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| | | | | | | | | | | | | | | | Share Price: | MYR5.29 | Target Price: | MYR5.90 | Recommendation: | Buy | | |
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| | | FY17 core earnings in-line | | Gamuda's FY7/17 core net profit was within expectations supported by its construction division from acceleration of KVMRT 2 works and its property segment with record presales of MYR2.4b in FY17. Gamuda's strong outstanding construction oderbook of MYR7.8b and unbilled property sales of MYR2.0b would support core earnings growth in FY18. Keep our earnings unchanged. Our RNAV-based TP is trimmed to MYR5.90 (-10sen) after updating i) latest property GDVs, ii) SMART impairment and iii) share base. | | |
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| | FYE Jul (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,121.9 | 3,211.4 | 4,031.6 | 4,032.3 | EBITDA | 548.5 | 831.2 | 804.9 | 907.5 | Core net profit | 626.1 | 700.6 | 761.9 | 823.2 | Core EPS (sen) | 26.0 | 24.2 | 22.6 | 24.4 | Core EPS growth (%) | (10.2) | (6.9) | (6.6) | 8.1 | Net DPS (sen) | 12.0 | 12.0 | 12.0 | 12.0 | Core P/E (x) | 20.4 | 21.9 | 23.4 | 21.7 | P/BV (x) | 1.9 | 2.1 | 2.3 | 2.1 | Net dividend yield (%) | 2.3 | 2.3 | 2.3 | 2.3 | ROAE (%) | 9.5 | 8.4 | 9.9 | 10.1 | ROAA (%) | 4.6 | 4.7 | 4.7 | 4.9 | EV/EBITDA (x) | 29.0 | 24.5 | 29.0 | 25.0 | Net debt/equity (%) | 55.2 | 59.8 | 60.9 | 48.7 |
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| | | | | | | | | | | | | | Share Price: | MYR2.18 | Target Price: | MYR2.49 | Recommendation: | Buy | | |
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| | | Better outlook ahead | | Having secured e.MYR930m of job wins YTD, outstanding orderbook stands at a robust e.MYR2b, providing decent earnings visibility. Precast contribution is also set to improve in 4Q17 when contribution from KVMRT 2 kicks in. Our FY17 job win assumption is raised to MYR1b as YTD job wins has exceeded our initial assumption of MYR700m. Earnings are raised by 2%-8% for FY17-19. We upgrade Kimlun to a BUY with a higher TP of MYR2.49 (+8%) based on unchanged 10x FY18 PER (+0.5SD). | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Revenue | 1,053.6 | 940.7 | 1,238.3 | 1,215.8 | EBITDA | 112.7 | 130.9 | 104.2 | 121.2 | Core net profit | 64.4 | 80.7 | 63.2 | 76.2 | Core EPS (sen) | 21.4 | 26.4 | 20.7 | 24.9 | Core EPS growth (%) | 90.5 | 23.0 | (21.7) | 20.5 | Net DPS (sen) | 5.8 | 6.5 | 5.6 | 6.7 | Core P/E (x) | 10.2 | 8.3 | 10.6 | 8.8 | P/BV (x) | 1.4 | 1.2 | 1.1 | 1.0 | Net dividend yield (%) | 2.7 | 3.0 | 2.6 | 3.1 | ROAE (%) | na | na | na | na | ROAA (%) | 6.8 | 8.2 | 6.0 | 6.6 | EV/EBITDA (x) | 4.3 | 5.1 | 6.7 | 5.9 | Net debt/equity (%) | 14.3 | 6.7 | 4.7 | 7.1 |
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| | | | | | | | | | | | | | Share Price: | MYR1.38 | Target Price: | MYR1.34 | Recommendation: | Hold | | |
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| | | Sale of 21% stake in MPI rejected | | That Generali's call option over a further 21% stake in MPI Generali (MPI) cannot be exercised is a setback for MPHB. This development means that MPHB will find it harder to monetize its investment in MPI and it creates more uncertainty as to when the group can resume dividend/capital repayments, if any. We maintain our HOLD call but raise our RNAV discount to 50% from 30% previously to reflect this uncertainty. Our SOP-derived TP is therefore cut to MYR1.34 from MYR1.87. | | |
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| | FYE Dec (MYR m) | FY15A | FY16A | FY17E | FY18E | Core net profit | 41.2 | 41.1 | 37.6 | 42.5 | Core EPS (MYR) | 0.06 | 0.06 | 0.05 | 0.06 | Core EPS growth (%) | (23.8) | (0.2) | (8.5) | 13.0 | Net DPS (MYR) | 0.00 | 0.00 | 0.00 | 0.00 | Core P/E (x) | 23.9 | 24.0 | 26.2 | 23.2 | P/BV (x) | 0.6 | 0.6 | 0.6 | 0.6 | Net dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | Book value (MYR) | 2.23 | 2.30 | 2.35 | 2.41 | ROAE (%) | 2.8 | 2.5 | 2.3 | 2.5 | ROAA (%) | 1.5 | 1.4 | 1.2 | 1.3 |
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| | | | | | MACRO RESEARCH | | | | | | | Nasdaq 100 Index: Stronger Base has been Established
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell 6.18pts to 1,758.06 yesterday after succumbed to another round of selling pressure led by declines in ASTRO, WPRTS and GENM. Market breadth turned negative with losers outpacing gainers by 506 to 328. A total of 2.31b shares worth MYR2.18b changed hands. FBMKLCI extended its losing streak to eighth consecutive day. But as the index is treading near its support level, there is a glimpse of hope that bargain hunting may surface today. | |
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| | NEWS | | | Outside Malaysia:
U.S: Jobless claims rise on Irma's effects in Florida, Georgia. U.S. filings for unemployment benefits rose last week on increases in Florida and Georgia after the south-eastern states were hit by Hurricane Irma, Labor Department figures showed. Initial filings rose 12k to 272k. Continuing claims decreased by 45k to 1.934m in week ended Sept. 16. Four-week average of initial claims, a less-volatile measure than the weekly figure, rose to 277,750, highest since Feb. 2016, from 268,750 in prior week. (Source: Bloomberg)
E.U: Euro-area economic confidence surged more than forecast in September, giving European Central Bank policy makers more positive news to consider as they decide on the future of their bond-buying program. The index of industry and consumer sentiment increased to 113 in September from 111.9 the previous month, the European Commission said. The central bank's Governing Council will have to weigh a booming economy against inflation showing few signs of a sustained pickup toward its goal, when it decides on adjustments to the asset purchase program on Oct. 26. (Source: Bloomberg)
Japan: Inflation rises 0.7% YoY in August amid tight job market. Japanese prices extended their run of gains to eight months, rising the most in more than two years. While that's progress, it still leaves inflation at less than half the central bank's target, despite the tightest labor market in decades. Core consumer prices, which exclude fresh food, increased 0.7% YoY in August. Excluding fresh food and energy, prices rose 0.2% YoY. The unemployment rate remained at 2.8% .Household spending rose 0.6% YoY. (Source: Bloomberg)
Indonesia: Central bank said it will continue to intervene in the foreign-exchange market to support the currency after the rupiah slumped to the lowest in almost 10 months against the dollar. Bank Indonesia will continue to guard the currency in line with fundamentals and still maintains an exchange rate target of 13,420 rupiah per dollar for the year end, Dody Budi Waluyo, executive director of economic and monetary policy, told Bloomberg. (Source: Bloomberg) | |
| | | | | Other News:
MCE Holdings: Wins MYR33m Perodua parts supply deal. The group has bagged contracts worth MYR33m to supply various electronic and mechatronic components and parts for Perodua's new car models. The automotive parts manufacturer and trader said the job — with an expected total investment cost of MYR1m — is expected to begin sometime between May and July next year, and is for a seven-year period. (Source: The Edge Financial Daily)
Matang: Setback for Matang in MYR180m land acquisition in Raub. Matang's plan to acquire two parcels of leasehold agricultural land with property erected thereupon in Raub, Pahang, for MYR180m was held back by an injunction granted by the High Court.The company today received a letter from one of the parties involved in the sale, Raub Mining & Development Co S/B, informing it that the disposal of the assets will be put on hold due to the injunction. (Source: The Edge Financial Daily) | |
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