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| | | | | | | | | | | | | | | | Share Price: | MYR5.25 | Target Price: | MYR7.85 | Recommendation: | Buy | | |
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| | | MYR50,000 impact from TE3 fire | | The source of the fire at TE3 on 20 Sep (link) was due to residual vapor in contact with process steam. The damage was burnt cables and the cost of repair should not exceed MYR50,000, according to the company. More importantly, the TE3 project commissioning has resumed and is on track for commercial start-up in 4Q17. The cost of repair is immaterial; therefore there is no change to our earnings forecasts and TP of MYR7.85 (pegged to global peer average 2017 EV/EBITDA of 8.2x). Maintain BUY. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 8,147.8 | 8,136.6 | 8,003.8 | 10,523.6 | EBITDA | 1,548.0 | 2,193.0 | 1,769.6 | 2,468.4 | Core net profit | 625.9 | 1,396.5 | 1,193.5 | 1,555.9 | Core EPS (sen) | 36.2 | 80.8 | 52.5 | 68.5 | Core EPS growth (%) | nm | 123.1 | (35.0) | 30.4 | Net DPS (sen) | 5.9 | 6.9 | 17.4 | 22.6 | Core P/E (x) | 14.5 | 6.5 | 10.0 | 7.7 | P/BV (x) | 1.5 | 1.1 | 1.0 | 0.9 | Net dividend yield (%) | 1.1 | 1.3 | 3.3 | 4.3 | ROAE (%) | 11.3 | 18.6 | 11.8 | 11.9 | ROAA (%) | 9.4 | 16.7 | 10.3 | 10.7 | EV/EBITDA (x) | na | na | 4.9 | 4.1 | Net debt/equity (%) | net cash | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR7.38 | Target Price: | MYR7.60 | Recommendation: | Hold | | |
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| | | Exit tank terminal business | | Cash proceed of MYR193m is insignificant to the Group but the disposal is in line with the Group's strategy of disposing non-core assets. Though petroleum tanker rates fell sharply in Jul-Aug 2017, the hurricanes have led to a jump in tanker rates in Sep 2017, hence, 3Q17 earnings could be flattish QoQ. Maintain our earnings forecasts, HOLD call and SOP-based TP of MYR7.60. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 10,908.4 | 9,597.2 | 8,784.7 | 9,181.4 | EBITDA | 3,913.2 | 3,898.8 | 4,114.8 | 4,426.5 | Core net profit | 2,782.0 | 1,914.0 | 1,938.3 | 2,095.0 | Core EPS (sen) | 62.3 | 42.9 | 43.4 | 46.9 | Core EPS growth (%) | 43.2 | (31.2) | 1.3 | 8.1 | Net DPS (sen) | 20.0 | 30.0 | 30.4 | 32.8 | Core P/E (x) | 11.8 | 17.2 | 17.0 | 15.7 | P/BV (x) | 0.9 | 0.9 | 0.9 | 0.8 | Net dividend yield (%) | 2.7 | 4.1 | 4.1 | 4.4 | ROAE (%) | na | na | na | na | ROAA (%) | 6.2 | 3.7 | 3.4 | 3.7 | EV/EBITDA (x) | 11.2 | 10.3 | 9.9 | 9.4 | Net debt/equity (%) | 2.3 | 15.4 | 15.2 | 16.9 |
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| | | | | | | | | | | | | | Share Price: | MYR1.99 | Target Price: | MYR2.26 | Recommendation: | Buy | | |
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| | | Ups stake in Langsat CTF to 80% | | We are positive on Dialog's plan to buy out MISC's 36% stake in the Tj. Langsat storage terminals. It is: (i) a vertical expansion, (ii) earnings accretive (+4-6%; MYR14m-18m p.a.), (iii) to add 4-5% (10-12sen) to our SOP-based TP, (iv) financially viable and (v) a further consolidation of Dialog's position in the Malaysia/SEA market. There is further room for growth beyond its 647,000 cu m capacity there, on 50 acres of land. | | |
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| | FYE Jun (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,534.5 | 3,392.9 | 3,440.0 | 3,540.0 | EBITDA | 385.4 | 475.0 | 408.5 | 418.7 | Core net profit | 261.0 | 328.2 | 342.1 | 427.0 | Core EPS (sen) | 5.0 | 6.1 | 6.4 | 7.9 | Core EPS growth (%) | (0.9) | 20.8 | 4.2 | 24.8 | Net DPS (sen) | 2.2 | 2.6 | 2.7 | 3.4 | Core P/E (x) | 39.4 | 32.7 | 31.3 | 25.1 | P/BV (x) | 4.3 | 3.4 | 3.2 | 3.0 | Net dividend yield (%) | 1.1 | 1.3 | 1.4 | 1.7 | ROAE (%) | 13.4 | 13.4 | 10.7 | 12.4 | ROAA (%) | 6.7 | 6.6 | 6.1 | 7.6 | EV/EBITDA (x) | 20.7 | 21.9 | 28.0 | 27.3 | Net debt/equity (%) | net cash | net cash | 18.7 | 16.5 |
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| | | | | | | | | | | | | | Share Price: | MYR2.20 | Target Price: | MYR2.45 | Recommendation: | Hold | | |
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| | | 3QFY17: In line | | Bison's 3QFY10/17 results were within expectations. YTD 9MFY17, it has 44 net store openings and is on track to meet its targeted 70 new stores for FY17. Elsewhere, we understand that the targeted completion of date for construction of its new food processing and distribution facility is unchanged - by end CY18. We keep our earnings forecasts and HOLD call with an unchanged TP of MYR2.45 (unchanged 26x CY18 PER, based on peer average). | | |
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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) | 50.5 | 35.4 | 27.8 | 23.4 | P/BV (x) | 12.3 | 4.5 | 4.0 | 3.5 | Net dividend yield (%) | 0.1 | 0.7 | 0.9 | 0.9 | ROAE (%) | 27.6 | 17.4 | 15.2 | 16.0 | ROAA (%) | 14.9 | 12.7 | 11.3 | 11.7 | EV/EBITDA (x) | na | 17.2 | 19.2 | 15.1 | Net debt/equity (%) | 4.6 | net cash | net cash | net cash |
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| | | | | | | | | | | | | | Share Price: | MYR2.67 | Target Price: | MYR2.80 | Recommendation: | Buy | | |
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| | | China ops' 2HFY17 headline profit hit by one-offs | | 43.6%-owned VSIG's (1002 HK, Not Rated) 2HFY17 headline net profit was hit by negative one-offs. Nonetheless, excluding the exceptional losses, FY17 core earnings marginally fell short at 88% of our full-year forecast; VSIG is estimated to contribute ~4% to VSI's FY17 PATAMI. Pending VSI's results release, due on 27th Sep, we maintain our earnings forecasts. Our BUY rating and MYR2.80 TP (17.5x CY18 PER) are unchanged. | | |
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| | FYE Jul (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,936.9 | 2,175.6 | 2,968.4 | 4,022.0 | EBITDA | 239.2 | 226.4 | 305.5 | 414.3 | Core net profit | 135.7 | 135.1 | 160.4 | 231.2 | Core FDEPS (sen) | 10.4 | 8.5 | 10.1 | 14.6 | Core FDEPS growth(%) | 111.8 | (18.2) | 18.8 | 44.1 | Net DPS (sen) | 4.8 | 4.7 | 5.2 | 7.0 | Core FD P/E (x) | 25.6 | 31.3 | 26.3 | 18.3 | P/BV (x) | 4.5 | 3.9 | 3.2 | 2.7 | Net dividend yield (%) | 1.8 | 1.8 | 1.9 | 2.6 | ROAE (%) | 20.4 | 14.2 | 15.7 | 17.7 | ROAA (%) | 8.0 | 7.0 | 7.5 | 9.3 | EV/EBITDA (x) | 8.5 | 9.2 | 13.2 | 10.3 | Net debt/equity (%) | 17.2 | 18.4 | 10.1 | 4.2 |
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| | | | | | MACRO RESEARCH | | | | | | | FBMKLCI Index: Consolidation Toward Critical Support Level
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell 1.90pts to 1,769.14 yesterday, led by declines in banking stocks such as AMM and RHBBANK. The selloff in regional markets also weighed on the broader market. At day's end, losers outpaced gainers by 626 to 259. A total of 2.46b shares worth MYR2.36b changed hands. As geopolitical tensions between the US and North Korea heightened, investors may switch into risk-off mode today. The selloff in US technology stocks may also dampen interest on local tech stocks. | |
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| | NEWS | | | Outside Malaysia:
E.U: Draghi says Euro Area still requires ECB monetary support. Mario Draghi said the European Central Bank will keep as much stimulus as the euro-area economy needs when policy makers decide to adjust their EUR2.3tr (USD 2.7tr) bond-buying program later this year. Speaking in Brussels, the ECB President pointed to uncertainties about the medium-term outlook for inflation as he presented an upbeat picture of economic recovery after 17 consecutive quarters of growth and unemployment at the lowest level in eight years. He stressed there was no pre-set size for the central bank's balance sheet, which depended on the instruments the central bank was using and the state of the economy. (Source: Bloomberg)
Germany: Business confidence unexpectedly weakened for a second month in September, in a sign that Europe's largest economy is struggling to improve on its current brisk pace of expansion. The Ifo Institute's gauge of business sentiment dropped to 115.2 in September. While that's still near a record high, it's down from 115.9 in August. The Bundesbank said this month that third-quarter growth momentum will be "slightly" lower than in the first half. German businesses have been boosted by years of tailwinds from a weak euro and ultra-cheap borrowing costs, helping job creation that has cut unemployment to a record low and lifted consumer spending. (Source: Bloomberg)
Japan: Prime Minister Shinzo Abe announced a JPY2t (USD18b) spending package to expand access to education and cut waiting times at child-care centres. He made the comments shortly before his coalition partner said an election would be held, likely on Oct. 22. Abe said he would make use of revenue from a planned consumption-tax hike set to take effect in October 2019. Revenue from increasing the sales levy had previously been marked mostly to replace deficit spending on the social safety net. The plan would make pre-school education for children age 3 to 5 free, and provide free child care for those under age 2 for low-income families. (Source: Bloomberg)
S. Korea: Consumer confidence in September falls to 107.7 from 109.9. Households' inflation expectation for next 12 months unchanged at 2.6%, Bank of Korea says in a statement. The survey was based on responses from 2,013 households across the nation, conducted between 12-19 September. A reading below 100 indicates that pessimists outnumber optimists. (Source: Bloomberg)
Vietnam: Sees rising remittances helping keep currency stable. Vietnam expects rising remittances from overseas Vietnamese to help keep the currency stable, allowing the central bank to focus on supporting economic growth, a senior official says. Nguyen Hoang Minh, deputy head of State Bank of Vietnam in Ho Chi Minh, says remittances to the city are forecast to rise 10% to USD 5.5b this year. Rising remittances have helped to ensure enough dollar supply to meet demand from companies and individuals, while also allowing the central bank to build foreign-exchange reserves. (Source: Bloomberg) | |
| | | | | Other News:
Damansara Realty: Secures MYR27.6m contract for Petronas' Pengerang project. A consortium comprising Damansara Realty Bhd's 95.5%-owned TMR Urusharta (M) S/B and Kumpulan Perubatan (Johor) S/B has won a MYR27.62m contract to provide medical services for development facilities for Petronas' Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor. TMR's scope of work is to provide the management of medical services in the contract. The duration of the contract will be for 39 months from Sept 25, with additional optional services worth MYR7.8m. (Source: The Edge Financial Daily)
HLT Global: Plans 1-for-2 bonus shares, free warrants. The group is planning a bonus issuance of up to 132.96m new shares in the company, on the basis of one bonus share for every two existing shares held on an entitlement date to be determined later. The rubber glove dipping line service provider has also proposed to issue up to 199.44m free warrants, on the basis of three warrants for every four HLT Global shares held on the same entitlement date. The bonus shares will not be entitled for the bonus warrants. (Source: The Edge Financial Daily)
Foundpac: Buys stake in laser stencils manufacturer for MYR16.5m. Foundpac Group is acquiring a 75% stake in Dynamic Stencil S/B (DSSB) for MYR16.5m. DSSB is principally engaged in the manufacture and sale of laser stencils. It registered a net profit of MYR1.9m for the financial year ended May 31, 2017. The purchase consideration is to be funded from internally-generated funds. It said the proposed acquisition is an opportune venture for the group to market laser stencils, which serves as a complementary component, to its customers. (Source: The Sun Daily)
Ho Wah Genting: Partners Switzerland's Dufry to start duty-free shop in Genting Highlands. The group is setting up a 49%-51% joint venture (JV) company with Switzerland's Dufry Group to operate a duty-free shop in SkyAvenue mall at Genting Highlands Resort, Pahang. With an expected initial investment of MYR9m for the JV company, Ho Wah Genting said the venture will help tap into Dufry Group's strength in travel retail business amid its expansion into the travel retail business. (Source: The Edge Financial Daily) | |
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