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Share
Price:
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MYR1.75
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Target
Price:
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MYR2.30
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Recommendation:
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Buy
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Major
shareholder change
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We view the major shareholder change at WCT positively,
expecting a value unlocking exercise over the medium term. At MYR2.50
per share, this is 9% above our SOP-based TP and should help the stock
to re-rate, although the 19.7% block falls short of triggering a GO. A
potential value unlocking cum asset streamlining exercise could also
help to strengthen WCT’s balance sheet. We maintain our BUY call on the
stock.
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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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1,662.2
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1,667.9
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2,250.2
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2,400.5
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EBITDA
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147.5
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145.7
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242.0
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256.9
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Core net profit
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112.3
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129.3
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134.8
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146.5
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Core EPS (sen)
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10.3
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11.3
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11.2
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12.2
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Core EPS growth (%)
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(44.9)
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9.6
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(0.4)
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8.7
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Net DPS (sen)
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6.2
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4.2
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4.2
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4.2
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Core P/E (x)
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17.0
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15.5
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15.6
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14.3
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P/BV (x)
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0.9
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0.8
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0.8
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0.8
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Net dividend yield (%)
|
3.5
|
2.4
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2.4
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2.4
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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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1.9
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2.0
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1.9
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2.0
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EV/EBITDA (x)
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21.6
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27.1
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17.1
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16.4
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Net debt/equity (%)
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64.9
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77.9
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72.8
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72.2
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Chew Hann Wong
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Adrian Wong
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Share
Price:
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MYR3.20
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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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Kencana Capital
exits
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The special DPS of 14.6sen will go ex on 3 Nov 2016, and
translates to a 4.6% yield. Shareholding-wise, EPF has raised its stake
to 13.9% (+3.8-ppts) post the secondary placement exercise, which saw
the exit of Kencana Capital (13.9%). Yinson remains a growth stock and
a strong prospect for new growth beyond FY18. Turning 2 tenders into
job wins is a re-rating catalyst, a prospect not factored in by the
market yet. Our SOP-based TP offers a 36% upside.
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FYE Jan (MYR m)
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FY15A
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FY16A
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FY17E
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FY18E
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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
|
225.4
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261.0
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288.5
|
417.8
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Core net profit
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142.6
|
173.1
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184.2
|
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
|
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)
|
23.2
|
19.7
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18.5
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15.5
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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 (%)
|
0.6
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0.6
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0.6
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0.8
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ROAE (%)
|
24.0
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12.0
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7.9
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8.7
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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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15.1
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15.6
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16.5
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11.4
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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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Share
Price:
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MYR1.36
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Target
Price:
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MYR1.49
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Recommendation:
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Buy
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Beats MYR3b
sales target?
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ECW will very likely beat its internal sales target of
MYR3b for 2016 in view of the decent booking rates of 50-96% at its
recent five new property launches in the Klang Valley, Penang and
Iskandar Malaysia. This is despite the slowdown in the local housing
market. No change to our 2016 sales assumption of MYR3.1b. We maintain
our earnings forecasts and MYR1.49 RNAV-TP (on 40% discount to MYR2.48
RNAV). We like ECW’s market leading position. Maintain BUY.
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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
|
148.4
|
1,712.1
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3,695.5
|
4,763.1
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EBITDA
|
42.3
|
411.9
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605.2
|
787.1
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Core net profit
|
7.2
|
44.0
|
134.9
|
253.1
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Core FDEPS (sen)
|
2.8
|
2.6
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4.6
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8.6
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Core FDEPS growth(%)
|
(70.4)
|
(6.9)
|
73.0
|
87.6
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Net DPS (sen)
|
0.0
|
0.0
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0.5
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0.9
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Core FD P/E (x)
|
48.0
|
51.5
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29.8
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15.9
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P/BV (x)
|
1.1
|
1.0
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0.8
|
1.0
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Net dividend yield (%)
|
0.0
|
0.0
|
0.4
|
0.6
|
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ROAE (%)
|
2.2
|
2.5
|
3.9
|
6.4
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ROAA (%)
|
1.2
|
1.2
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1.6
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2.3
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EV/EBITDA (x)
|
15.8
|
8.4
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8.4
|
6.7
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Net debt/equity (%)
|
60.5
|
37.5
|
37.8
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30.4
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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On track to meet
2016’s target…?
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Budget deficit was -0.6% of GDP in 3Q 2016 compared
with -5.0% of GDP in 2Q 2016. The budget deficit in Jan-Sep 2016 was
-3.8% of GDP. To recap, the full-year target is -3.1% of GDP.
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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: Manufacturing expands at modest pace as orders
moderate. America’s factories barely expanded last month as faster
production cushioned a slowdown in orders that signals the manufacturing
sector is plodding along. The Institute for Supply Management’s index
rose to 51.9 in October from 51.5 the previous month, figures from the
Tempe, Arizona-based group showed. The report represents a pattern
throughout the year of “rather slow growth, and yet it’s starting to feel
a little more consistent,” Bradley Holcomb, chairman of the ISM factory
survey, said on a conference call with reporters. It is “a good sign for
the fourth quarter,” he said, adding orders are still “in good shape” at
the current level. (Source: Bloomberg)
U.S: Auto sales slow as eases from peak to ‘pretty good’
market. Automakers reported lower U.S. sales for October, reinforcing the
idea the market may have plateaued at a healthy level that still supports
the U.S. economy. The companies faced a difficult comparison to the year-
earlier month, which was the best of 2015 and had two more sales days.
Sales fell 4.4% to 1.39 million vehicles in October, Autodata Corp.
reported on its website, after including an estimate for Ford Motor Co.’s
results expected later this week. (Source: Bloomberg)
China: Official factory gauge rose to the highest since
July 2014, led by new orders, suggesting the economy’s stabilization
continued into the fourth quarter as robust consumption underpins demand.
Manufacturing purchasing managers index rose to 51.2 in October, the
National Bureau of Statistics said, from 50.4 in the prior two months.
Non-manufacturing PMI rose to 54 from 53.7 in September. Separate PMI
reading from Caixin Media and Markit Economics rose to 51.2, also beating
estimates and climbing to a two-year high. (Source: Bloomberg)
China: Demand for cash in money market sank to an
eight-month low in October as the central bank intensified efforts to
reduce leverage in the financial system. Transactions of overnight
repurchase agreements in October tumbled 18% from a month earlier to CNY
32t (USD 4.7t), according to National Interbank Funding Center data.
Turnover is down for a second month, after reaching a record CNY 52t in
August amid speculation investors were borrowing money to invest in an unprecedented
bond rally. (Source: Bloomberg)
S. Korea: Exports continued to slump in October as Samsung
Electronics ended production of its Galaxy Note 7 and a strike by auto
workers slowed production of cars. Inflation accelerated at the fastest
pace since February, but was again below the central bank’s 2% target, as
it has been all year. Exports declined 3.2% YoY in October while imports
fell 5.4% YoY. Consumer prices increased 1.3% YoY in October. (Source:
Bloomberg)
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Other News:
Construction: Malaysia, China seal MYR55b ECRL deal.
Malaysia has sealed the deal to build the East Coast Rail Link (ECRL)
with China Communication Construction Company Ltd (CCCC), with financing
via soft loans from Export-Import (Exim) Bank of China. The project,
estimated to cost MYR55b, is one of the high-impact projects under the
11th Malaysia Plan. When completed, the 620km ECRL will make products
from the East Coast more competitive due to cheaper transport costs, and
raise the income of industries and businesses located along the rail link
route. The project will have three phases - from Port Klang to the
Integrated Transport Terminal (ITT)in Gombak; from ITT Gombak to Dungun;
and from Dungun to Tumpat. The government hopes to finalise the ECRL by end
of this year so that construction on the project can start in early 2017.
(Source: New Straits Times)
George Kent: Bags MYR277m contract to build hospital in
Selangor. The group has received a letter of award from the Public Works
Department (JKR) to design and build a 150-bed Hospital in Tanjung
Karang, Selangor, for MYR277.2m. The company said the hospital was to be
constructed on a 6.88ha site facing the main trunk road between Tanjung
Karang and Kuala Selangor. It will take 48 months to build and is scheduled
for completion by November 2020. (Source: The Star)
Heitech Padu: Gets MYSIKAP maintenance contract for
MYR79.8m. The total business solutions services provider has bagged a
two-year contract worth MYR79.8m from the Road Transport Department (JPJ)
to maintain the MYSIKAP system. MySIKAP is an online portal by JPJ which
enables the public to perform transactions involving motor vehicle and
driver licensing. (Source: The Edge Financial Daily)
Mitrajaya: Wins MYR74m PJ Sentral job. The company has been
awarded a MYR74.31m construction contract by MRCB Builders S/B. The award
is for superstructure works for Tower 3 at a mixed office block
development at PJ Sentral, Petaling Jaya.The contract starts on Dec 9,
2016 and work is expected to be completed by Feb 9, 2018. It is expected
to contribute positively to the future earnings of Mitrajaya. (Source:
The Sun Daily)
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