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Share
Price:
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MYR1.28
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Target
Price:
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MYR1.40
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Recommendation:
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Hold
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Looking ahead
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The absence of a share price correction following the
recent loss of the solar project points to seemingly low investor
expectations being placed on the company. We do not rule out Malakoff
being successful in future solar farm tenders, although it remains
unclear as to whether the market has fully grasped the potential
Segari-induced net profit step-down in 2017-2018. Maintain HOLD with an
unchanged TP of MYR1.40.
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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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5,302.0
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6,098.4
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6,365.7
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6,060.5
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EBITDA
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2,468.8
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2,835.6
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2,782.5
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2,529.1
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Core net profit
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453.2
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355.5
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296.9
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188.0
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Core EPS (sen)
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9.1
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7.1
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5.9
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3.8
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Core EPS growth (%)
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(6.8)
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(21.6)
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(16.5)
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(36.7)
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Net DPS (sen)
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7.0
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7.0
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7.0
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5.0
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Core P/E (x)
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14.1
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18.0
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21.6
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34.0
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P/BV (x)
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1.1
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1.1
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1.1
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1.1
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Net dividend yield (%)
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5.5
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5.5
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5.5
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3.9
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ROAE (%)
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9.3
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6.1
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5.0
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3.2
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ROAA (%)
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1.5
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1.2
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1.0
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0.6
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EV/EBITDA (x)
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8.9
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7.1
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6.6
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6.6
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Net debt/equity (%)
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230.4
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214.1
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191.4
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167.4
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NEWS
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Outside Malaysia:
U.S: Payroll gains slowed in March while the jobless rate
unexpectedly dropped to the lowest in almost a decade, suggesting the
labor market is returning to a more sustainable pace of progress. The
98,000 increase followed a 219,000 rise in February that was less than
previously estimated, a Labor Department report showed. The unemployment
rate fell to 4.5% from 4.7%, and wage gains slowed to a 2.7% YoY.
(Source: Bloomberg)
U.K: Consumer spending growth slows on inflation squeeze.
Consumer spending rose 1% YoY in March, down from a 1.3% YoY gain in
February, according to Visa’s U.K. Consumer Spending Index. Average
annual growth rate slowed to 0.9% in 1Q, the slowest since 4Q 2013.
E-commerce spending increased 8.2% YoY in March, while face-to-face
expenditure fell 1.3% YoY, the third month of declines. Annabel Fiddes,
an economist at IHS Markit, says inflationary pressures have “eaten away
at consumers’ spending power”. (Source: Bloomberg)
Japan: Current-account surplus bounces back in February.
Japan’s current-account surplus for February was JPY 2.81tr (USD 25b), up
from JPY 65.5b in January, according to data released. The surplus
widened 18.2% YoY. January’s current-account surplus was weak thanks to a
monthly trade deficit resulting from the timing of the Lunar New Year
holiday in Japan’s trading partners. (Source: Bloomberg)
Crude Oil: Extends gain as Russia weighs output cut
extension. Oil extended gains as Russia signaled it’s weighing an
extension to OPEC-led production cuts past June. Russia’s Energy Ministry
has been in discussions with oil companies regarding the need to prolong
the six-month deal when it expires, Energy Minister Alexander Novak said.
In the U.S., companies boosted drilling to the highest level since August
2015. Brent for June settlement climbed to USD 55.5/bbl. (Source:
Bloomberg)
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Other News:
Ekovest: Buys lands for MYR26.77m to develop EkoQuay
project. Its subsidiary Ekovest Properties S/B, has purchased two parcels
of freehold land in Kuala Lumpur from substantial shareholder Lim Seong
Hai Holdings S/B for MYR26.77m.The first parcel of land measures 2,403 sq
m, while the second plot measures 2,290 sq m. Ekovest said it intends to
combine the lands together with its existing land bank to undertake its
mixed commercial development project called EkoQuay, which will commence
construction in 2018. (Source: The Edge Financial Daily)
Yong Tai: Unit to jointly develop land with MYR180m GDV.
Yong Tai and KOF Holdings S/B plan to jointly develop two adjoining
pieces of land on Jalan U-Thant, Kuala Lumpur, with a gross development
value of MYR180m. The proposed development featuring residential units,
will take approximately three years to complete, subject to approvals.
(Source: The Edge Financial Daily)
Kwantas Corp: Hives off Chinese unit for MYR16m to improve
financial position. The group plans to dispose of Dongma (Guangzhou Free
Trade Zone) Oleochemicals Co Ltd (DMO) for RMB25m (MYR16.07m) to
streamline its exercise and improve its overall financial position and
liquidity. DMO operates oleochemical and glycerine plants in the
Guangzhou Free Trade Zone. The share sale consideration would be used to
repay borrowings and raise working capital,” Kwantas said, adding that it
expects to make a net gain on disposal of about MYR4.6m. (Source: The
Edge Financial Daily)
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