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Share
Price:
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MYR1.93
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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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Asset
monetisation exercise
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We are positive on WCT’s sale of its ‘Ascent’ office tower
to EPF given the offer price of MYR347m which we deem as fair. WCT’s
cash proceed from the sale of e.MYR243m based on its 70% stake in Jelas
Puri S/B, we estimate, would improve net gearing level from 0.81x as of
end-June 2016 to 0.72x upon completion. We expect more asset
monetisation in the near-term as WCT has previously mentioned on plans
to sell MYR500m worth of total assets as part of its deleveraging
strategy.
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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
|
1,667.9
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2,250.2
|
2,400.5
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EBITDA
|
147.5
|
145.7
|
242.0
|
256.9
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Core net profit
|
112.3
|
129.3
|
134.8
|
146.5
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Core EPS (sen)
|
10.3
|
11.3
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11.2
|
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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18.8
|
17.1
|
17.2
|
15.8
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P/BV (x)
|
0.9
|
0.8
|
0.9
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0.8
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Net dividend yield (%)
|
3.2
|
2.2
|
2.2
|
2.2
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ROAE (%)
|
na
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na
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na
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na
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ROAA (%)
|
1.9
|
2.0
|
1.9
|
2.0
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EV/EBITDA (x)
|
21.6
|
27.1
|
18.0
|
17.2
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Net debt/equity (%)
|
64.9
|
77.9
|
72.8
|
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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MYR6.31
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Target
Price:
|
MYR6.52
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Recommendation:
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Hold
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Strategic tie-up
in China with TIG
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IHH is forming a strategic partnership with Taikang
Insurance Group (TIG) via divestment of its 29.9% stake in PCH Holding
Pte Ltd (PCH), the holding entity for IHH’s China portfolio, for
CNY1.1b or MYR689.6m. This deal should be long-term positive as it enables
IHH to: 1) leverage on TIG’s clients; 2) access funding for future
projects; and 3) reduce potential consolidation of start-up losses of
new projects. Earnings dilution of 2% is minimal. Maintain HOLD and
SOTP TP of MYR6.52.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
|
FY17E
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Revenue
|
7,344.0
|
8,455.5
|
10,547.2
|
12,281.2
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EBITDA
|
1,943.0
|
2,218.7
|
2,473.3
|
2,844.5
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Core net profit
|
785.0
|
899.2
|
858.1
|
1,016.8
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Core FDEPS (sen)
|
9.5
|
10.9
|
10.4
|
12.3
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Core FDEPS growth(%)
|
28.5
|
14.5
|
(5.2)
|
18.5
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Net DPS (sen)
|
3.0
|
3.0
|
3.0
|
3.5
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Core FD P/E (x)
|
66.1
|
57.7
|
60.9
|
51.4
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P/BV (x)
|
2.7
|
2.3
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2.3
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2.2
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Net dividend yield (%)
|
0.5
|
0.5
|
0.5
|
0.6
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ROAE (%)
|
na
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na
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na
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na
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ROAA (%)
|
2.8
|
2.8
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2.4
|
2.7
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EV/EBITDA (x)
|
22.1
|
27.4
|
24.3
|
21.2
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Net debt/equity (%)
|
8.5
|
19.3
|
23.1
|
22.6
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Share
Price:
|
MYR1.96
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Target
Price:
|
MYR1.80
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Recommendation:
|
Hold
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3Q16 results
preview
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Ahead of its results release on 22 Nov, we forecast FGV’s
3Q16 core net profit to return to the black at ~MYR70m, but still
insufficient to reverse 1H16 core losses of MYR75m. Higher YoY CPO ASP
offsets decline in FFB output in 3Q16 while its sugar division will
likely suffer from high raw sugar prices. Keeping our HOLD, EPS
forecasts, MYR1.80 TP on 1x P/BV.
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FYE Dec (MYR m)
|
FY14A
|
FY15A
|
FY16E
|
FY17E
|
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Revenue
|
16,434.3
|
15,669.7
|
16,130.9
|
16,354.4
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EBITDA
|
1,293.9
|
957.4
|
978.3
|
1,180.3
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Core net profit
|
95.7
|
(171.8)
|
140.3
|
251.6
|
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Core EPS (sen)
|
2.6
|
(4.7)
|
3.8
|
6.9
|
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Core EPS growth (%)
|
545.6
|
nm
|
nm
|
79.4
|
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Net DPS (sen)
|
10.0
|
4.0
|
2.3
|
4.1
|
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Core P/E (x)
|
74.7
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nm
|
51.0
|
28.4
|
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P/BV (x)
|
1.1
|
1.1
|
1.1
|
1.1
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Net dividend yield (%)
|
5.1
|
2.0
|
1.2
|
2.1
|
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ROAE (%)
|
5.2
|
0.7
|
2.2
|
3.8
|
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ROAA (%)
|
0.5
|
(0.8)
|
0.7
|
1.2
|
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EV/EBITDA (x)
|
9.0
|
12.4
|
13.4
|
11.4
|
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Net debt/equity (%)
|
13.6
|
34.3
|
36.6
|
37.7
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MACRO RESEARCH
|
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Slowdown arrested
by
Suhaimi Ilias
|
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Real GDP growth picked up to +4.3% YoY in 3Q 2016 (2Q
2016: +4.0% YoY) after five straight quarters of slowdown on
sustained momentum in consumer spending growth and turnaround in net
external demand. No change in our 2016 and 2017 growth forecasts of
+4.1% and +4.5%.
|
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Suhaimi Ilias
|
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Zamros
Dzulkafli
|
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Still got the current account surplus
by
Suhaimi Ilias
|
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Current account surplus rose in 3Q 2016 to +MYR6.0b or
+1.9% of GDP (2Q 2016: +MYR1.9b or +0.6% of GDP) on improved goods
account surplus which offset the larger deficits in services and
income accounts. Current account surplus was +MYR12.9b or 1.4% of GDP
for Jan-Sep 2016. Our full-year forecast is +MYR14.9b or +1.2% of GDP
and we expect to continue next year at +MYR16.1b or +1.3% 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.K. Consumer spending rose in October, Visa says. U.K.
consumer spending rose 2.5% YoY in October, up from a 2.3% YoY gain in
September, according to Visa. E-commerce spending increased +4.3% YoY,
while face-to-face expenditure expanded for first time in three months
(+1.8% YoY). Growth was led by Hotels, Restaurants & Bars (+9.0% YoY)
and Recreation & Culture (+7.4% YoY) while spending on Clothing &
Footwear rose at quickest rate since Sep 2015 (+4.7% YoY). Talk of potential
price rises doesn’t appear to have dented consumers’ confidence, says
Kevin Jenkins, Managing Director U.K. & Ireland at Visa Europe, in
e-mailed statement (Source: Bloomberg)
Japan: Exports drive economy to unexpectedly strong
growth. Japan’s economy expanded more than forecast in 3Q 2016, with a
rebound in exports compensating for weak spending by people and
companies. GDP expanded by an annualized 2.2%, according to data released
by the Cabinet Office. (median estimate of economists +0.8%). Private
consumption rose 0.1% while business spending was unchanged. Net exports,
or shipments less imports, added 0.5 percentage point to GDP. (Source:
Bloomberg)
Crude Oil: Holds losses near seven-week low as Iran lifts
production. Oil held losses near the lowest close in seven weeks as Iran
boosted output and as U.S. explorers raised the number of active rigs to
the most since February, signaling the persistence of a global supply
glut. Output from three western Iranian fields rose to about 250,000
barrels a day from 65,000 barrels in 2013, faster than expected, the oil
ministry’s news service Shana reported. U.S. rigs targeting crude rose by
2 to 452 last week, according to Baker Hughes Inc. data, as increased
drilling efficiency has allowed explorers to continue expanding oilfield
work. Brent for January settlement was at USD 44.86/bbl a barrel on the
London-based ICE Futures Europe exchange. (Source: Bloomberg)
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Other News:
IOI Properties: Lands Singapore site with record SGD2.57b
bid. Its wholly owned subsidiary Wealthy Link Pte Ltd has won a tender
for a 1.09ha piece of land in Singapore for SGD2.57b (MYR7.77b) in a
record-breaking transaction. The land is strategically located with a
prominent frontage along Central Boulevard and Raffles Quay-Shenton Way,
the two key roads within Marina Bay and the Central Business District
(CBD) of Singapore. Worth noting is that IOI Properties beat six other
tenderers, including Temasek-owned Mapletree Investments, Hongkong
Land-Cheung Kong and CapitaLand. (Source: The Sun Daily)
ELK-Desa: To raise MYR59.84m through rights issue. The
company proposes to undertake a renounceable rights issue exercise to
raise up to MYR59.84m. The proposed rights issue entails an issuance of
up to 51.59 million rights shares on the basis of one rights share for
every five existing shares held, with an issue price of MYR1.16 per
rights share. Proceeds raised will be used for the purpose of the hire
purchase disbursements of its wholly owned subsidiary ELK-Desa Capital
S/B. (Source: The Sun Daily)
DBS Gurney: Renews supply contracts with KFC, QSR. Poultry
company DBE Gurney Resources’s unit DBE Poultry S/B has renewed its
contracts worth MYR50m with KFC (Peninsular Malaysia) S/B and QSR Stores
S/B for the supply of poultry products. The group said the renewals are
effective from Jan 1, 2017 to Dec 31, 2017. The agreements are expected
to generate a turnover of about MYR50m for DBE Gurney, it added. (Source:
The Sun Daily)
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