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Share
Price:
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MYR13.94
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Target
Price:
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MYR16.40
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Recommendation:
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Buy
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International
aspirations 3
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This represents Tenaga’s third bite-size international
acquisition after transactions in Turkey and India. Financial details
are again lacking, and the potential GBP86m cash outlay similarly has
minimal impact on Tenaga’s balance sheet health. No change to our
earnings forecasts. Reiterate BUY with an unchanged TP of MYR16.40.
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FYE Aug (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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43,286.8
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44,531.5
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48,470.6
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49,809.9
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EBITDA
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13,921.8
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14,794.2
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15,566.9
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15,927.0
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Core net profit
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7,050.7
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7,725.8
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7,549.6
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7,665.7
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Core EPS (sen)
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124.9
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136.9
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133.8
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135.8
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Core EPS growth (%)
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29.9
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9.6
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(2.3)
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1.5
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Net DPS (sen)
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29.0
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32.0
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40.1
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40.7
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Core P/E (x)
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11.2
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10.2
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10.4
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10.3
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P/BV (x)
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1.7
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1.5
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1.4
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1.2
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Net dividend yield (%)
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2.1
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2.3
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2.9
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2.9
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ROAE (%)
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13.5
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14.8
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13.7
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12.7
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ROAA (%)
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6.2
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6.2
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5.6
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5.5
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EV/EBITDA (x)
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5.7
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6.8
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6.3
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6.0
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Net debt/equity (%)
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33.3
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32.6
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33.7
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27.8
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Share
Price:
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MYR2.60
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Target
Price:
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MYR3.00
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Recommendation:
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Buy
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Base tariff
read-through
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Our analysis of GMB’s recently announced base tariff
schedule suggests that GMB’s profitability had not been adversely
impacted as it enters into the first regulatory period of the IBR
regime. If true, this would remove a major overhang on the stock, thus possibly
triggering a re-rating. Reiterate BUY with an unchanged MYR3.00 TP.
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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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2,773.5
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3,619.0
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4,112.2
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4,903.2
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EBITDA
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258.1
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191.0
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250.2
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258.2
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Core net profit
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167.6
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106.2
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144.3
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155.5
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Core EPS (sen)
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13.1
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8.3
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11.2
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12.1
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Core EPS growth (%)
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(2.2)
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(36.7)
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36.0
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7.7
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Net DPS (sen)
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13.1
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8.3
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11.2
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12.1
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Core P/E (x)
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19.9
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31.4
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23.1
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21.5
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P/BV (x)
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3.3
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3.4
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3.4
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3.4
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Net dividend yield (%)
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5.0
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3.2
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4.3
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4.7
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ROAE (%)
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16.6
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10.7
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14.9
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16.0
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ROAA (%)
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10.2
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5.5
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7.0
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7.5
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EV/EBITDA (x)
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14.6
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14.9
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12.4
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11.9
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Net debt/equity (%)
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net cash
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net cash
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net cash
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net cash
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MACRO RESEARCH
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Down to lowest in 2016…
by
Suhaimi Ilias
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External reserves fell –USD1.8b to USD94.6b at end-Dec
2016 (end-Nov 2015: USD96.4b), the lowest in 2016 and since Nov 2015.
But the import and short-term external covers improved to 8.8 months
and 1.3 times (end-Nov 2016: 8.2 months and 1.2 times). Full year
2016, external reserves fell -0.7% (2015: -17.8%) from USD95.3b at
end-2015. Expect reserves to stabilise later in 1Q 2017 as BNM
measure to boost external reserves kick in.
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Suhaimi Ilias
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Zamros
Dzulkafli
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Positive vibes towards end-2016
by
Suhaimi Ilias
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Exports and imports rebounded +7.8% YoY (Oct 2016:
-8.6% YoY) and +11.2% YoY (-6.6% YoY) respectively while trade
surplus is sustained at +MYR9.0b (Oct 2016: +MYR9.8b) amid improved
global manufacturing PMI and revival in commodity prices as US-China
trade relation poses risk to outlook. No change in our full-year
forecasts for exports (2017E: +2.0%; 2016E: +0.1%), imports (2017E:
+2.5%; 2016E: +0.5%) and trade surplus (2017E: +MYR87.3b; 2016E:
+MYR88.9b).
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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 signals U.K. to leave single market to win
immigration curbs. U.K. Prime Minister Theresa May signaled regaining
control of immigration and lawmaking are her Brexit priorities even if
that means quitting Europe’s single market. In her first televised
interview of the New Year, May told Sky News that leaving the European
Union will be about “getting the right relationship, not about keeping
bits of membership.” “We are leaving. We are coming out. We are not going
to be a member of the EU any longer, so the question is what is the right
relationship for the U.K. to have with the European Union when we are
outside,” she said. “We will be able to have control of our borders,
control of our laws, but we still want the best possible deal for U.K.
companies to be able to trade in and within the EU and European companies
to operate and trade in the U.K.”(Source: Bloomberg)
China: Reserves slumped to USD 320b last year as yuan
tumbled. China’s foreign currency holdings fell for a sixth month in
December, as the yuan posted its steepest annual slide in more than two
decades. Reserves decreased USD 41.1b to a fresh five-year low of USD
3.01tr, the People’s Bank of China said. The central bank’s effort to
stabilize the yuan was the main reason for the drop last year, the State
Administration of Foreign Exchange said in a statement. The world’s
largest stockpile has fallen for 10 straight quarters from a record USD
4tr in June 2014, while eroding confidence in the yuan has pushed the
currency to the lowest levels in eight years. (Source: Bloomberg)
Crude Oil: Halts below USD 54/bbl as rising US drilling
damps Saudi cuts. Oil halted gains after U.S. oil and natural-gas
explorers increased drilling activity to a one- year high in the first
week of 2017 as OPEC members look to deliver on pledges to cut output.
The number of rigs targeting oil and gas rose by 7 to 665 in the week
ended Friday, according to Baker Hughes Inc. data. OPEC Secretary-General
Mohammad Barkindo told Kuwait’s news agency that Saudi Arabia is among
member countries cutting oil production in accordance with commitments
made last year. Oil climbed for the first time in three years in 2016 as
the Organization of Petroleum Exporting Countries and 11 other nations
agreed to cut output starting Jan. 1 in an effort to reduce bloated
global inventories. Prices, which eased in late December, are surpassing
the peaks reached just after the deal was finalized, as Kuwait and Oman
give the first signs the curbs are being implemented. (Source: Bloomberg)
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Other News:
Ekovest: Ekovest-Samling JV bags MYR2.1b Pan Borneo
Highway job. Its wholly-owned subsidiary Ekovest Construction S/B with
its joint venture (JV) partner Samling Resources S/B, has bagged a
MYR2.11b contract for package WPC-02 of Phase 1 works of the Pan Borneo
Highway in Sarawak. The JV company, Samling-Ekovest JV S/B, would be held
on a 70:30 ratio by Samling Resources and Ekovest respectively. It will
be incorporated as the vehicle for the parties to implement the project.
Samling Resources will sub-contract the project in its entirety on a
back-to-back basis to Samling-Ekovest at the same price at which the
project was awarded to Samling Resources. (Source: The Edge Financial
Daily)
Sime Darby: Ropes in local partner for port operations in
China. The group is planning to give up a 50% stake in its port operator
in Weifang, China, for RMB38.61m (MYR24.92m) to secure a local partner
for the business. The proposed stake disposal in Weifang Sime Darby West
Port Co Ltd (WSDWP), will result in the emergence of Shandong Chenming
Paper Holdings Ltd (SCPHL) as Sime Darby's joint venture partner there.
Following the disposal, Sime Darby will be left with an indirect 50%
stake in WSDWP, with SCPHL owning the other half. The proposed
joint-venture is expected to be completed in the first half of 2017, with
proceeds from the new tie-up expected to be used as working capital or
the funding of other logistics projects, said Sime Darby. (Source: The
Edge Financial Daily)
Matang: IPO oversubscribed by 4.2 times. Oil palm plantation
company Matang , which is eyeing a listing on the Ace Market, has
attracted share applications from the Malaysian public representing an
oversubsription rate of 4.21 times. A total of 6,389 applications for
676.655 million shares were received for the 130 million new 10-sen
shares made available for subscription at an issue price of 13 sen
apiece. For the bumiputra portion, a total of 3,046 applications for
266.678 million shares were received. That translates into an
oversubscription rate of 3.1 times. For the public portion, a total of
3,343 applications for 409.977 million shares were received, representing
an oversubscription rate of 5.31 times.(Source: The Star)
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