Wang-Zheng : China’s top tissue paper maker buys into Wang-Zheng

STOCK OCUS OF THE DAY

Ikhmas Jaya Group : A slice of action in BBCC       BUY

We maintain our forecasts, FV of RM0.80 and BUY call, following the award of a RM188.6mil substructure package (earthworks, piling, diaphragm wall & reinforced concrete works) of Bukit Bintang City Centre by BBCC Development Sdn Bhd. Our FV is based on 13x FY18F EPS of 6.13 sen, at a slight premium to our 1-year forward target PE of 10-12x for small-cap construction stocks, to reflect a relatively less competitive piling segment vis-à-vis general contracting. The latest contract has boosted Ikhmas’ YTD job wins to RM333.3mil and its outstanding order book to RM881.6mil.

               

Our forecasts assume an order book replenishment target of RM500mil annually in FY17-19F, which is consistent with Ikhmas' job wins of RM495mil in FY16. We are positive on the latest development. We continue to like Ikhmas as it is a good proxy to the booming piling/foundation segment underpinned by current mega infrastructure projects such as MRT2, Pan Borneo Highway, SUKE and DASH, as well as those that are getting off the ground over the short to medium term such as LRT3, ECRL and KL-Singapore HSR. Its earnings visibility is good, backed by a sizeable order backlog which will keep it busy for the next 12-24 months. The entry barrier to the sector is high given the high costs of equipment and machinery as well as the limited availability of experienced operators.

Others :

Hap Seng Plantations : Small decline in FFB output in FY17F          UNRATED

STOCKS ON RADAR

Fajarbaru Builder,Lion Industries Corporation,V.S. Industry,Samchem Holdings

ECONOMIC HIGHLIGHT

Malaysia : Trade poised to stay healthy

NEWS HIGHLIGHTS

Wang-Zheng : China’s top tissue paper maker buys into Wang-Zheng

Puncak Niaga : Puncak Niaga’s price to buy plantation down to RM248.9m

KUB Malaysia : Temasek Padu serves takeover notice to KUB

Asia Bioenergy : AsiaBio eyes halal product export venture with Chinese firms

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.