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Share
Price:
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MYR1.05
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Target
Price:
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MYR1.10
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Recommendation:
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Hold
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Hit by double
whammy
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It has not been a good year for UEMS thus far. Firstly, it
is affected by the slowdown in the domestic property market and the
delay in launching its Melbourne project, which led to a 33% downward
revision in sales target to MYR1b for 2016 (announced in Aug 2016).
Secondly, it is hit by an unexpected additional tax and tax penalty
claimed by IRB. We lower our earnings forecasts by -0.3% to -37% to
factor in the additional tax payment. Our RNAV-TP is largely unchanged
at MYR1.10. Reiterate HOLD.
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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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2,661.7
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1,749.9
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1,531.6
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1,547.3
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EBITDA
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527.1
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299.6
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350.2
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383.8
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Core net profit
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479.9
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257.2
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126.8
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216.5
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Core FDEPS (sen)
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10.6
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5.2
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2.6
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4.4
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Core FDEPS growth(%)
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(18.8)
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(51.1)
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(50.7)
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70.8
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Net DPS (sen)
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3.0
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1.6
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0.8
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1.3
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Core FD P/E (x)
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9.9
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20.3
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41.2
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24.1
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P/BV (x)
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0.8
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0.7
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0.7
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0.7
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Net dividend yield (%)
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2.9
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1.5
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0.7
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1.2
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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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4.6
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2.2
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1.1
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1.7
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EV/EBITDA (x)
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16.1
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24.0
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19.6
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17.8
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Net debt/equity (%)
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23.7
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24.3
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23.8
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22.8
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NEWS
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Outside Malaysia:
Germany: Factory orders unexpectedly declined in
September, reflecting a slowdown in growth over the summer months in
Europe’s largest economy. Orders, adjusted for seasonal swings and
inflation, fell 0.6% from August, when they rose a revised 0.9%, data from
the Economy Ministry showed. Orders gained 2.6% YoY. (Source: Bloomberg)
U.K: House prices rose for a second month in October,
helped in part by an ongoing lack of supply of properties for sale.
Mortgage lender Halifax said values rose 1.4% compared with a month
earlier as the stock of homes available remained around a record low.
From a year earlier, values in the three months to October were 5.2% YoY
higher. That’s far below a peak of 10% annual growth in March this year,
but still “robust,” it said in a statement. The monthly increase lifted
average values to GBP 217,411 (USD 269,500). (Source: Bloomberg)
China: FX reserves drop most since January as a stronger
dollar helped spur capital outflow pressures and shaved the value of the
stockpile. Reserves decreased USD 45.7b to USD 3.12t in October, the
People’s Bank of China said. (Source: Bloomberg)
Indonesia: Economy grew in line with forecasts in 3Q 2016
as President Joko Widodo seeks to spur the nation onto a higher growth
path. GDP increased 5.02% YoY last quarter, compared with a revised 5.19%
YoY in the second quarter, the statistics bureau said. GDP rose 3.2% QoQ
in the third quarter from the previous three months. (Source: Bloomberg)
Crude Oil: Holds near USD 45/bbl before U.S. election as supplies
seen rising. Oil traded near USD 45/bbl as voters prepare to go to the
polls for the U.S. presidential election before weekly government data
forecast to show crude stockpiles expanded. Equities in Australia and New
Zealand extended gains as opinion polls showed Hillary Clinton ahead of
Donald Trump. Crude inventories climbed by 1.5m barrels last week,
according to a Bloomberg survey before a report from the Energy
Information Administration on Wednesday. (Source: Bloomberg)
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Other News:
NWP: Ventures into construction with a MYR22m contract.
Its wholly-owned subsidiary NWP Builder S/B has been appointed as the
main contractor of Listari Marina (MM2H) S/B’s proposed development of
serviced suites in Malacca for MYR22m. The loss-making timber product
manufacturer, which has been exploring additional business opportunities
to strengthen its financial position, said the agreement was for the
construction of a nine-storey tower block with 160 units of serviced
suites in Pekan Klebang. (Source: The Star)
UDA: In joint venture to redevelop Pulau Jerejak resort.
The group has entered into a joint-venture agreement with Q Islands
Development S/B (QID) to redevelop Jerejak Rainforest Resort & Spa
and 80 acres of land surrounding it into a mixed development which will
have a bridge linking Pulau Jerejak to the main island, 1,200 residential
units and a theme park, among others.The redevelopment master plan has
already been approved by the Penang government and redevelopment work is
expected to start in the fourth quarter of 2017 and completed within
eight to 10 years. UDA did not disclose the redevelopment cost of the
property. The resort was closed in May this year after accumulating
“heavy losses” since establishment in 2004. (Source: The Sun Daily)
New Hoong Fatt: 3Q net profit up 22%, pays 3 sen dividend.
The group net profit jumped 22.4% to MYR6.41m or 8.53 sen a share for the
third quarter ended Sept 30, 2016 (3QFY16) from MYR5.24m or 6.97 sen a
share a year ago, on fair value gain on its investment properties
amounting to MYR900,000 recognised in the current quarter under review.
Revenue rose 2.5% to RM54.48 million in 3QFY16 from MYR53.17m in 3QFY15,
mainly due to higher demand in the local market. The automotive
replacement parts manufacturer also declared an interim dividend of 3 sen
per share amounting to MYR2.25m for the financial year ending Dec 31,
2016 (FY16), payable on Dec 16. (Source: The Edge Financial Daily)
Scicom: 1Q profit up 24% on higher billings. Scicom
recorded a 23.6% Year-on-Year (YoY) jump in net profit to MYR11.9m for
the 1QFY17 mainly driven by higher billings from its business process
outsourcing (BPO) segment. Likewise, revenue rose 16.3% YoY to MYR52.1m,
from MYR44.8m in the correspondence quarter last year. Revenue showed a
slight 3.03% Quarter-on-Quarter (QoQ) decline from MYR53.7m but net
profit rose 8.16% QoQ, up from MYR11.1m. Scicom declared a first interim
dividend of two sen, payable Dec 7. (Source: The Edge Financial Daily)
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