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| | | | | | | | | | | | | | | | Share Price: | MYR4.93 | Target Price: | MYR5.00 | Recommendation: | Hold | | |
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| | | Pakistan expansion | | Axiata's results were ahead of our expectation due to a substantial non-recurring tax credit at Robi. Separately, the acquisition of Deodar (and its c.13k towers) in Pakistan would propel edotco into a global top 10 by tower count. Maintain HOLD with an unchanged 5.00 TP. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 19,883.5 | 21,565.4 | 24,448.7 | 25,877.3 | EBITDA | 7,284.1 | 8,012.6 | 9,153.9 | 9,846.5 | Core net profit | 2,071.0 | 1,418.0 | 1,029.1 | 1,270.3 | Core EPS (sen) | 23.9 | 16.0 | 11.5 | 14.2 | Core EPS growth (%) | (8.6) | (33.1) | (28.2) | 23.4 | Net DPS (sen) | 20.0 | 8.0 | 5.7 | 12.0 | Core P/E (x) | 20.6 | 30.9 | 43.0 | 34.8 | P/BV (x) | 1.8 | 1.9 | 1.8 | 1.8 | Net dividend yield (%) | 4.1 | 1.6 | 1.2 | 2.4 | ROAE (%) | 11.5 | 2.1 | 4.3 | 5.3 | ROAA (%) | 3.9 | 2.2 | 1.4 | 1.7 | EV/EBITDA (x) | 9.4 | 8.0 | 7.3 | 6.7 | Net debt/equity (%) | 42.3 | 59.1 | 41.6 | 37.8 |
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| | | | | | | | | | | | | | Share Price: | MYR0.49 | Target Price: | MYR0.56 | Recommendation: | Hold | | |
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| | | No sale of OMG; D/G to HOLD | | Both MCIL and QWCH have decided not to proceed with the OMG deal. This is a disappointment as it removes a catalyst to our BUY call on expectation of a special DPS of up to MYR0.15/shr. We lower TP to MYR0.56 as we lower valuation peg to 11x CY17 PER. The investment thesis for MCIL will now be on the challenging outlook for its core-print business. That said, dividend yields of >7% p.a. should buffer further downside to share price. | | |
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| | FYE Mar (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,362.3 | 1,338.3 | 1,172.2 | 1,192.0 | EBITDA | 205.2 | 154.2 | 153.1 | 163.3 | Core net profit | 111.6 | 83.0 | 87.2 | 94.5 | Core EPS (sen) | 6.6 | 4.9 | 5.2 | 5.6 | Core EPS growth (%) | (22.7) | (25.7) | 5.0 | 8.5 | Net DPS (sen) | 4.3 | 3.2 | 3.6 | 3.9 | Core P/E (x) | 7.4 | 10.0 | 9.5 | 8.7 | P/BV (x) | 1.0 | 1.0 | 1.0 | 1.0 | Net dividend yield (%) | 8.8 | 6.5 | 7.4 | 8.0 | ROAE (%) | 12.9 | 7.9 | 10.5 | 11.6 | ROAA (%) | 7.1 | 5.6 | 6.5 | 7.8 | EV/EBITDA (x) | 5.5 | 6.1 | 3.9 | 3.3 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR2.60 | Target Price: | MYR2.45 | Recommendation: | Hold | | |
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| | | Proposes private placement | | The proceeds of its proposed private placement will largely be used to fund its acquisition of a warehouse. Bison's current utilisation rate for its existing distribution centre (122,601 sq ft) runs at >70% and with this new warehouse, Bison could support 600 stores or more (325 as at end Apr 2017). The exercise is positive over the long run while the near term EPS dilution is manageable at 5-6%, by our estimates. | | |
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| | FYE Oct (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 217.5 | 263.6 | 320.1 | 386.3 | EBITDA | 21.0 | 27.1 | 33.1 | 42.3 | Core net profit | 13.5 | 19.3 | 24.5 | 29.1 | Core EPS (sen) | 4.4 | 6.2 | 7.9 | 9.4 | Core EPS growth (%) | 9.5 | 42.6 | 27.3 | 18.8 | Net DPS (sen) | 0.2 | 1.5 | 2.0 | 2.0 | Core P/E (x) | 59.6 | 41.8 | 32.9 | 27.7 | P/BV (x) | 14.5 | 5.3 | 4.7 | 4.2 | Net dividend yield (%) | 0.1 | 0.6 | 0.8 | 0.8 | ROAE (%) | 27.6 | 17.4 | 15.2 | 16.0 | ROAA (%) | 14.9 | 12.7 | 11.3 | 11.7 | EV/EBITDA (x) | na | 17.2 | 22.9 | 18.0 | Net debt/equity (%) | 4.6 | net cash | net cash | net cash |
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| | | | | SECTOR RESEARCH | | | | | | | Loan growth still moderate
by Desmond Ch'ng |
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| | | | | | Much as the industry has been hoping for a pick-up in business lending in 2H17, July shows no evidence of that just yet and the trend in working capital applications is not supportive either. Most banks however seem to guide for a healthy corporate loan pipeline and we continue to monitor progress here. We maintain our NEUTRAL stance on the sector with BUYs on CIMB and BIMB. | |
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| | | | MACRO RESEARCH | | | | | | | FBMKLCI: Volatilities Spike Up
by Nik Ihsan Raja Abdullah |
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| | | | | | Late buying support in selected blue chips like CIMB and AXIATA lifted FBMKLCI 12.02pts higher on last Wednesday. Market, however, is expected to stay volatile today following the nuclear test by North Korea over the weekend. Sentiment could also be hit by the selloff in regional markets yesterday. Technically, FBMKLCI is in a sideways consolidation mode. We expect the benchmark index to trade between 1,755 and 1,775 in the near-term. Downside supports are 1,748 and 1,729. | |
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| | NEWS | | | Outside Malaysia:
E.U: ECB monthly QE data show the central bank continued to overbuy in France and Italy versus what the capital key implies, while underweight in Portugal and Ireland, due to bond scarcity. The recent trend of under buying in Germany also continued. The ECB bought EU1.29b more than the capital key implied in France in August, leaving the total France overbuying since the program began at almost EU14b, according to Bloomberg calculations based on ECB data. (Source: Bloomberg)
U.K: Retail sales tick up as food prices drive faster inflation. Retail sales climbed in August at the fastest rate since Easter, with the like-for-like gain increasing to 1.3% YoY, the British Retail Consortium and KPMG said. While that's the third consecutive month of rising sales, growth has been mainly driven by higher food prices rather than because shoppers are buying more goods, according to the BRC. Purchases of non-food items picked up in the three months to August after a spell of weakness. Separate data from Barclaycard showed annual consumer-spending growth slowed last month to 2.9% as shoppers tightened their belts. Spending on essentials increased at its weakest pace in 12 months and almost half of those surveyed said they are "feeling the squeeze" from faster inflation. (Source: Bloomberg)
Crude Oil: U.S. gasoline falls to 1-week low as some refiners plan restarts. Gasoline declined to the lowest in more than a week as some U.S. Gulf Coast refineries said they plan to resume operations following shutdowns forced by flooding from Hurricane Harvey. While about one-fifth of U.S. refining capacity was halted, according to data compiled by Bloomberg, some plants including those operated by Marathon Petroleum Corp. and Valero Energy Corp. are returning. The U.S. Energy Department also approved the release of 5.3 million barrels of crude from the Strategic Petroleum Reserve. (Source: Bloomberg) | |
| | | | | Other News:
Pintaras Jaya: Lands MYR26m substructure job. The group has bagged a MYR26.3m contract to construct and complete the substructure works for one block of apartment and two levels of car park in Mukim Petaling.Pintaras Jaya said the contract was awarded by privately-owned Maison Rouge S/B to its wholly-owned subsidiary Pintaras Geotechnics S/B.(Source: The Edge Financial Daily)
Bison Consolidated: Plans to raise up To MYR77.52m via private share sale. The group is proposing a private placement of up to 31.01m new shares in the company at MYR2.50 apiece to raise MYR77.52m. Some MYR50m of the proceeds raised will be used to acquire a piece of leasehold land with an office block in Kota Damansara, from Leno Marketing S/B, to be used as a corporate office. Another MYR24.39m will be used as working capital, while the balance is for proposal-related expenses. Bison also proposed a one-for-one bonus issue to be issued after the private placement, which entails the listing of up to another 341.77m shares in the counter. (Source: The Edge Financial Daily)
Malton: Higher pre-tax profit for FY2017. The group registered higher pre-tax profit for FY2017 at MYR111.77m, compared with the MYR71.2m recorded last year. Revenue expanded by 29.2% to MYR817.08m from MYR632.21m previously. Malton said its ongoing development projects, which include The Park Sky Residence and The Park 2 Residence in Bukit Jalil, will contribute to earnings in FY18. (Source: The Edge Financial Daily) | |
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