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| | | | | | | | | | | | | | | | Share Price: | MYR3.89 | Target Price: | MYR3.80 | Recommendation: | Hold | | |
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| | | Lacks immediate catalyst | | 3Q17 volume could be weaker QoQ but the low tax rate may offset the volume weakness and result in flattish 3Q17 earnings. Detailed studies of CT10-19 may complete in 1H19 and could provide some upside to our DCF if the expansion is approved by the Government. Our FY17E EPS is raised by 5% as we lower our tax rate assumption. Maintain HOLD and DCF-derived TP of MYR3.80 (WACC: 7.5%, 2025-54 growth rate: 2%). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,578.3 | 1,804.3 | 1,696.2 | 1,800.0 | EBITDA | 869.1 | 963.5 | 889.6 | 970.2 | Core net profit | 504.9 | 623.6 | 584.1 | 537.3 | Core EPS (sen) | 14.8 | 18.3 | 17.1 | 15.8 | Core EPS growth (%) | (1.4) | 23.5 | (6.3) | (8.0) | Net DPS (sen) | 11.1 | 14.0 | 12.8 | 11.8 | Core P/E (x) | 26.3 | 21.3 | 22.7 | 24.7 | P/BV (x) | 7.0 | 6.4 | 6.0 | 5.6 | Net dividend yield (%) | 2.9 | 3.6 | 3.3 | 3.0 | ROAE (%) | 27.6 | 32.1 | 27.3 | 23.5 | ROAA (%) | 12.8 | 14.9 | 12.8 | 11.2 | EV/EBITDA (x) | 17.0 | 16.0 | 16.3 | 14.8 | Net debt/equity (%) | 39.7 | 35.3 | 57.4 | 47.4 |
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| | | | | | MACRO RESEARCH | | | | | | | Brent Crude Oil, Treading into a New Territory
by Nik Ihsan Raja Abdullah |
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| | | | | | Renewed concerns over geopolitical tensions between the US and North Korea once again became the culprit of the regional selloff. At day's end, the FBMKLCI closed 3.55pts lower at 1,765.59, led by declines in GENM, PTG and DIGI. Market breadth was negative with losers outpacing gainers by 603 to 276. A total of 3.68b shares worth MYR2.73b changed hands. | |
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| | NEWS | | | Outside Malaysia:
U.S. Consumer confidence eases after storms hit Texas, Florida. U.S. consumer confidence eased in September from the second-highest level since late 2000 as attitudes deteriorated in states affected by hurricanes Harvey and Irma, according to figures from the New York-based Conference Board. Confidence index cooled to 119.8 from a downwardly revised 120.4 in August that remained the second-highest since December 2000. Present conditions measure dropped to 146.1 from 148.4. Gauge of consumer expectations climbed to 102.2 from 101.7. (Source: Bloomberg)
U.S: Home Prices in 20 cities increase more than forecast in July, reflecting solid demand against a backdrop of modest listings of properties, figures from S&P CoreLogic Case-Shiller showed. The 20-city property values index rose 5.8% YoY. National price gauge increased 5.9% YoY. Seasonally adjusted 20-city index advanced 0.3% MoM. (Source: Bloomberg)
E.U: ECB is said to start stress tests at Greek banks in February. The Bank of Greece plans to start stress tests for the country's four systemic banks in late February with a view to determine by June if they need fresh capital before the end of the Greek bailout program. European Central Bank President Mario Draghi said that the Single Supervisory Mechanism may front-load stress tests for Greek banks. As Greece prepares for a post-bailout era when the program ends in August, shrinking bad loans at banks has become the most pressing issue. At the end of the first semester non-performing loans, excluding off-balance sheet exposures, stood at EUR72.8b (USD86.4b), missing the target set by supervisory authorities for EUR72.4b. The non-performing exposure ratio was 50.6%, higher than the 50% target. (Source: Bloomberg)
China: Early data hint at slowing momentum amid factory clampdown. China's earliest economic indicators hinted that growth continued to moderate in September as official drives to curb debt risk and clear the skies weighed on activity. A gauge of activity at small companies edged down and an index of sales-manager sentiment weakened. The outlook was brighter elsewhere as a private steel-industry gauge jumped to a 12-month high amid price gains spurred by government curbs on output, and satellite images of manufacturing facilities showed activity was the strongest in six months. International investor confidence in the Chinese outlook improved in September. (Source: Bloomberg) | |
| | | | | Other News:
Vivovom: Bagged a MYR75m construction contract. The group has bagged a MYR75m construction contract for a mixed development in Terengganu from property developer Udaran S/B. The group will undertake the 36-month construction of two blocks of 372 units of serviced apartments and nine units of shoplots for Lembaga Tabung Amanah Warisan Negeri Terengganu in Kampung Ladang Tanjung. (Soure: The Edge Financial Daily)
Xin Hwa: Bags MYR21m contract related to Singapore infrastructure project. Its unit Xin Hwa Trading & Transport S/B has secured a MYR21.5m contract from BD Cranetech Pte Ltd to transport pre-cast element for the construction of rail and bus depot and reception tunnels in Singapore. The four-year contract would run from November 2017 to October 2021. (Source: The Star)
Green Packet: Acquires additional rights shares in G3 Global for MYR12.38m. The group has acquired an additional 82.5m rights shares in G3 Global Bhd for MYR12.38m. Upon completion of the rights issue and after taking into consideration Green Packet's subscription in full for its existing entitlement under the rights Issue as well as the additional entitlement, its shareholding in G3 Global is expected to increase from 22% to 32%. It noted that the acquisition is in line with the group's direction to make further strategic investment to strengthen its ICT equipment business. (Source: The Sun Daily) | |
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