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Share
Price:
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MYR1.83
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Target
Price:
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MYR2.10
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Recommendation:
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Buy
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FY17 reported
earnings double
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Reported FY3/17 net profit doubled YoY and we have raised
our FY18-FY19 earnings forecasts by 17-20%. Valuations are still
undemanding with the stock trading at an attractive CY18 PER of just
7.8x and a P/BV of 1.2x, despite a high ROE of 17%. Post earnings
upgrade, our new TP is MYR2.10 (previously MYR1.95), on pegging on a
lower CY18 P/BV of 1.4x (previously 1.5x), to reflect slower loan
demand ahead. At MYR2.10, the stock would trade at a still undemanding
CY18 PER of 8.8x. BUY.
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FYE Mar (MYR m)
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FY16A
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FY17A
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FY18E
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FY19E
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Operating income
|
120.9
|
171.7
|
192.4
|
213.7
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Pre-provision profit
|
79.6
|
101.5
|
143.9
|
160.4
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Core net profit
|
39.6
|
73.7
|
84.1
|
92.0
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Core EPS (MYR)
|
0.12
|
0.24
|
0.22
|
0.24
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Core EPS growth (%)
|
35.9
|
94.0
|
(7.7)
|
9.5
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Net DPS (MYR)
|
0.46
|
0.03
|
0.04
|
0.04
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Core P/E (x)
|
14.8
|
7.7
|
8.3
|
7.6
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P/BV (x)
|
1.4
|
0.4
|
1.4
|
1.2
|
Net dividend yield (%)
|
24.9
|
1.6
|
1.9
|
2.2
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Book value (MYR)
|
1.34
|
4.64
|
1.34
|
1.55
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ROAE (%)
|
7.7
|
16.4
|
17.6
|
16.7
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ROAA (%)
|
2.8
|
4.5
|
4.7
|
4.7
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Share
Price:
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MYR1.52
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Target
Price:
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MYR1.45
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Recommendation:
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Hold
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Buys land in
Sentul
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We are neutral on MSGB’s latest land acquisition in
Sentul. The land, which will be developed into affordable housing with
selling prices from MYR326k/unit, has an estimated GDV of MYR1.3b. We
maintain our earnings forecasts and RNAV-TP of MYR1.45 (0.6x P/RNAV;
MYR2.42 RNAV/sh) pending the completion of the land purchase. The new
land could add +5sen/sh to our RNAV estimate. Maintain 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
|
3,108.5
|
2,957.6
|
2,980.0
|
3,119.6
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EBITDA
|
527.9
|
508.8
|
585.2
|
657.8
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Core net profit
|
338.8
|
319.5
|
300.7
|
343.3
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Core FDEPS (sen)
|
14.1
|
13.3
|
12.5
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14.2
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Core FDEPS growth(%)
|
(23.5)
|
(5.7)
|
(5.9)
|
14.1
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Net DPS (sen)
|
6.5
|
6.5
|
5.0
|
5.7
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Core FD P/E (x)
|
10.8
|
11.5
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12.2
|
10.7
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P/BV (x)
|
1.2
|
1.1
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1.1
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1.0
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Net dividend yield (%)
|
4.3
|
4.3
|
3.3
|
3.7
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ROAE (%)
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na
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na
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na
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na
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ROAA (%)
|
5.7
|
5.0
|
4.3
|
4.3
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EV/EBITDA (x)
|
6.9
|
6.9
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4.1
|
3.5
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Net debt/equity (%)
|
3.7
|
2.0
|
net cash
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net cash
|
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Share
Price:
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MYR4.17
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Target
Price:
|
MYR4.25
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Recommendation:
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Hold
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A fresh start to
the year
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1Q17 results were above our street-low forecast. Stable
earnings from the Malaysian hospitals and higher contributions from its
KPJ Dhaka and KPJ Healthcare University College supported the YoY
growth. However, we do note the volatility of patient figures at KPJ as
tracked over the previous quarters which has led to lumpy earnings. No
change to our earnings forecasts and SOP-based TP of MYR4.25.
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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
|
2,818.5
|
3,021.1
|
3,246.1
|
3,495.6
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EBITDA
|
350.9
|
351.6
|
383.4
|
409.0
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Core net profit
|
144.6
|
125.4
|
129.4
|
136.9
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Core EPS (sen)
|
13.9
|
11.5
|
12.2
|
12.9
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Core EPS growth (%)
|
13.3
|
(17.4)
|
5.7
|
5.8
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Net DPS (sen)
|
7.0
|
4.8
|
6.1
|
6.4
|
Core P/E (x)
|
29.9
|
36.2
|
34.3
|
32.4
|
P/BV (x)
|
3.0
|
2.8
|
2.7
|
2.6
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Net dividend yield (%)
|
1.7
|
1.2
|
1.5
|
1.5
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ROAE (%)
|
9.8
|
9.8
|
8.0
|
8.1
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ROAA (%)
|
4.0
|
3.2
|
3.2
|
3.2
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EV/EBITDA (x)
|
16.0
|
16.7
|
15.2
|
14.4
|
Net debt/equity (%)
|
72.5
|
72.2
|
72.9
|
74.6
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Share
Price:
|
MYR2.78
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Target
Price:
|
MYR2.90
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Recommendation:
|
Hold
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Spreading the
aroma in China
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Management clarified that 4QFY3/17 F&B provisions were
largely related to its Singapore operations. Due to closure of some
stores, it has provided for some inventories and fees. Near-term focus
for F&B will continue to be cost efficiencies and on maintaining
its value meals to drive sales. As for FMCG, we expect its export sales
to Greater China to be the main growth driver. Our earnings forecasts
and TP of MYR2.90 (18x CY18 PER; +1SD mean) are unchanged.
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FYE Mar (MYR m)
|
FY16A
|
FY17A
|
FY18E
|
FY19E
|
Revenue
|
393.4
|
425.2
|
459.4
|
503.5
|
EBITDA
|
84.7
|
97.1
|
107.9
|
115.7
|
Core net profit
|
55.3
|
60.8
|
69.8
|
75.8
|
Core EPS (sen)
|
11.9
|
13.1
|
15.1
|
16.4
|
Core EPS growth (%)
|
6.1
|
9.9
|
14.9
|
8.5
|
Net DPS (sen)
|
9.0
|
10.0
|
8.3
|
9.0
|
Core P/E (x)
|
23.3
|
21.2
|
18.4
|
17.0
|
P/BV (x)
|
3.6
|
3.5
|
3.2
|
3.0
|
Net dividend yield (%)
|
3.2
|
3.6
|
3.0
|
3.2
|
ROAE (%)
|
15.0
|
16.6
|
18.1
|
18.1
|
ROAA (%)
|
12.5
|
13.4
|
14.8
|
14.9
|
EV/EBITDA (x)
|
6.4
|
11.5
|
10.3
|
9.4
|
Net debt/equity (%)
|
net cash
|
net cash
|
net cash
|
net cash
|
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MACRO RESEARCH
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Shanghai Composite Index potential reversal
by Nik
Ihsan Raja Abdullah
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FBMKLCI eased 1.66pts last Friday to close at
1,772.30. Broader market was relatively weak, with selling pressure
seen across all sectors. Losers outpaced gainers by 771 to 208. A
total of 2.86b shares worth MYR2.60b changed hands. As the index
failed to retest its previous high, further decline can be expected.
However, we believe downside would be capped amid stronger ringgit
and crude oil price performance.
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Nik Ihsan Raja
Abdullah
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Tee Sze Chiah
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NEWS
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Outside Malaysia:
E.U: Merkel signals new era as Trump smashes consensus.
German Chancellor Angela Merkel gave her strongest indication yet that
Europe and the U.S. under President Donald Trump are drifting apart,
saying reliable relationships forged since the end of World War II “are
to some extent over.” Speaking at a campaign rally, Merkel offered a
glimpse of her world view after Trump’s nine-day trip, during which he
hectored NATO allies for not spending enough on defense, called Germany’s
trade surplus “very bad,” and brought the U.S. to the brink of exiting
the global Paris climate accord. “The times when we could fully rely on
others are to some extent over -- I experienced that in the last few
days,” Merkel told supporters in the Bavarian capital a day after the G-7
meeting ended. “We Europeans must really take our destiny into our own
hands.” (Source: Bloomberg)
China: Early data shows slowdown biting amid credit
tightening. The first hints of China’s economic performance this month
suggest that a slowdown in growth is taking hold, as policy makers beef
up efforts to clamp down on financial risks. Standard Chartered Plc’s
Small and Medium Enterprise Confidence Index headed for a second
consecutive month of decline in May, falling slightly to 56.9 from 58 in
April. Global financial market experts veered toward pessimism on the
outlook for the economy, according to a survey of the China Economic
Panel, a joint project of the Centre for European Economic Research (ZEW)
in Mannheim, Germany, and Fudan University in Shanghai. The reading for
expectations slumped to minus 0.1 in May, down from 17.7 last month --
the highest since at least late 2015. The assessment of the current
economic situation has also dampened, falling to 12.2 in May from 17.6 in
April. The S&P Global Platts China Steel Sentiment Index slumped to
33.1 this month from 45.1 in April, weighed down by the outlook for
domestic steel orders. The gauge is based on a survey of between 75 and
90 China-based market participants including traders and steel- mill executives.
(Source: Bloomberg)
S. Korea: May announce steps to stabilize property market.
South Korean government to prepare measures to deal with risk factors
including household debt, corporate restructuring, and unstable property
markets, Seoul Economic Daily says, citing presidential office spokesman
Park Su-hyun. There is speculation the government measures could include
regulations on borrowing and tax increases, after home prices in some
areas rose. (Source: Bloomberg)
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Other News:
Econpile: Posts record net profit in 3Q, pays 3 sen
dividend. The group has declared a second interim dividend of 3 sen per
share for its third quarter ended March 31, 2017 following record net
profit of MYR22.1m, up 23.46% from MYR17.9m last year following its
ventures into higher-value projects. Its net profit for the first three
quarters of FY17 rose 22.24% to MYR59.9m, from MYR49m in the previous
corresponding period, due to larger valued contracts bring awarded.
Revenue grew 27.12% to MYR424.2m from MYR333.71m. (Source: The Edge
Financial Daily)
Tropicana: 1Q net profit more than doubles on strong
sales. Tropicana more than doubled its net profit to MYR32.52m in the
first quarter ended March 31, 2017 from MYR15.17m a year ago, mainly
contributed by its core property development operations. Meanwhile,
quarterly revenue jumped 33.1% to MYR381.87m from MYR286.93m. (Source:
The Edge Financial Daily)
Pestech: 4Q net profit up 92.8% on higher projects
revenue. Net profit rose 92.8% to MYR24.14m in its fourth financial
quarter ended March 31, 2017 (4QFY17) from MYR12.52m a year ago, on
higher project revenue. Revenue rose 38.4% to MYR170.83m in 4QFY17 from
MYR123.4m. For the full year, net profit dipped 2.2% to MYR49.24m from
MYR50.37m the previous year, while revenue grew 23.8% to MYR393.6m from
MYR318.02m in FY16. (Source: The Edge Financial Daily)
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