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Share
Price:
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MYR3.16
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Target
Price:
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MYR3.63
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Recommendation:
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Hold
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First foray into
Penang mainland
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We are positive on SPSB’s latest land acquisition in
Penang mainland for its attractive pricing. The 1,675 acres of land,
which carries an estimated GDV of MYR9.6b, is expected to churn out a
net profit of MYR90m p.a. (3.2sen) from 2019 onwards, based on our
estimates. No change to our earnings forecasts and MYR3.63 TP (based on
an unchanged 30% discount to RNAV) for now. We reiterate HOLD on SPSB.
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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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3,810.1
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6,746.3
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5,493.6
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6,244.1
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EBITDA
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1,107.6
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2,063.3
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1,208.6
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1,373.7
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Core net profit
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376.0
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918.3
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705.5
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908.8
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Core EPS (sen)
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14.9
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35.7
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26.6
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34.3
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Core EPS growth (%)
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(17.2)
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140.1
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(25.4)
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28.8
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Net DPS (sen)
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9.7
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23.0
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15.6
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19.0
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Core P/E (x)
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21.3
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8.9
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11.9
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9.2
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P/BV (x)
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1.0
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0.8
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0.7
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0.7
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Net dividend yield (%)
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3.1
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7.3
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4.9
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6.0
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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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2.9
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6.2
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4.0
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4.6
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EV/EBITDA (x)
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10.1
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4.9
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9.4
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8.4
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Net debt/equity (%)
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28.1
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17.2
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15.3
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16.2
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MACRO RESEARCH
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Turning of the tide
by Chew
Hann Wong
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We expect global financial markets to remain highly
volatile in the short term, having priced in a Clinton win in the US
Presidential Election. Trump’s win has triggered uncertainties and
for Malaysia equities, we expect foreign fund flows to turn negative
in reaction. This could be short-lived as capital is expected to flow
back to this part of the world in search for better returns. We
maintain our year-end KLCI target for now, with no change to our
defensive positioning for equities.
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Chew Hann Wong
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Suhaimi Ilias
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NEWS
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Outside Malaysia:
E.U: Trump win adds to Brexit risks as growth forecast
lowered. The European Commission slashed its 2017 economic growth
forecasts for the euro area as it warned of instability caused by the
U.K.’s decision to leave the European Union and the surge of anti-globalization
and populism around the world. The Brussels-based commission said gross
domestic product in the currency bloc will rise by 1.5% next year, 0.3
percentage point lower than it forecast in May. The 19-nation region’s
inflation rate will average 0.3% this year and 1.4% in 2017 and 2018,
well below the European Central Bank’s goal of just below 2%. The
projections were prepared before the U.S. presidential election result
was known. (Source: Bloomberg)
China: Factory gate inflation picked up further last month
while consumer inflation accelerated, suggesting the government’s efforts
to reduce overcapacity have gained some traction. The producer-price
index rose 1.2% YoY in October. The consumer-price index increased 2.1%
YoY, matching the gain forecast by analysts. China’s factories, scorched
by years of rising wages and tepid demand, now face higher raw-material
input costs, forcing some to mull their first price increases in years.
Consumer inflation, pushed up by increasing rents and higher food prices,
remains comfortably within the full-year government ceiling of 3%.
(Source: Bloomberg)
Thailand: Held its key rate for a 12th meeting, preserving
its firepower as growth risks mount following the death of King Bhumibol
Adulyadej and heightened market turmoil in the aftermath of the U.S.
elections. The Bank of Thailand kept its one-day bond repurchase rate at
1.5%, with monetary policy committee members voting unanimously in favor,
it said. (Source: Bloomberg)
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Other News:
Construction: MRT Corp awards two contracts worth
MYR1.57b. Mass Rapid Transit Corporation (MRT Corp) has awarded two
viaduct work package contracts for the construction of the MRT Sungai
Buloh-Serdang-Putrajaya (SSP) Line worth MYR1.57b. WCT secured the work
package V204 for the construction and completion of the viaduct guideway
and other associated works from Bandar Malaysia South Portal to Kampung
Muhibbah worth MYR896.41m. Meanwhile, out of the three tenders submitted
for Work Package V208 for the construction and completion of the viaduct
guideway and other associated works from Taman Pinggiran Putra to
Persiaran Alpine, MTD Construction S/B was the successful bidder with the
contract worth MYR678.68m. (Source: The Sun Daily)
Ekovest: To list highway unit in USD500m IPO. The
construction and property developer, plans to list its highway operating
subsidiary in 2018 in an initial public offering that could raise at
least USD500m (MYR2.12b), a top executive said on Wednesday. The listing
of Ekovest’s unit Konsortium Lebuhraya Utara-Timur (KL) S/B is part of a
plan to strengthen its asset portfolio and financial said the managing
director Datuk Seri Lim Keng Cheng. Cheng said Ekovest and EPF had yet to
determine how much equity stakes both intend to hold in the subsidiary,
post the IPO. (Source: The Star)
Protasco: To launch MYR600m affordable homes in Kajang
township by 2Q17. The group will be launching MYR600m in gross
development value (GDV) of affordable homes at its De Centrum City
township in Kajang by the second quarter of 2017, as the group
capitalises on the strong demand for affordable homes, amid subdued
Malaysian property market. Chong said the group is aiming to launch the
affordable housing portion in two phases, with each phase valued at MYR300m,
on an 8-acre piece of land within the De Centrum township. (Source: The
Edge Financial Daily)
BHIC: Posts 2nd straight quarter of profits in 3Q on
right-sizing initiatives. The group registered its second consecutive
profitable quarter, arising from the group's ongoing transformation
initiative to tighten operational efficiencies coupled with a strong
focus on its core businesses and competencies. Its net profit almost
quadrupled to MYR14.88m or 5.99 sen a share in the third quarter ended
Sept 30, 2016 (3QFY16), from MYR3.94m or 1.59 sen a share a year ago.
BHIC's revenue grew 11.1% to MYR64.31m in 3QFY16 from MYR57.88m in 3QFY1.
(Source: The Edge Financial Daily)
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