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| | | | | | | | | | | | | | | | Share Price: | MYR4.86 | Target Price: | MYR4.90 | Recommendation: | Hold | | |
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| | | Customer-centric approach | | We hosted Digi's newly-appointed CFO Nakul Sehgal for a round of local meetings last week. Near-term priorities include both cost optimisation and revenue growth, while maintaining a customer-centric approach. Maintain HOLD with an unchanged MYR4.90 TP. Risk-reward remains relatively balanced at present. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 6,914.0 | 6,597.1 | 6,553.3 | 6,776.0 | EBITDA | 2,982.3 | 2,954.9 | 2,949.0 | 3,049.2 | Core net profit | 1,722.6 | 1,632.7 | 1,570.3 | 1,613.8 | Core EPS (sen) | 22.2 | 21.0 | 20.2 | 20.8 | Core EPS growth (%) | (15.2) | (5.2) | (3.8) | 2.8 | Net DPS (sen) | 22.0 | 20.9 | 20.2 | 20.8 | Core P/E (x) | 21.9 | 23.1 | 24.1 | 23.4 | P/BV (x) | 72.8 | 72.8 | 72.8 | 72.8 | Net dividend yield (%) | 4.5 | 4.3 | 4.2 | 4.3 | ROAE (%) | 285.8 | 314.4 | 302.4 | 310.8 | ROAA (%) | 38.4 | 32.1 | 28.6 | 29.1 | EV/EBITDA (x) | 14.4 | 13.4 | 13.5 | 13.1 | Net debt/equity (%) | 204.2 | 366.9 | 400.9 | 404.0 |
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| | | | | | MACRO RESEARCH | | | | | | | COMEX Gold – Still Attractive
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI declined for the second day after losing 7.00pts to 1,776.66 yesterday. Losers were led by CIMB, WPRTS and GENM. Market breadth was negative with losers outpacing gainers by 517 to 337. A total of 2.01b shares worth MYR1.92b changed hands. Expect another volatile session today on renewed concern over rising geopolitical tensions. Market appetite for risky assets may also wane ahead of US FOMC Meeting and the long weekend break. | |
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| | NEWS | | | Outside Malaysia:
U.S. Housing starts steady, permits rise ahead of hurricanes. Steady U.S. new-home construction in August together with a jump in permits indicate the housing market was moving ahead before a likely temporary hit from Hurricanes Harvey and Irma, government figures showed. Residential starts fell 0.8% MoM to a 1.18m annualized rate after upwardly revised 1.19m pace the prior month. Single-family home starts rose 1.6% MoM to 851k; multifamily starts, such as apartment buildings and condominiums, fell 6.5% MoM to 329k. Permits, a proxy for future construction, rose 5.7% MoM to 1.3m rate, highest since January, from 1.23m pace. Data collection on housing starts was below normal in Texas, Florida areas affected by storms. (Source: Bloomberg)
U.K: Confidence among small British firms and employers has fallen to the lowest level since the aftermath of the Brexit vote, according to survey published. Rising labor costs, taxation and rent are all bolstering operating costs, the Federation of Small Businesses said. There are also concerns about a weaker domestic economy and flagging demand, and confidence at consumer-facing companies is among the lowest in the sectors surveyed. The proportion of firms reporting an increase in overseas sales is at a three-year high, according to the FSB. That view was echoed in a report by the Recruitment and Employment Confederation, which found that firms are concerned about filling vacancies in the future. The organization found that 33% of employers believe that economic conditions are getting worse. (Source: Bloomberg)
Japan: Exports grow by double digits for second straight month. Japan reported double-digit increases in exports and imports in August, as external and domestic demand supported a continued recovery in trade. Exports rose 18.1% YoY while imports climbed 15.2% YoY. The trade surplus was JPY 113.6b (USD 1.02b). (Source: Bloomberg)
Australia: Average weekly household income grew by AUD213 (USD170) between 2004 and 2008. Since then, it's increased by a total AUD27. The extremes roughly reflect a surge and fall in export income -- as industrializing China sent demand for iron ore and coal rocketing. But despite their stagnant wages, just over a quarter of Aussies have amassed debts equal to three times their income -- mostly as housing surged during a central bank easing cycle designed to cushion the end of the mining investment boom. (Source: Bloomberg) | |
| | | | | Other News:
AWC: Lands MYR24.4m job to maintain Palace of Justice. AWC has secured a RM24.38m contract to maintain the Palace of Justice in Putrajaya, which houses the Federal Court and Court of Appeal. The contract is valid for five years until September 2022. The asset and facilities management firm said the contract is an extension of its involvement in the commercial and healthcare segments.(Source: The Edge Financial Daily)
CCM: Proposes to buy the remaining 20% stake in its chemical division unit for MYR40m. The group has proposed to acquire the remaining 20% equity interest in CCM Chemicals S/B for MYR40m cash. It will be acquiring a 10% stake each from Lanjut Setia S/B and Permodalan Nasional Bhd (PNB) respectively. Upon the completion of the proposed acquisitions, CCM said CCM Chemicals will effectively be its wholly-owned subsidiary. (Source: The Edge Financial Daily)
Scientex: 4Q earnings up by a third to MYR72.1m. Its earnings rose by 33.2% to MYR72.13m in the fourth quarter ended July 31, 2017, boosted by its consumer and industrial packaging products and also its property business. Revenue was up 15.1% to MYR646.06m from MYR561.06m. Scientex said the group has started to see higher demand from its diverse range of products mainly due to the increased capacity of its plants. Export sales rose 20.1% from a year ago. (Source: The Star) | |
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