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Gamuda (GAM MK)
by Chew
Hann Wong
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Share
Price:
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MYR4.92
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Target
Price:
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MYR5.55
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Recommendation:
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Buy
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MYR2.7b for
SPLASH?
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If true at MYR2.7b price tag for SPLASH, Gamuda will
receive MYR1.08b cash for its 40% stake. That said, we expect the
resolution to take a bit more time to iron out the issues. We maintain
our earnings forecasts, and BUY call on Gamuda with an unchanged MYR5.55
RNAV-based TP.
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FYE Jul (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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2,399.9
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2,121.9
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3,357.0
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3,889.8
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EBITDA
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638.0
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548.5
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764.4
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824.3
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Core net profit
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682.1
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626.1
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720.0
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761.0
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Core EPS (sen)
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28.9
|
26.0
|
29.8
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31.5
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Core EPS growth (%)
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(6.6)
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(10.2)
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14.5
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5.7
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Net DPS (sen)
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12.0
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12.0
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12.0
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12.0
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Core P/E (x)
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17.0
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18.9
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16.5
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15.6
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P/BV (x)
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1.8
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1.7
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1.6
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1.5
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Net dividend yield (%)
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2.4
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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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5.8
|
4.6
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4.9
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4.8
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EV/EBITDA (x)
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23.4
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29.0
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22.0
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20.0
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Net debt/equity (%)
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47.9
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55.2
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58.9
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50.0
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Share
Price:
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MYR2.48
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Target
Price:
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MYR2.48
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Recommendation:
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Hold
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Launch of
Avengers & Dimsum
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Leveraging on Marvel’s strong brand and immense
popularity, we believe 64%-owned Cityneon’s first Marvel’s Avengers
S.T.A.T.I.O.N. exhibition in Singapore, launched on 29 Oct, will be
very well received. Separately, details of STAR’s new venture, an OTT VOD
content service called Dimsum that will provide exclusive Asian
content, to be launched on 8 Nov, are scant for now. We maintain our
earnings forecasts.
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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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1,013.7
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1,019.0
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1,023.7
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1,071.5
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EBITDA
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242.3
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211.2
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176.8
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188.7
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Core net profit
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151.5
|
131.9
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105.9
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118.5
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Core EPS (sen)
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20.5
|
17.9
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14.4
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16.1
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Core EPS growth (%)
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4.8
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(12.9)
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(19.7)
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11.9
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Net DPS (sen)
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18.0
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18.0
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18.0
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18.0
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Core P/E (x)
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12.1
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13.9
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17.3
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15.4
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P/BV (x)
|
1.6
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1.6
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1.6
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1.7
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Net dividend yield (%)
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7.3
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7.3
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7.3
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7.3
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ROAE (%)
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9.7
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11.6
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11.2
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10.7
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ROAA (%)
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9.0
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7.8
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6.4
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7.6
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EV/EBITDA (x)
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5.7
|
6.8
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8.8
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8.3
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Net debt/equity (%)
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net cash
|
net cash
|
net cash
|
net cash
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Samuel Yin Shao
Yang
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Jade Tam
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Ta Ann (TAH MK)
by Chee
Ting Ong
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Share
Price:
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MYR3.50
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Target
Price:
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MYR3.75
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Recommendation:
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Hold
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Meeting with CEO
& Chairman
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We revised Ta Ann’s purchase cost of Agrogreen to
~MYR65,700/planted ha (+17%) following recent NDR with top management.
While LT positive given its property development potential, it is
likely to be EPS dilutive over the next 3 years. We are keeping our earnings
forecasts for now. HOLD with an unchanged TP of MYR3.75 on 15x 2016
PER.
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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
|
1,020.7
|
1,046.8
|
1,009.5
|
1,081.0
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EBITDA
|
243.2
|
323.9
|
249.8
|
265.7
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Core net profit
|
110.6
|
185.9
|
111.0
|
120.7
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Core EPS (sen)
|
24.9
|
41.8
|
25.0
|
27.1
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Core EPS growth (%)
|
82.6
|
68.1
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(40.3)
|
8.7
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Net DPS (sen)
|
16.7
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16.7
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11.2
|
12.2
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Core P/E (x)
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14.1
|
8.4
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14.0
|
12.9
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P/BV (x)
|
1.5
|
1.3
|
1.3
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1.2
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Net dividend yield (%)
|
4.8
|
4.8
|
3.2
|
3.5
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ROAE (%)
|
11.9
|
17.5
|
9.2
|
9.5
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ROAA (%)
|
6.0
|
9.6
|
5.6
|
6.2
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EV/EBITDA (x)
|
6.9
|
6.3
|
6.8
|
6.4
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Net debt/equity (%)
|
18.1
|
12.0
|
8.8
|
7.5
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Share
Price:
|
MYR15.44
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Target
Price:
|
MYR17.10
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Recommendation:
|
Hold
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Sale of HLA
falls through
|
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That the prospective sale of Hong Leong Assurance (HLA)
has fallen through is unfortunate, but it has little bearing on the
fundamentals on the group and our valuations, which we maintain. We
continue to value HLFG on a sum-of-parts basis, with an unchanged TP of
MYR17.10. HOLD.
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FYE Jun (MYR m)
|
FY15A
|
FY16A
|
FY17E
|
FY18E
|
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Operating income
|
4,490.9
|
4,543.3
|
4,783.5
|
5,045.1
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Pre-provision profit
|
2,490.7
|
2,258.9
|
2,557.0
|
2,732.6
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Core net profit
|
1,543.6
|
1,489.5
|
1,540.9
|
1,618.4
|
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Core FDEPS (MYR)
|
1.48
|
1.43
|
1.48
|
1.55
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Core FDEPS growth(%)
|
(9.6)
|
(3.5)
|
3.5
|
5.0
|
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Net DPS (MYR)
|
0.38
|
0.38
|
0.39
|
0.41
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Core FD P/E (x)
|
10.4
|
10.8
|
10.5
|
10.0
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P/BV (x)
|
1.2
|
1.2
|
1.1
|
1.0
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Net dividend yield (%)
|
2.5
|
2.5
|
2.5
|
2.7
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Book value (MYR)
|
12.45
|
13.37
|
14.31
|
15.31
|
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ROAE (%)
|
12.6
|
10.5
|
9.7
|
9.5
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ROAA (%)
|
0.8
|
0.7
|
0.7
|
0.7
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SECTOR RESEARCH
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FPSO: Current status & outlook
by Thong
Jung Liaw
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We remain positive on the FPSO segment despite the
setbacks (i.e. lower utilization, reduced new orders) faced during
this cyclical downturn. Cost optimization is high on the agenda.
Redeployment opportunities and JVs are practical solutions. Two out
of three tenders are redeployments and companies with such asset and
stronger financials will benefit. We remain BUYers of Yinson (YNS MK;
TP: MYR4.35) and Bumi Armada (BAB MK; TP: MYR1.05) in this space.
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Thong Jung
Liaw
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Yupapan
Polpornprasert
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MACRO RESEARCH
|
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External Demand vs Domestic Demand
by
Suhaimi Ilias
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Exports and imports in Sep 2016 fell –3.0% YoY (Aug
2016: +1.5% YoY) and –0.1% YoY (Aug 2016: +4.9% YoY) while trade
surplus narrowed slightly yo +MYR7.6b (Aug 2016: +MYR8.5b). External
demand was a drag on 3Q 2016 GDP as trade surplus shrank further (3Q
2016: –19.7% YoY; 2Q 2015: -8.4% YoY), but domestic demand was
supported by especially by investment on faster growth in imports of
capital goods (3Q 2015: +15.2% YoY; 2Q 2016: +10.2% YoY).
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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: May is steadfast on Brexit timing as schism deepens.
Theresa May insisted Britain’s exit from the European Union won’t be
obstructed by judges or lawmakers as the backlash after last week’s
constitutional ruling deepened the country’s political schism. May said
her government had a strong legal case to make on appeal. “While others
seek to tie our negotiating hands, the government will get on with the
job of delivering the decision of the British people,” the prime minister
said in the Sunday Telegraph, her first public remarks since the High
Court declared that lawmakers should vote on the start of negotiations
with the EU. “MPs and peers who regret the referendum result need to
accept what the people decided.” (Source: Bloomberg)
U.K. Companies see faster growth before Brexit slowdown:
CBI. U.K. companies expect their expansion to accelerate over the next
three months before the fallout from the Brexit vote starts to hit,
according to a survey by the Confederation of British Industry. Recent
growth has been led by manufacturing and distribution, with the former
benefiting from the pound’s decline, the CBI said in a report published.
Services remained flat. It sees investment and consumption starting to
weaken next year on concern that negotiations to leave the EU will hurt
trade and fan inflation. (Source: Bloomberg)
China: Monetary policy is ‘prudent’, Prime Minister Li
says. “We do not print too much money or resort to sweeping stimulus
measures, we focus on structural reforms,” China’s Prime Minister Li
Keqiang says at conference in Riga, Latvia. “On the fiscal side, the
risks are under control because the debt ratio of the central government
is quite low”. The premier sees “no basis” for long-term yuan
depreciation. China plans to use yuan for financing, lending for projects
involving central, Eastern Europe. (Source: Bloomberg)
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Other News:
Tiong Nam: To launch new route to China. Johor based Tiong
Nam Logistics Holdings which saw its share price climb to an all-time
high of MYR1.76 last Tuesday is set to embark on a new route to China in
January next year. Tiong Nam managing director and founder Ong Yoong
Nyock sees growing demand for its services, as Beijing’s “One Belt, One
Road” policy is expected to boost business activities between China and
Southeast Asia. As such, the group in September set up its first
transport hub in Guangzhou. (Source: The Edge Financial Daily)
Titijaya Land: Looks to construction for new growth. While
Titijaya Land has denied that China Railway Group Ltd (CREC) is acquiring
shares in the company to build up a strategic stake, it will be signing a
deal with Chinese construction company tomorrow in relation to what has
termed as “a potential development project collaboration”. Though it is
yet to be revealed what the deal may entail, Titijaya group managing
director Tan Sri Lim Soon Peng said that the company is ready to tied up
with CREC’s Malaysian unit, China Railway Engineering Corp S/B to bid for
and undertake upcoming infrastructure projects in the country. The move
is part of the pure property developer’s aspirations to diversify into
construction sector. (Source: The Edge Financial Daily)
Prasarana: Said to buy Penang ferry ops. Penang Port S/B
(PPSB) , operator of the oldest port in the country, may have finally
found a buyer for its loss-making ferry operations linking Penang Island
to Butterworth. Prasarana is buying the iconic ferry services. However,
it is not known how much the public transport service operator will pay
for the operations. According to sources close to the situation, the
disposal is expected to synchronize with the completion of a MYR200m
stake sale of PPSB to MMC Corp in 1Q17. The loss-making ferry service had
also been stumbling block to PPSB’s intital public offering. However,
doing away with the iconic ferry service is definitely a no-no since it
is regarded a as one of Penang’s most famous heritage entities. In 1994,
PPSB signed a concession agreement with Penang port Commission to operate
the ferry service and Penang Port. (Source: The Edge Financial Daily)
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