STOCK FOCUS OF THE DAY\MISC : Some daylight through the
fog HOLD
We maintain our HOLD recommendation on MISC with an
unchanged fair value of RM7.35/share, which is at a 20% discount to our
sum-of-parts valuation of RM9.19/share. This implies a FY17F EV/EBITDA of 9x -
20% below its 3-year average of 11x. We have marginally tweaked MISC’s
FY17F-18F earnings as its normalised net profit of RM2,261mil was within our
expectations but above street’s RM2,128mil; coming in 2% below our forecast
while 6% above consensus. We also introduce FY19F earnings with an 11% growth
premised on higher utilisation of its LNG vessels together with an increase of
one LNG vessel, and 5% increase in petroleum charter rates. MISC’s 4QFY16
revenue rose10% QoQ to RM2.5bil due to the stronger dollar given that the
group’s US$ revenues actually contracted 1% QoQ due to lower LNG charter
following the expiry of LNG Puteri Zamrud’s contract, which will be redeployed
to a new 10-year charter in October this year together with the halving of
MMHE’s income from low order intake.
The winter season drove LNG spot charter rates up 12% QoQ in
December as China and Korea’s natural gas imports rose 38% and 12%
respectively, while supply was constrained by Gorgon in Australia and Angola.
Large tanker charter rates surged as VLCC rates tripled QoQ to US$59k/day, seasonally-driven
largely by China demand as its own local production declined amid
strategic reserve stocking up. Likewise, smaller tanker rates also rose as
Aframax doubled QoQ to US$28k/day while Suezmax rose 78% to US$37k. OPEC’s
production cut, which began this year, could negatively affect shipping demand
even though new tanker deliveries are becoming more rational from 2018 onwards.
Hence, we believe the stock currently trades at a fair FY17F EV/EBITDA of 10x,
near its 3-year average of 11x.
Others :
Westports Holdings : Growth driven by transhipment
container
HOLD
Hap Seng Plantation : Decent
planter UNRATED
Plantation Sector : CPO output rebounds YoY in Jan 2017
(MPOB)
NEUTRAL
QUICK TAKE
Plantation Sector : Newsflow for week 6 to 10
February
NEUTRAL
STOCKS ON THE RADAR
Comfort Gloves,Salutica,Bumi Armada,Alam Maritim Resources
ECONOMIC HIGHLIGHTS
China : Headwinds for export growth to remain
UK : Can trade growth be sustained?
Malaysia : Economy to maintain a sustainable growth
Philippines : Expect policy rate to remain intact in near
term
NEWS HIGHLIGHTS
Power Sector : Sarawak Cable plans to pare down borrowings
Oil & Gas Sector : Perak’s gas network set for launch
Property Sector : MK Land eyes 500 affordable houses in Ipoh
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.