPSO job win over the next 6 months would be a major
re-rating catalyst, a prospect that cannot be discounted, based on its
prudent financial and sound technical profile. Our TP is SOP-based.
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FYE Jan (MYR m)
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FY16A
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FY17A
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FY18E
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FY19E
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Revenue
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1,083.4
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986.0
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996.0
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1,286.2
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EBITDA
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225.4
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261.0
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288.5
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417.8
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Core net profit
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142.6
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173.1
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184.2
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220.0
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Core EPS (sen)
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13.8
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16.2
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17.3
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20.6
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Core EPS growth (%)
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114.7
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17.5
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6.4
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19.4
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Net DPS (sen)
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2.0
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1.9
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2.0
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2.4
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Core P/E (x)
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23.6
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20.1
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18.9
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15.8
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P/BV (x)
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2.3
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1.5
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1.4
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1.3
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Net dividend yield (%)
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0.6
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0.6
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0.6
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0.7
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ROAE (%)
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na
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na
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na
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na
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ROAA (%)
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6.1
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4.8
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3.5
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3.5
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EV/EBITDA (x)
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14.6
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17.8
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16.7
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11.6
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Net debt/equity (%)
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31.4
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51.9
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55.2
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51.2
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Jobless rate
hovers around 3.4%-3.5%
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Unemployment rates increased to 3.5% in Jul 2016 from
3.4% in June 2016, but to note, it has been hovering in the 3.4%-3.5%
range since Dec 2015. Year-to-date unemployment rate is 3.4%. No
change in our full-year average jobless rate forecast of 3.5% (2015:
3.2%).
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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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Flat amid mixed
industries’ performance
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Industrial Production (IP) rose marginally by +0.1%
YoY in Aug 2016 (revised July 2016: -3.5% YoY) as higher output of
electronics and precision engineering industries cancelled the
declines in transport engineering and biomedical production. IP
dropped -1.3% YoY in July-Aug 2016 (2Q 2016: +1.4% YoY), suggesting
downward pressure on GDP growth in 3Q 2016.
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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: Sales of new homes retreated in August from nine-year
high, representing a pause in momentum within residential real estate.
Sales fell 7.6% to a 609,000 annualized pace, from a revised 659,000 rate
in the prior month that was the strongest since October 2007, figures
from the Commerce Department showed. Prices fell from a year earlier to
the lowest level in almost two years. (Source: Bloomberg)
Germany: Business sentiment in September surged to the
highest level in more than two years in a sign that corporate concerns
are easing over the economic outlook and the consequences of Britain’s
decision to leave the European Union, a report from the Munich-based Ifo
institute showed. Business climate index rose to 109.5 from a revised
106.3. (Source: Bloomberg)
France: Joblessness jumps to 2016-high as attacks hurt
hotels. French jobless claims jumped in August to the highest this year
in an increase that the government blamed on a lack of summer hiring
among hoteliers and restaurateurs. The number of people actively looking
for work rose by 50,200, or 1.4%, to 3.56 million in August, the Labor
Ministry said in a statement. Since the beginning of 2015, more than 200
people have been killed by terrorists in France with the latest attack
coming in Nice on July 14. The repeated assaults have kept some
foreigners away and had a knock-on effect on an industry that generates
as much as 7% of French economic output. (Source: Bloomberg)
Japan: Households and companies continue to hold onto cash
rather than spending or investing, highlighting the ongoing challenge to
revitalize the economy. Households held JPY 920t (USD 9.1t) of their
assets in cash or deposits at the end of the quarter through June, the
second-highest level on record, a report by the Bank of Japan showed.
Corporate cash and deposits stood at JPY 242t, an all-time high after a
revision of data for previous periods, according to the report. The
figures indicate that the central bank’s unprecedented monetary stimulus
has yet to bring much fundamental change to the behavior of households
and companies. (Source: Bloomberg)
Thailand: Exports rose for the first time in five months
in August following a surge in vehicle shipments, according to data from
the Ministry of Commerce. Exports gained 6.5% YoY in August. Automobiles,
which make up 12% of total exports, climbed 40.4% YoY in August.
Industrial exports rose 9% YoY, led by auto, steel and semiconductor
sectors. Thailand posted a trade surplus of USD 2.13b in August, compared
with USD 1.2b in the previous month. (Source: Bloomberg)
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Other News:
UEM Edgenta: To buy top healthcare facilities manager for
MYR565m. UEM Edgenta is set to become the country’s biggest facilities
management provider servicing the private healthcare and hospital
segments through its proposed acquisition of Asia Integrated Facility
Solutions Pte Ltd for SGD185.9m (MYR565.2m) in cash. Asia Integrated
Facility Solutions owned indirectly UEMS Pte Ltd, the number one
facilities management firm catering to those segments in the country. The
proposed purchase was expected to be completed in the fourth quarter of
2016, subject to its shareholders’ approval at an EGM to be convened.
(Source: The Star)
Damansara Realty: Partners L.C. Catering in MYR124m Rapid
job. Damansara Realty’s wholly-owned subsidiary TMR Urusharta (M) Sdn Bhd
has formed a JV with L.C. Catering Sdn Bhd to provide facilities
management and catering services to Petronas Refinery and Petrochemical
Corporation Sdn Bhd worth MYR124m. TMR LC Services Sdn Bhd, the JV 70%
owned by TMR and 30% by L.C. Catering, will operate and maintain the
temporary executive village as well as management office of Petronas’
Refinery and Petrochemical Integrated Development (Rapid) in Pengerang,
Johor. The JV will provide general cleaning, pest control, landscaping
and other services to Petronas’ temporary executive village and
management office from Nov 1, 2016. The contract, to be completed over 38
months. (Source: The Sun Daily)
KNM: To issue Thai bonds worth up to USD80m for bioethanol
plants. KNM Group plans to issue up to USD80m (MYR329.9m) Thai bonds to
raise funds for the construction of bioethanol plants in Thailand. The
plants are to be constructed by Impress Ethanol Co Ltd (IEL), a 72%-owned
subsidiary of recently acquired Asia Bio-Fuels Ltd and Asia Bio-Fuels II
Ltd. The proposed bond issue is expected to be fully issued by December
this year. The total costs related to the proposed issuance to be
incurred in the fourth quarter of 2016 is estimated at MYR1.1m. (Source:
The Sun Daily)
DRB-Hicom: The Verge’s buyer will assume outstanding loan.
DRB-Hicom has denied selling its Singapore property, The Verge, to
Columba Holdings Pte Ltd at 40% below the price of an earlier aborted
deal, saying that the indicative price of the cancelled transaction had
not been adjusted to factor in an outstanding loan facility. The
indicative price of SGD317m (MYR961.7m) under the aborted sale to
Evolutyon Real Estate Investment Holding Pte Ltd was prior to the “agreed
adjustments”, which substantially comprised the redemption of Corwin
Holding Pte Ltd’s outstanding loan facility totalling SGD85.52mil
(SGD259.5m). (Source: The Star)
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