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Share
Price:
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MYR6.58
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Target
Price:
|
MYR6.20
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Recommendation:
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Hold
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Not quite clear
on prices
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Management did not directly address the halving of fixed
broadband prices as mentioned in Budget 2017. Nevertheless, we do not
rule out the possibility that the government was referring to unit
prices (on a per Mbps basis) rather than absolute prices, in which
case, the impact to TM would not be that detrimental. Maintain HOLD
with an unchanged TP of MYR6.20.
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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
|
11,235.1
|
11,721.6
|
12,251.2
|
12,893.4
|
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EBITDA
|
3,728.2
|
3,677.0
|
3,883.6
|
4,100.1
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Core net profit
|
941.2
|
894.9
|
803.2
|
805.8
|
|
Core EPS (sen)
|
25.9
|
23.8
|
21.4
|
21.4
|
|
Core EPS growth (%)
|
(10.8)
|
(8.1)
|
(10.2)
|
0.3
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Net DPS (sen)
|
22.9
|
21.4
|
19.2
|
19.3
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Core P/E (x)
|
25.4
|
27.6
|
30.8
|
30.7
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P/BV (x)
|
3.2
|
3.2
|
3.1
|
3.1
|
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Net dividend yield (%)
|
3.5
|
3.3
|
2.9
|
2.9
|
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ROAE (%)
|
11.3
|
9.1
|
10.3
|
10.2
|
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ROAA (%)
|
4.3
|
3.8
|
3.3
|
3.2
|
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EV/EBITDA (x)
|
7.5
|
7.9
|
7.5
|
7.2
|
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Net debt/equity (%)
|
39.5
|
45.7
|
54.1
|
58.7
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Chi Wei Tan
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Syairah Malek
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Share
Price:
|
MYR8.80
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Target
Price:
|
MYR8.90
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Recommendation:
|
Hold
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3Q16 results
review
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Bursa’s 3Q16 net profit of MYR44m was within our
expectation. We make no change to our earnings forecasts for now as we
continue to monitor trading activities in the final quarter. Our TP is
unchanged at MYR8.90, pegging the stock to 23x PER on FY17 earnings.
Maintain HOLD for its decent dividend yield of 4.1% for FY17.
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FYE Dec (MYR m)
|
FY14A
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FY15A
|
FY16E
|
FY17E
|
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Revenue
|
503.8
|
518.5
|
527.1
|
545.2
|
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EBITDA
|
297.0
|
302.5
|
301.6
|
309.6
|
|
Core net profit
|
198.2
|
198.6
|
200.4
|
205.8
|
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Core EPS (sen)
|
37.2
|
37.2
|
37.5
|
38.5
|
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Core EPS growth (%)
|
14.4
|
(0.0)
|
0.7
|
2.7
|
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Net DPS (sen)
|
54.0
|
34.5
|
35.0
|
36.0
|
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Core P/E (x)
|
23.7
|
23.7
|
23.5
|
22.9
|
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P/BV (x)
|
6.3
|
5.8
|
5.7
|
5.6
|
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Net dividend yield (%)
|
6.1
|
3.9
|
4.0
|
4.1
|
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ROAE (%)
|
25.4
|
25.6
|
24.7
|
24.8
|
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ROAA (%)
|
11.7
|
10.6
|
9.2
|
9.0
|
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EV/EBITDA (x)
|
13.7
|
13.8
|
14.7
|
14.2
|
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Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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Ta Ann (TAH MK)
by Chee
Ting Ong
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Share
Price:
|
MYR3.58
|
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Target
Price:
|
MYR3.75
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Recommendation:
|
Hold
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Expensive
Sarawak acquisition
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We are short term negative on Ta Ann’s latest acquisition
of largely immature estates near Kuching at an estimated EV per planted
ha of MYR56,020; which is 65% more than Sarawak Oil Palm’s (HOLD)
recent proposed acquisition of MYR34,000/ha. This acquisition is likely
to be EPS dilutive on Ta Ann over the next 2-3 years given the high
acquisition costs and low FFB yield in the initial years of harvesting.
Ta Ann is a HOLD with an unchanged TP of MYR3.75 on 15x 2016 PER.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
1,020.7
|
1,046.8
|
1,009.5
|
1,081.0
|
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EBITDA
|
243.2
|
323.9
|
249.8
|
265.7
|
|
Core net profit
|
110.6
|
185.9
|
111.0
|
120.7
|
|
Core EPS (sen)
|
24.9
|
41.8
|
25.0
|
27.1
|
|
Core EPS growth (%)
|
82.6
|
68.1
|
(40.3)
|
8.7
|
|
Net DPS (sen)
|
16.7
|
16.7
|
11.2
|
12.2
|
|
Core P/E (x)
|
14.4
|
8.6
|
14.3
|
13.2
|
|
P/BV (x)
|
1.5
|
1.3
|
1.3
|
1.2
|
|
Net dividend yield (%)
|
4.7
|
4.7
|
3.1
|
3.4
|
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ROAE (%)
|
11.9
|
17.5
|
9.2
|
9.5
|
|
ROAA (%)
|
6.0
|
9.6
|
5.6
|
6.2
|
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EV/EBITDA (x)
|
6.9
|
6.3
|
7.0
|
6.5
|
|
Net debt/equity (%)
|
18.1
|
12.0
|
8.8
|
7.5
|
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Share
Price:
|
MYR50.24
|
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Target
Price:
|
MYR48.50
|
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Recommendation:
|
Hold
|
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3Q16: No
surprises
|
|
3Q16 results were in line. While we do not rule out the
possibility of an excise tax hike this year, we believe any adjustment
should be moderate in view of overall industry volume weakness, and
that the focus could also be on stepping up enforcement to combat
illicits; which in turn could improve excise tax collection. We now
rate BAT as a HOLD (from SELL) following the share price decline since
end-July 2016.
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
4,796.0
|
4,581.5
|
3,986.1
|
3,683.9
|
|
EBITDA
|
1,277.0
|
1,277.3
|
958.8
|
926.7
|
|
Core net profit
|
910.0
|
914.5
|
660.0
|
671.8
|
|
Core EPS (sen)
|
318.7
|
320.3
|
231.2
|
235.3
|
|
Core EPS growth (%)
|
10.5
|
0.5
|
(27.8)
|
1.8
|
|
Net DPS (sen)
|
309.0
|
312.0
|
208.0
|
223.5
|
|
Core P/E (x)
|
15.8
|
15.7
|
21.7
|
21.4
|
|
P/BV (x)
|
27.4
|
26.2
|
18.8
|
18.0
|
|
Net dividend yield (%)
|
6.2
|
6.2
|
4.1
|
4.4
|
|
ROAE (%)
|
174.7
|
170.0
|
123.7
|
86.3
|
|
ROAA (%)
|
68.5
|
73.4
|
50.9
|
48.3
|
|
EV/EBITDA (x)
|
14.8
|
12.8
|
14.9
|
15.4
|
|
Net debt/equity (%)
|
65.9
|
50.5
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
Share
Price:
|
MYR1.75
|
|
Target
Price:
|
MYR1.70
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
3Q16 in line;
sells Axis Eureka
|
|
3Q16 results and third interim gross DPU of 2.05sen were
in line. The slower YoY earnings were due to flat revenue growth and
higher interest costs. Elsewhere, we are positive on AXRB’s proposal to
dispose Axis Eureka for MYR56m. We trim our FY17-18 earnings forecasts
by ~2% p.a. and nudge down our DDM-based TP by 2sen to MYR1.70.
|
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|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
140.0
|
165.7
|
168.5
|
176.3
|
|
Net property income
|
118.5
|
141.9
|
142.6
|
150.3
|
|
Distributable income
|
81.3
|
91.5
|
92.3
|
97.7
|
|
DPU (sen)
|
8.9
|
7.6
|
7.6
|
8.0
|
|
DPU growth (%)
|
6.8
|
(14.9)
|
(0.1)
|
5.8
|
|
Price/DPU(x)
|
19.7
|
23.1
|
23.2
|
21.9
|
|
P/BV (x)
|
1.4
|
1.4
|
1.4
|
1.4
|
|
DPU yield (%)
|
5.1
|
4.3
|
4.3
|
4.6
|
|
ROAE (%)
|
9.4
|
7.2
|
6.8
|
7.2
|
|
ROAA (%)
|
4.4
|
4.3
|
4.3
|
4.5
|
|
Debt/Assets (x)
|
0.3
|
0.3
|
0.3
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACRO RESEARCH
|
|
|
|
|
|
|
|
Economics Research
by
Suhaimi Ilias
|
|
|
|
|
|
|
|
|
|
|
Headline deflation eased to -0.2% YoY in Sep 2016 (Aug
2016: -0.3% YoY) while core inflation moderated slightly to +0.9% YoY
(Aug 2016: +1.0% YoY) on lower services inflation. The slower
deflation was mainly due to slower drop in “Transport” costs. Maintain
our full-year headline and core inflation rate forecasts at-0.4% and
+1.0% respectively.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
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NEWS
|
|
|
Outside Malaysia:
E.U: Euro-area economic momentum accelerated to the
fastest pace this year, adding to evidence that growth is becoming more
resilient. A Purchasing Managers’ Index for manufacturing and services
rose to 53.7 in October from 52.6 in September, IHS Markit said. This is
the fastest pace since the beginning of 2016. (Source: Bloomberg)
E.U: Budget deficits in the Euro Area narrowed to an
eight-year low in the second quarter amid mounting signs that the
economic recovery is gaining traction. The euro area’s seasonally-adjusted
budgetary shortfall fell to 1.5% of output compared with 2.1% in the same
period a year ago, the European Union’s statistics agency said. That is
the smallest shortfall since early 2008. Having contended with bank
bailouts, recessions and a sovereign debt crisis, European authorities
hope to return to tighter budget discipline as prospects for growth
improve. Under European Union rules, nations are supposed to keep their
debt ratios below 60% of output and limit deficits to 3%. (Source: Bloomberg)
S. Korea: Economy grew more than forecast in 3Q 2016,
supported by a property market boom, while exports and consumption were
disappointing. GDP expanded 0.7% in the third quarter from the previous
three months, when it gained 0.8%. The economy expanded 2.7%% YoY,
according to data released by the central bank. Biggest contributor to
growth was construction investment, which added 0.6 percentage point to
expansion from previous quarter; net exports shaved 0.6 percentage point
off GDP. (Source: Bloomberg)
Crude Oil: Trades near USD 50/bbl as OPEC chief seeks to
resolve output plan. OPEC Secretary-General Mohammed Barkindo is set to
visit Baghdad for talks aimed at resolving a deal on output after Iraq
said it should be exempt from planned cuts. Barkindo will meet with the
prime minister and oil minister, according to people familiar with the
matter, after Iraq said it should be excluded from the deal due to
conflict with Islamic militants. Brent for December settlement was USD
51.46/bbl as it ended the session at a premium of USD 0.94/bbl to WTI.
(Source: Bloomberg)
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Other News:
Ekovest: Bags MYR255.5m beautification job from DBKL. Its
wholly-owned subsidiary EkoRiver Construction S/B has bagged a MYR255.49m
contract from the Kuala Lumpur City Hall (DBKL) to undertake improvement
and beautification works. Ekovest said the contract includes the
construction of an interceptor system and its related works to improve
the quality of the river water, which includes a water treatment system
along Sungai Gombak and Sungai Klang. The completion period for the works
is 130 weeks. Ekovest managing director Datuk Seri Lim Keng Cheng said
the total outstanding construction order book will be increased to
MYR5.54b (Source: The Edge Financial Daily)
I-Bhd: 3QFY16 net profit surges 2.6 times. The group,
whose third quarter net profit surged 2.6 times, has managed to turn
around its theme park that impacted its performance in the first half of
the year. Executive chairman, Lim Kim Hong said given their 30% dividend
policy, the group expect to record dividends for their shareholder this
year. Net profit surged to MYR22.4m or 2.11 sen a share in the third
quarter ended Sep 30,2016 (3QFY16), from MYR8.56m or 0.81 sen a share a
year ago, underpinned by the on-going development of its flagship i-City
project in Shah Alam. (Source: The Edge Financial Daily)
Telekom: Same price, twice broadband speed for UniFi
customers. Telekom has announced its Broadband Improvement Plan for 2017
to provide Malaysians with higher value offerings. Under the initiative,
the average broadband speeds for residential UniFi customers will be
doubled, but for the same price. Eligible customers nationwide will begin
enjoying the upgrades in stages, beginning January 2017 onwards. In
addition, Telekom Malaysia will also be introducing a new broadband
package offering for non-UniFi customers in 2017. To date, Telekom
Malaysia has more than 2.37 million broadband customers, of which over
900,000 are UniFi customers. (Source: The Star)
Metronic Global: Seeks EGM to remove MNC Wireless
directors. Metronic Global and one other shareholder of MNC Wireless have
served a special notice to loss-making MNC Wireless to convene an
extraordinary general meeting (EGM) to seek shareholders' approval to
remove five directors. They seek to remove MNC Wireless' chairman Wong
Kok Seong, chief executive officer and executive director Christopher Tan
Chor How, executive director Pang Siaw Sian, independent non-executive
director Thu Soon Shien and non-independent non-executive director Kua
Khai Shyuan. MNC Wireless is proposing a renounceable right issue of up
to 283.42 million new shares, together with up to 188.95 million free
warrants at an issue price of 10 sen per rights share on the basis of
three rights shares with two free warrants for every one existing MNC
Wireless shares. (Source: The Edge Financial Daily)
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