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Share
Price:
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MYR20.90
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Target
Price:
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MYR24.00
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Recommendation:
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Hold
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Uncertainty
beckons
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We believe it is premature to conclude that Third Party
Access (TPA) would be detrimental to PTG. Discussions (between PTG and
the regulator) have yet to begin. Anecdotally, the implementation of
IBR has led to improved profitability for both Tenaga and Gas Malaysia.
Maintain HOLD with an unchanged MYR24.00 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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4,391.7
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4,456.0
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4,551.3
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4,580.5
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EBITDA
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2,988.3
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2,967.2
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3,187.6
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3,246.8
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Core net profit
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1,784.9
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1,749.6
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1,717.6
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1,740.5
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Core EPS (sen)
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90.2
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88.4
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86.8
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88.0
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Core EPS growth (%)
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17.9
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(2.0)
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(1.8)
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1.3
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Net DPS (sen)
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55.0
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60.0
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60.8
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61.6
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Core P/E (x)
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23.2
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23.6
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24.1
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23.8
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P/BV (x)
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3.9
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3.6
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3.5
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3.3
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Net dividend yield (%)
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2.6
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2.9
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2.9
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2.9
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ROAE (%)
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17.7
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18.1
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14.7
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14.2
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ROAA (%)
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13.5
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12.7
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11.7
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11.5
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EV/EBITDA (x)
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14.8
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15.1
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13.0
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12.7
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Net debt/equity (%)
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2.3
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net cash
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net cash
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net cash
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NEWS
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Outside Malaysia:
Germany: Economic growth accelerated more than forecast in
2016 to its fastest pace in five years as falling unemployment and
record-low interest rates boosted spending. GDP rose 1.9% after a gain of
1.7% in 2015, the Federal Statistics Office said. The government had a
fiscal surplus of 0.6% of GDP last year. Germany, the euro area’s growth
engine, is the first of the world’s biggest developed economies to
provide 2016 data. Recent reports signaled momentum picked up sharply in
the fourth quarter, and record employment, improving business sentiment
and European Central Bank stimulus have boosted prospects for 2017, even
amid risks related to national elections and Britain’s exit from the
European Union. (Source: Bloomberg)
China: Credit growth exceeds estimates as lending remains
robust. China’s broadest measure of new credit expanded faster than
expected as rebounding producer prices encouraged borrowing. Aggregate
financing remained robust at CNY 1.63t (USD 236b) in December, compared
with CNY 1.74t the prior month. The rapid pace of new lending is at odds
with pledges by policy makers in recent months to curb excessive
borrowing and reduce risk in the financial system. The economy ended last
year on a strong note as producer prices rebounded, factory activity
stabilized and corporate profit recovered. (Source: Bloomberg)
Thailand: Set a budget deficit target of THB 450b (USD
12.7b) for next fiscal year as the nation’s military government leans on
public spending to bolster economic expansion. The shortfall compares
with a goal set in September last year of a THB 390b gap in the 12 months
through Sept. 30, 2017, based on figures from Deputy Prime Minister
Somkid Jatusripitak after a budget meeting. "We decided to raise our
deficit to accommodate higher investments because we want 2017 and 2018
to be a reform period and lay the foundation for the future," Somkid
told reporters. (Source: Bloomberg)
Saudi Arabia: Oil output drops under OPEC quota close to
two-year low. Saudi Arabia has reduced oil production to less than 10
million barrels a day, below its targeted level, and will consider
renewing its pledge to cut crude output in six months, Energy Minister
Khalid Al-Falih said. The world’s biggest oil exporter is currently
producing at a 22-month low. It had agreed to cut 486,000 barrels a day
to 10.058 million barrels a day as part of a global deal to reduce output
to curb a supply glut. The caps on production, together with rising
demand and natural decreases in output in some countries, will help balance
the market and support prices, Al- Falih said in a speech at an energy
conference in Abu Dhabi. (Source: Bloomberg)
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Other News:
Ho Hup: Bags MYR221m rehabilition works in Terengganu. The
group via an unincorporated joint venture (JV), has been awarded a
36-month contract worth MYR221.4m by DSE Construction S/B for
rehabilitation works along Sungai Besut, Terengganu. Ho Hup owns an 80.7%
stake in the JV while the remainder is held by DSE Construction. The
contract is to construct a breakwater, revetment, silt curtain, beach
nourishment, install settlement plates and all associated works in
relation to the rehabilitation works along Sungai Besut, and is scheduled
to commence this month. (Source: The Edge Financial Daily)
Prestariang: Teams up with Alibaba. Prestariang will be
collaborating with Alibaba Cloud – the cloud computing arm fo the Alibaba
Group and Singapore-based technology firm Conversant Solutions Pte Ltd to
develop EduCloud, the first integrated education platform in the Asean
region. The three parties signed a MoU for the development of the
platform, which will see an official launch next month on Feb 14. The
company will be making a series of investments for the platform, but did
not disclose the amount of investment. (Source: The Edge Financial Daily)
Thriven Global: JV for Perak housing project. Thriven
Global is partnering with the Perak government for an affordable housing
project in Behrang, Perak. Its 85%-owned subsidiary Thriven NCR S/B
(TNSB) had entered into a joint venture agreement with the Perak State
Secretary Incorporated for the housing project spanning 43.3 acres of
land. JV will increase the supply of affordable housing to meet the
demand in the state and can benefit from it, in terms of a lower capital
outlay and the strategic location of the development. (Source: The Sun
Daily)
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