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Share
Price:
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MYR1.75
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Target
Price:
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MYR1.90
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Recommendation:
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Buy
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KVMRT 2 works
win
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SCG’s MYR212m KVMRT 2 station works win is a good
addition, lifting its outstanding order book to MYR4.99b. We have
imputed job win potential and keep our earnings forecasts. Maintain BUY
with an unchanged MYR1.90 TP on 15x FY18 PER (+1SD).
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FYE Dec (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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1,916.9
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1,788.8
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2,347.4
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2,208.5
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EBITDA
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178.2
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188.6
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209.0
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226.4
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Core net profit
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127.7
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123.5
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145.7
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160.7
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Core EPS (sen)
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9.9
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9.6
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11.3
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12.4
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Core EPS growth (%)
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11.9
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(3.3)
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18.0
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10.3
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Net DPS (sen)
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4.0
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5.0
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3.9
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4.3
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Core P/E (x)
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17.7
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18.3
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15.5
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14.1
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P/BV (x)
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5.0
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4.6
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3.8
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3.3
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Net dividend yield (%)
|
2.3
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2.9
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2.3
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2.5
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ROAE (%)
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32.6
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26.2
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27.0
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25.1
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ROAA (%)
|
9.2
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8.0
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8.9
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9.3
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EV/EBITDA (x)
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8.7
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9.9
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8.3
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7.4
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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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Chew Hann Wong
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Adrian Wong
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Share
Price:
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MYR3.88
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Target
Price:
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MYR3.80
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Recommendation:
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Hold
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Taking a
backseat
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THE Alliance has picked PSA as its hub in this region and
we expect UASC to move some of its volume out of Westports to PSA.
Imputing for the potential volume loss, we lower our throughput growth
forecasts for 2017-19 resulting in lower EPS forecasts by up to 17%.
Consequently, our DCF-TP is now a lower MYR3.80 (-14%; 2025-54 growth
rate: 2%, WACC: 6.7%). We think this development is largely priced-in
with Westports’ share price having weakened 10% YTD. HOLD.
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FYE Dec (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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1,578.3
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1,804.3
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1,837.2
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1,820.0
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EBITDA
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869.1
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963.5
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967.7
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975.9
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Core net profit
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504.9
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616.6
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620.6
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526.8
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Core EPS (sen)
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14.8
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18.1
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18.2
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15.4
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Core EPS growth (%)
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(1.4)
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22.1
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0.7
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(15.1)
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Net DPS (sen)
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11.1
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14.0
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13.6
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11.6
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Core P/E (x)
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26.2
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21.5
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21.3
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25.1
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P/BV (x)
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7.0
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6.4
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5.9
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5.6
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Net dividend yield (%)
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2.9
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3.6
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3.5
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3.0
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ROAE (%)
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27.6
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32.1
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28.9
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23.0
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ROAA (%)
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12.8
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14.7
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13.6
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10.9
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EV/EBITDA (x)
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17.0
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16.0
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15.0
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14.7
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Net debt/equity (%)
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39.7
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35.3
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57.7
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48.4
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Share
Price:
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MYR2.91
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Target
Price:
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MYR3.00
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Recommendation:
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Hold
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Awaiting next
catalyst
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Post recent meeting with management, we remain positive on
Padini’s potential to sustain its near-term growth as the company
remains committed to growing its topline via new outlets, active
promotions and competitive pricing. Meanwhile, Padini also plans to
expand its business regionally in 2018. We raise our FY17-19E earnings
forecasts by 0.3%-3% and our new TP is MYR3.00 (+25sen), pegged to 12x
FY18 PER.
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FYE Jun (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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977.9
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1,301.2
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1,510.2
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1,659.3
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EBITDA
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145.3
|
221.7
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241.2
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268.3
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Core net profit
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80.2
|
136.4
|
150.6
|
165.0
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Core EPS (sen)
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12.2
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20.7
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22.9
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25.1
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Core EPS growth (%)
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(11.8)
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70.0
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10.4
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9.6
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Net DPS (sen)
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10.0
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11.5
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10.0
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10.0
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Core P/E (x)
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23.9
|
14.0
|
12.7
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11.6
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P/BV (x)
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4.7
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4.1
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3.5
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2.9
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Net dividend yield (%)
|
3.4
|
4.0
|
3.4
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3.4
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ROAE (%)
|
20.2
|
31.4
|
29.4
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27.3
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ROAA (%)
|
13.7
|
19.5
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17.5
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16.7
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EV/EBITDA (x)
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4.6
|
5.8
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6.6
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5.7
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Net debt/equity (%)
|
net cash
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net cash
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net cash
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net cash
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SECTOR RESEARCH
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Lowest stockpile in 6 years
by Chee
Ting Ong
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The market appears to have brushed off MPOB’s lowest
stockpile in 6 years last Friday. Rather it chose to focus on a 26%
MoM decline in exports estimates for 1-10th March as 3M CPO price was
down -2.4% DoD. As highlighted last week, we turned cautious on the
sector although we think the recent CPO price selldown was overdone
given the low stockpile. A short term rebound in CPO price is
possible before prices resume their downtrend into 2H17. Our BUYs are
BPLANT, SOP, BAL, AALI, LSIP, TBLA.
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MACRO RESEARCH
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Palm oil’s Achilles’ heel
by Tee
Sze Chiah
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FBMKLCI eked out 0.16pts to close at 1,717.58 on
Friday despite hovering in the negative territory for most of the
day. Market breadth was marginally positive with gainers outpaced
losers by 471 to 435. A total of 3.4b shares worth MYR3.2b changed
hands on Friday. As FBMKLCI recovered from its recent pullback,
bargain hunting activity has emerged near its support level at 1,715.
Expect FBMKLCI to range within 1,715 to 1,735 today. Support remains
at 1,705 and 1,690.
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NEWS
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Outside Malaysia:
U.S: Nonfarm payrolls rose 235k; unemployment rate at
4.7%. Nonfarm payrolls, net revisions, added 9,000 from prior two months.
Participation rate was 63% vs prior 62.9%. Average hourly earnings rose
0.2%. Manufacturing payrolls rose 28k after rising 11k in the prior
month. (Source: Bloomberg)
U.K: Brexit minister seeks to avert Tory revolt before
vote. U.K. Brexit Secretary David Davis is seeking to avert a rebellion
within the ruling Conservative Party that could complicate government
efforts to trigger divorce negotiations with the European Union by the
end of this month. The House of Commons will vote on a bill authorizing
Prime Minister Theresa May to begin the formal two- year process for
Brexit. Some Conservatives are pushing for Parliament to have a say on
what happens if the talks end without an agreement and have indicated
they may oppose her unless she concedes. (Source: Bloomberg)
Singapore: To cut property stamp duties, ease debt ratio
rules. Calibrated adjustments to seller’s stamp duty and total debt
servicing ratio framework from March 11, according to joint statement
from the Monetary Authority of Singapore, Ministry of National
Development and Ministry of Finance. Seller’s stamp duties to be revised
to holding periods of up to 3 years, down from current 4 years. Seller’s
stamp duty rate lowered by four percentage points for each tier; to range
from 4% to 12%. (Source: Bloomberg)
Crude Oil: Extends losses as U.S. supply glut counters
Libya disruption. Oil extended losses after a jump in U.S. supplies
erased three months of gains following OPEC’s deal to cut output. The
U.S. oil rig count rose by eight to 617 last week, the highest since
September 2015, according to Baker Hughes Inc. data. Libya’s crude output
dropped 11% as clashes among armed groups led to the closure of some of the
OPEC nation’s biggest oil export terminals. Brent for May settlement
dropped to USD 50.85/bbl a barrel. (Source: Bloomberg)
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Other News:
Construction: MRT Corp awards four work packages worth
MYR2.74b. Mass Rapid Transit Corp S/B has awarded four work package
contracts with a total value of MYR2.74b for the construction of the MRT
Sungai Buloh-Serdang-Putrajaya (SSP) Line. The award for three packages,
which completes the tenders for all 10 viaduct work packages for the SSP
Line, were made following a One-Stop Procurement I (OSPC I) meeting
chaired by Prime Minister Datuk Seri Najib Abdul Razak. The MYR858.18m
work package V205 was awarded to Trans Resources Corp S/B. The second
work package V206 was awarded to Gadang Engineering (M) S/B for
MYR952.09m. The third work package V209 worth MYR715.99m was awarded to
Acre Works S/B. The work package worth MYR212.3m was bagged by Sunway
Construction S/B. (Source: The Sun Daily)
Banking: Bank Rakyat a takeover target. Bank Rakyat,
Malaysia’s profitable Islamic co-operative bank, has become a takeover
target as part of Bank Negara’s bigger plan to consolidate the financial
sector. The idea is being floated around and among the institutions
exploring the takeover of Bank Rakyat is PNB. Local conventional banks
are also said to be eyeing Bank Rakyat. It is still at an infancy stage.
It’s early days and remains an idea that is being explored. (Source: The
Star)
WCT: JV in Doha sued for MYR130m. WCT Holding’s
unincorporated 50:50 JV with Arabtec Construction LLC (ATC) in Doha,
Qatar, is being sued for AED107.73m (MYR130.56m) by Triumpher Steel
Construction Group Ltd (TSC) in relation to the Nad Al Sheba Dubai
Racecourse project. WCT’s Middle East regional office in Doha had on
March 6 received from the Dubai International Arbitration Center a
request for arbitration dated Feb 27 filed by TSC, naming ATC as the
first respondent and WCT Dubai branch as the second respondent. WCT will
take the necessary legal actions to defend itself and to oppose the
claims. (Source: The Sun Daily)
UMW Oil & Gas: Wins contract from Vestigo Petroleum.
Its wholly owned subsidiary UMW Offshore Drilling S/B (UOD) has been
awarded a drilling rig services contract by marginal fields developer
Vestigo Petroleum S/B. The value of the contract was not disclosed. It
will deploy its UMW Naga 2, an independent-leg cantilever jack-up rig
with a drilling depth capability of 30,000 feet and a rated operating
water depth of 350 feet, for the contract. The contract is to drill one
firm well, commencing end of the first quarter of 2017. (Source: The Sun
Daily)
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