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Share
Price:
|
MYR1.62
|
|
Target
Price:
|
MYR1.80
|
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Recommendation:
|
Buy
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3Q16: Growth
intact
|
|
3Q16 results were in line, whereby net profit growth was
mainly encouraged by stronger topline due to positive rental reversions
and sustained occupancy rates. Our earnings forecasts and DDM-based TP
of MYR1.80 are unchanged. We continue to like IGBREIT for its resilient
earnings and sustained distributions. Potential total return now is
16%.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
461.8
|
489.2
|
507.3
|
524.9
|
|
Net property income
|
312.6
|
342.8
|
353.3
|
365.9
|
|
Distributable income
|
268.8
|
291.0
|
309.0
|
320.5
|
|
DPU (sen)
|
7.0
|
7.4
|
8.0
|
8.2
|
|
DPU growth (%)
|
10.7
|
5.1
|
8.3
|
3.0
|
|
Price/DPU(x)
|
23.1
|
22.0
|
20.3
|
19.7
|
|
P/BV (x)
|
1.5
|
1.5
|
1.5
|
1.5
|
|
DPU yield (%)
|
4.3
|
4.5
|
4.9
|
5.1
|
|
ROAA (%)
|
4.6
|
4.9
|
5.2
|
5.4
|
|
Debt/Assets (x)
|
0.2
|
0.2
|
0.2
|
0.2
|
|
|
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Share
Price:
|
MYR3.56
|
|
Target
Price:
|
MYR2.65
|
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Recommendation:
|
Sell
|
|
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|
|
Still cloudy
visibility
|
|
Despite weaker sequential revenue (-9% QoQ), mainly from
sensor and LED segments, earnings improved 40% QoQ on better cost
controls. We keep our forecasts, expecting earnings to weaken on
seasonally slower activities in 4Q16. Near-term visibility for Globetronics
remains cloudy in absence of a pick-up for its sensor division which
has seen sizeable capex in 2015. On pricey valuations (19x FY17 EPS),
we maintain SELL on Globetronics with an unchanged TP of MYR2.65 pegged
on 14x FY17 EPS.
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|
|
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
355.0
|
343.7
|
259.7
|
323.2
|
|
EBITDA
|
108.6
|
96.3
|
53.1
|
79.7
|
|
Core net profit
|
64.4
|
71.3
|
24.7
|
53.3
|
|
Core FDEPS (sen)
|
22.9
|
25.3
|
8.7
|
18.8
|
|
Core FDEPS growth(%)
|
20.5
|
10.4
|
(65.5)
|
115.5
|
|
Net DPS (sen)
|
23.0
|
20.0
|
20.0
|
18.0
|
|
Core FD P/E (x)
|
15.5
|
14.1
|
40.7
|
18.9
|
|
P/BV (x)
|
3.5
|
3.3
|
3.7
|
3.7
|
|
Net dividend yield (%)
|
6.5
|
5.6
|
5.6
|
5.1
|
|
ROAE (%)
|
23.0
|
24.4
|
8.7
|
19.8
|
|
ROAA (%)
|
18.5
|
19.9
|
7.2
|
16.2
|
|
EV/EBITDA (x)
|
9.7
|
17.3
|
16.1
|
10.8
|
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
Share
Price:
|
MYR78.20
|
|
Target
Price:
|
MYR78.00
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
3Q16: Earnings
on track
|
|
3Q16 results were in line. Moving forward, we expect
domestic sales growth to be sustainable backed by a gradual pick-up in
consumption and the launch of new products. As for its export segment,
it should continue its growth momentum riding on its export potential
from noodles, coffee, confectionary and RTD products. Maintain HOLD
with an unchanged DCF-TP of MYR78.00.
|
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|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
4,808.9
|
4,838.0
|
5,152.4
|
5,554.3
|
|
EBITDA
|
837.2
|
886.0
|
1,025.6
|
1,080.6
|
|
Core net profit
|
550.4
|
590.7
|
670.1
|
694.2
|
|
Core EPS (sen)
|
234.7
|
251.9
|
285.8
|
296.1
|
|
Core EPS growth (%)
|
(2.0)
|
7.3
|
13.4
|
3.6
|
|
Net DPS (sen)
|
235.0
|
260.0
|
282.9
|
293.1
|
|
Core P/E (x)
|
33.3
|
31.0
|
27.4
|
26.4
|
|
P/BV (x)
|
23.6
|
25.9
|
25.6
|
25.4
|
|
Net dividend yield (%)
|
3.0
|
3.3
|
3.6
|
3.7
|
|
ROAE (%)
|
69.1
|
79.5
|
94.1
|
96.6
|
|
ROAA (%)
|
25.1
|
24.7
|
26.3
|
26.1
|
|
EV/EBITDA (x)
|
19.4
|
19.8
|
18.2
|
17.2
|
|
Net debt/equity (%)
|
20.4
|
47.4
|
42.6
|
37.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR24.24
|
|
Target
Price:
|
MYR21.60
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
MYR1.8b bid for
MP Evans
|
|
By our estimate, the GBP6.40/sh cash offer for MP Evans
translates to a historical acquisition (2015 core) PER of 37.3x, P/BV
of 1.4x (30 June), and an adjusted EV per planted ha of USD13,500
(~MYR56,100). The premium pricing is required to successfully gain
control of MPE. KLK’s FY17 EPS could be marginally diluted post
acquisition. Hence, we are short term Neutral on the deal. HOLD with a
TP of MYR21.60 on unchanged 23x FY17 PER (-1SD of its historical mean).
|
|
|
|
|
|
|
FYE Sep (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
11,130.0
|
13,650.0
|
14,576.7
|
15,970.1
|
|
EBITDA
|
1,728.1
|
1,578.0
|
1,703.3
|
1,826.1
|
|
Core net profit
|
984.8
|
818.7
|
888.4
|
1,000.5
|
|
Core EPS (sen)
|
92.3
|
76.7
|
83.2
|
93.7
|
|
Core EPS growth (%)
|
10.4
|
(16.9)
|
8.5
|
12.6
|
|
Net DPS (sen)
|
55.0
|
45.0
|
49.9
|
56.2
|
|
Core P/E (x)
|
26.3
|
31.6
|
29.1
|
25.9
|
|
P/BV (x)
|
3.3
|
2.7
|
2.5
|
2.4
|
|
Net dividend yield (%)
|
2.3
|
1.9
|
2.1
|
2.3
|
|
ROAE (%)
|
13.0
|
10.0
|
13.8
|
9.3
|
|
ROAA (%)
|
8.0
|
5.4
|
5.0
|
5.4
|
|
EV/EBITDA (x)
|
14.2
|
16.6
|
16.9
|
15.7
|
|
Net debt/equity (%)
|
19.7
|
24.8
|
21.3
|
19.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Price:
|
MYR2.14
|
|
Target
Price:
|
MYR2.35
|
|
Recommendation:
|
Hold
|
|
|
|
|
|
|
|
|
Positives priced
in
|
|
Total outstanding orderbook of MYR2.2b (MYR1.9b
construction, MYR0.3b manufacturing) will provide decent earnings
visibility for the next 1.5-2 years. We revise FY16/FY17/FY18 earnings
upwards after updating the margin assumptions for construction and revising
our job wins assumption for FY17/FY18. New job wins could potentially
come from both construction (KVLRT 3, PPA1M and PR1MA) and
manufacturing (MRT Singapore projects and DTSS 2). However, we believe
the positives have been priced in.
|
|
|
|
|
|
|
FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
|
Revenue
|
1,206.4
|
1,053.6
|
1,086.5
|
1,251.6
|
|
EBITDA
|
90.5
|
112.7
|
125.9
|
118.3
|
|
Core net profit
|
33.8
|
64.4
|
74.6
|
70.6
|
|
Core EPS (sen)
|
11.3
|
21.4
|
24.8
|
23.5
|
|
Core EPS growth (%)
|
(5.3)
|
90.5
|
15.8
|
(5.4)
|
|
Net DPS (sen)
|
3.5
|
6.4
|
6.7
|
6.3
|
|
Core P/E (x)
|
19.0
|
10.0
|
8.6
|
9.1
|
|
P/BV (x)
|
1.6
|
1.4
|
1.3
|
1.1
|
|
Net dividend yield (%)
|
1.6
|
3.0
|
3.1
|
3.0
|
|
ROAE (%)
|
na
|
na
|
na
|
na
|
|
ROAA (%)
|
3.8
|
6.8
|
7.5
|
6.6
|
|
EV/EBITDA (x)
|
5.0
|
4.3
|
5.4
|
5.8
|
|
Net debt/equity (%)
|
23.0
|
14.7
|
7.8
|
8.4
|
|
|
|
|
|
Chew Hann Wong
|
|
|
|
Adrian Wong
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eyes on
Kazakhstan’s black gold prospects
|
|
Shareholders’ will vote on Reach Energy’s (Reach) proposed
USD155m Qualifying Acquisition (QA) of a 60% working interest in
Palaeontol B.V., at its EGM on 4 Nov 2016. A majority in numbers of
voters representing at least 75% of the total value of shares held by
all shareholders present and voting either in person or by proxy is
required to conclude the transaction.
|
|
|
|
|
|
|
FYE Jul (MYR m)
|
FY13A
|
FY14A
|
FY15A
|
FYna
|
|
Revenue
|
0.0
|
0.0
|
0.0
|
na
|
|
EBITDA
|
0.0
|
0.0
|
0.0
|
na
|
|
Core net profit
|
(2.2)
|
(28.4)
|
(22.7)
|
na
|
|
Core EPS (sen)
|
(0.2)
|
(2.2)
|
(8.0)
|
na
|
|
Core EPS growth (%)
|
na
|
nm
|
nm
|
na
|
|
Net DPS (sen)
|
0.0
|
0.0
|
0.0
|
na
|
|
Core P/E (x)
|
nm
|
nm
|
nm
|
na
|
|
P/BV (x)
|
nm
|
nm
|
31.8
|
na
|
|
Net dividend yield (%)
|
0.0
|
0.0
|
0.0
|
na
|
|
ROAE (%)
|
na
|
na
|
na
|
na
|
|
ROAA (%)
|
na
|
(186.5)
|
(5.7)
|
na
|
|
EV/EBITDA (x)
|
na
|
na
|
nm
|
na
|
|
Net debt/equity (%)
|
net cash
|
nm
|
net cash
|
net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACRO RESEARCH
|
|
|
|
|
|
|
|
Economics Research
by
Suhaimi Ilias
|
|
|
|
|
|
|
|
|
|
|
Unemployment rate was stable 3.5% in Aug 2016 and has
been in the 3.4%-3.5% range since Dec 2015. Year-to-date unemployment
rate is 3.4%. Our full-year average jobless rate forecasts are 3.5%
this year (2015: 3.2%) and 3.4% next year.
|
|
|
|
|
|
Suhaimi Ilias
|
|
|
|
Zamros
Dzulkafli
|
|
|
|
|
|
|
|
|
|
|
|
NEWS
|
|
|
Outside Malaysia:
U.S. Consumer confidence retreated more than forecast in
October as households became less upbeat about the economy and labor
market, figures from the New York-based Conference Board showed.
Confidence index decreased to a three-month low of 98.6 (forecast was
101.5) from a revised 103.5. Measure of consumer expectations for the
next six months declined to 83.9 from 87.2. Share of those who said jobs
were currently plentiful decreased to 24.3% from 27.6%. (Source:
Bloomberg)
U.S: Home prices in 20 cities continue rising at steady
pace in August, according to data from S&P CoreLogic Case-Shiller.
The 20-city property values index increased 5.1% YoY from August 2015
(forecast was 5% YoY) after climbing 5% YoY in the year through July. On
a monthly basis, the seasonally adjusted 20-city measure rose 0.2% MoM
from July. (Source: Bloomberg)
Germany: Business confidence in October rose to the
highest level in more than two years, the Munich-based Ifo institute
said. This adds to signs of renewed growth momentum in Europe’s largest
economy, after uncertainty related to the U.K.’s vote to leave the
European Union contributed to a temporary slowdown. Germany’s economic
performance has been the driving force of the euro area’s recovery so
far, and a wide range of indicators suggests it will continue to bolster
output. Business climate index climbed to 110.5 from 109.5 in September.
An index for economic expectations rose to 106.1 from 104.5, while the
evaluation of the current situation also improved to 115 from 114.7.
(Source: Bloomberg)
S. Korea: Consumer confidence in October rises to 101.9
from 101.7 while households’ inflation expectation for next 12 months
unchanged at 2.5%, Bank of Korea says in a statement. Survey based on
responses from 2,013 households across the nation was conducted between
Oct.12-19. A reading below 100 indicates that pessimists outnumber
optimists. (Source: Bloomberg)
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|
|
|
|
|
|
Other News:
KLK: Seeks takeover of AIM-listed plantation group for
GBP360.5m. The country third-largest palm oil producer, has proposed to
acquire MP Evans Group plc which is listed on the Alternative Investment
Market (AIM) of London Stock Exchange for GBP360.5m (MYR1.8b) or 642.25
pence per share. This includes interim dividend of 2.25 pence per share.
According to KLK, the 642.25 pence offer represents a premium of 51% to
the 426.25 pence per share of MP Evans’ closing share price on Monday,
and 54% to its 30-day volume weighted average closing price of 417.4
pence per share. KLK and MP Evans should establish best practices for
further growth of both companies and enables the enlarged group to
capitalize on economics of scale. (Source: The Edge Financial Daily)
Ecofirst: Expects better FY17 with Ampang Ukay, South City
Plaza. The group is anticipating a more positive financial year ending
May 31, 201 (FY17) driven by its Ampang Ukay project and contributions
from its mall, South City Plaza in Seri Kembangan. Ecofirst group chief
executive officer Datuk Tiong Kwing Hee shared that the Ampang Ukay
projects carries a gross development value (GDV) of over MYR5b, which is
expected to be realized over 12 years or more. For FY16, the South City
Plaza mall generated MYR12m revenue for the group. Yesterday, the group
shareholders approve the disposal of its Segamat Mall to Hektar Real
Estate Investment Trust for MYR104m. The group plans to complete the
disposal by May next year. (Source: The Edge Financial Daily)
Vizione: Sees sustainable earnings for FY17. Vizione
expects its earnings for the financial year ending May 31, 2017 (FY17) to
remain sustainable from FY16, anchored by its MYR140m order book of
construction jobs and positive first quarter results, said CFO Simon Lim.
In FY16, Vizione saw a turnaround with a MYR113,000 net profit and
MYR36.71m revenue, mainly from construction activities. Vizione has
identified five People’s Housing Programme projects in Kelantan, Sabah,
Terengganu, Kedah and a property development joint venture project in Sri
Kembangan, but noted that these projects are subject to sufficient funds
being raised from a rights issue exercise with warrants. The rights issue
that will raise MYR73m is expected to be completed by December. (Source:
The Sun Daily)
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