FW: AmBank Research - Gamuda : FY17 core net profit grows 12% BUY, 29 Sep 2017

 

 

STOCK FOCUS OF THE DAY         

Gamuda : FY17 core net profit grows 12%                                                             BUY

 

We maintain our BUY call, and keep relatively unchanged our forecasts and SOP-based FV of RM5.95 (Exhibit 2) which values Gamuda's construction business at 16x CY18 net profit, in line with our benchmark 1-year forward P/E of 14-16x for large-cap construction stocks.

 

Gamuda's FY17 core net profit of RM700.5mil (excluding RM98.5mil impairment loss on its SMART tunnel concession) met consensus estimates but beat our forecast by 6%. The key variance against our forecast came from stronger-than-expected property profits from Vietnam. Overall, its FY17 core net profit grew 12% YoY driven by improved performance from all key divisions, namely, construction, property and concession.

 

Gamuda reiterated its guidance for RM10bil new construction job wins over the next 12 months “from the rollout of several rail-based mega projects” which we believe include the East Coast Rail Link (ECRL), KL-Singapore high-speed rail (HSR) and MRT3. While Gamuda downplays its chances of winning a LRT3 viaduct package, it is bullish on ECRL.

 

 

Others :

Kimlun Corp : Strong order backlog to sustain earnings                                   BUY

Telekom Malaysia : Raising webe stake to 86%                                                   BUY

Banking Sector : Delay in implementation of net stable funding ratio       OVERWEIGHT

 

 

STOCKS ON RADAR

Federal Furniture Hldgs, Samchem Hldgs, Guan Chong,Brahims Hldgs

 

 

ECONOMIC HIGHLIGHT

US : GDP unlikely to meet 3% target

 

 

NEWS HIGHLIGHTS

Construction Sector  : Malaysia-Singapore rail link projects gaining traction

Kuantan Flour Mills : To issue more shares to white knight

Berjaya Corp : Narrows 1Q net loss on lower tax expense

Lay Hong : Margins still strong

 

 

 

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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