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| | | | | | | | | | | | | | | | Share Price: | MYR3.56 | Target Price: | MYR4.20 | Recommendation: | Buy | | |
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| | | 1HFY18 results preview | | We expect 2QFYE1/18 results, due this week, to track to expectations, with stronger QoQ earnings, fuelled by maiden contributions from FPSO JAK. We remain positive on Yinson, for its earnings growth and tender pipeline prospects as well as its cashflow strength. There is no change to our earnings forecasts, and SOP-based TP. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,038.6 | 764.2 | 893.2 | 1,139.7 | EBITDA | 261.0 | 283.8 | 509.2 | 693.0 | Core net profit | 173.1 | 219.5 | 264.0 | 242.2 | Core EPS (sen) | 16.2 | 20.6 | 24.7 | 22.7 | Core EPS growth (%) | 17.5 | 26.8 | 20.3 | (8.3) | Net DPS (sen) | 1.5 | 16.8 | 1.8 | 1.9 | Core P/E (x) | 21.9 | 17.3 | 14.4 | 15.7 | P/BV (x) | 1.7 | 1.6 | 1.3 | 1.2 | Net dividend yield (%) | 0.4 | 4.7 | 0.5 | 0.5 | ROAE (%) | 12.0 | 8.5 | 9.8 | 7.9 | ROAA (%) | 4.8 | 3.9 | 4.0 | 3.5 | EV/EBITDA (x) | 15.6 | 21.4 | 12.2 | 8.4 | Net debt/equity (%) | 51.9 | 114.7 | 80.4 | 60.7 |
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| | | | | | | | | | | | | | Share Price: | MYR2.60 | Target Price: | MYR2.90 | Recommendation: | Hold | | |
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| | | About the explosion | | On 21 Sep 2017, an explosion occurred at OTB's sole central kitchen in Subang Jaya (Selangor) and there were up to eight injured. Investigations are ongoing and with down time at its central kitchen, OTB is drawing on its buffer/inventories at its outlet and also outsourcing suppliers. The financial impact is likely contained, in our view. Meanwhile, its FMCG operations (plant in Ipoh, Perak) are unaffected. | | |
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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 | 65.6 | 69.8 | 75.8 | Core EPS (sen) | 11.9 | 14.2 | 15.1 | 16.4 | Core EPS growth (%) | 6.1 | 18.6 | 6.5 | 8.5 | Net DPS (sen) | 9.0 | 10.0 | 8.3 | 9.0 | Core P/E (x) | 21.8 | 18.4 | 17.2 | 15.9 | P/BV (x) | 3.3 | 3.2 | 3.0 | 2.8 | Net dividend yield (%) | 3.5 | 3.8 | 3.2 | 3.5 | ROAE (%) | 15.0 | 16.6 | 18.1 | 18.1 | ROAA (%) | 12.5 | 14.5 | 14.8 | 14.9 | EV/EBITDA (x) | 6.4 | 11.5 | 9.5 | 8.7 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | SECTOR RESEARCH | | | | | | | Aug 2017 adex: SEA Games and Merdeka led improvement
by Samuel Yin Shao Yang |
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| | | | | | Total gross adex growth in Aug 2017 eased 2% YoY, the narrowest YoY decline since Jun 2016. We understand that this was due to the SEA Games, Merdeka celebrations and a low base. We are hopeful that this signals a gradual recovery in adex sentiment as the YoY decline in private ad spend also narrowed substantially. While we await more positive data points, our 2017 total gross adex growth forecast is unchanged at -10%; 2018 growth forecast is +5% YoY. Maintain NEUTRAL on the sector. | |
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| | | | MACRO RESEARCH | | | | | | | Reserves up and adequate
by Suhaimi Ilias |
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| | | | | | Total gross external reserves rose +USD0.3b to USD100.8b at mid-Sep 2017 (end-Aug 2017: USD100.5b) amid signs of portfolio capital inflows given MYR gain so far this month. Current reserves level is also adequate to deal with potential capital flow risk based on its ratio to IMF's Assessment of Reserve Adequacy (ARA) metric of 115%. | |
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| | | | | | | | DJIA Index Bull Run Dissection & Banking Stocks in Picture
by Nik Ihsan Raja Abdullah |
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| | | | | | We analyse Dow Jones Industrial Average Index (INDU Index) chart since year 1,896. This gives us a clearer picture on how the market has evolved. Broadly, there were three major bull runs over the past century: 1) year 1942-1965; 2) year 1978-2000; and 3) 2009 until present; and the longest bull run lasted for 24 years. Judging from recent trends, we believe the current bull is still young, and the benchmark index could charge towards 25,000 over the longer-term. | |
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| | NEWS | | | Outside Malaysia:
E.U: Euro-Area economy is on track for best quarter since 2015. The euro-area economy may have grown at the fastest pace in more than two years in the third quarter after an unexpected upturn in September. IHS Markit's index of private-sector activity jumped to a four-month high of 56.7 from 55.7 in August. Both services and manufacturing strengthened, with a gauge for the latter reaching a level not seen in more than six years. Markit said the economy showed a "burst of activity" in September and its surveys point to economic growth of 0.7% over the quarter. That would be the fastest since the start of 2015. Some companies raised concerns about the strength of the euro, but Markit said the currency appears so far to have had "only a modest impact on exports." (Source: Bloomberg)
Indonesia: Lowers interest rate for a second straight month. Indonesia's central bank cut its benchmark interest rate by a quarter percentage point for a second month in a row, taking advantage of low inflation to help boost growth in Southeast Asia's biggest economy. Governor Agus Martowardojo and his board lowered the seven- day reverse repurchase rate to 4.25%, the eighth reduction since the beginning of last year. (Source: Bloomberg)
Philippine: Increases oversight of bank real-estate exposure. The Philippines central bank will require banks to disclose more details on real-estate and infrastructure lending next year to improve financial surveillance. In a statement posted on its website, Bangko Sentral ng Pilipinas said lenders will need to report more information on real-estate loans to mid- and high-end housing units and for low-cost housing. Banks will also have to disclose the specific use of commercial loans, according to the statement. "The reportorial enhancements form part of BSP's macro prudential toolkit and are being deployed to sharpen the BSP's assessment of banking-system exposures to the property sector," the central bank said. (Source: Bloomberg)
Crude Oil: Holds gains as OPEC and Russia signal cuts working. The OPEC-led group implemented more than 100 percent of its agreed cuts last month and bloated stockpiles have been "massively drained," OPEC Secretary-General Mohammad Barkindo said in Vienna. Russia signalled it would be willing to extend supply curbs past the end of March if needed. Oil has advanced more than 7% this month on forecasts for rising crude demand and as U.S. Gulf Coast refineries continued to resume operations after Hurricane Harvey. Drillers targeting crude in America reduced the rig count for a third straight week to the lowest level since June, according to Baker Hughes. Brent for November settlement was USD 56.88/bbl. (Source: Bloomberg) | |
| | | | | Other News:
UEM Edgenta: Gets MYR6.8m engineering services job from Malaysia Airlines. The group has bagged an engineering services contract from Malaysia Airlines worth MYR6.75m.The contract, awarded to its 80%-owned unit KFM Holdings S/B, covers rectification works, making good defects for mechanical and electrical systems, and civil and structure services over a period of six months. (Source: The Edge Financial Daily)
Spritzer: To raise MYR63.8m for warehouse expansion. Spritzer has proposed an issuance of up to 27.4m new shares to Tasik Puncak Holdings Ltd to raise up to MYR63.81m to fund the expansion of warehouse facilities in Taiping. Upon completion of the exercise, Tasik Puncak Holdings, which currently does not hold any shares in the group, will emerge as its substantial shareholder with a 13.04% stake. It will use MYR45m of the proceeds to fund the construction of an automated warehouse, while the remaining will be used for working capital and estimated expenses related to the exercise.(Source: The Sun Daily)
Sentoria: Plans bonus and rights issues, seeks to raise MYR52.8m. The group is proposing a 1-for-10 bonus issue of up to 52.8m new shares, and a rights issue of up to 211.2m warrants at 25 sen each on the basis of four warrants for every 10 shares held. The group is seeking to raise up to MYR52.8m from the rights issue to be used mainly as working capital for its property development projects in Kuantan, Kuching and Morib. The exercise price of the warrants has been fixed at 60 sen. (Source: The Edge Financial Daily)
Poh Kong: 4Q net profit jumps more than five times. Its net profit leapt over five times in its fourth quarter ended July 31, 2017 (4QFY17) to MYR14.32m from MYR2.84m previously, thanks to brisk sales. Quarterly revenue grew 31% to MYR259.98m from MYR198.35m a year ago, mainly due higher demand for gold jewellery and gold investment products, higher retail gold prices, and contribution from new outlets. For FY17, its net profit more than doubled to MYR29.57m from MYR11m in FY16, while revenue grew 13% to MYR876.99m from MYR776.53m. (Source: The Edge Financial Daily) | |
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