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| | | | | | | | | | | | | | | | Share Price: | MYR2.53 | Target Price: | MYR3.18 | Recommendation: | Buy | | |
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| | | The best is yet to come | | FY7/17 core net profit of MYR176m (+30% YoY) trounced expectations at 110% of our/consensus forecasts. Coming quarters, we expect even stronger earnings growth momentum, driven by much larger orders at its box-build segment as its key client roll out new products in FY18. On that, we lift FY18/FY19 earnings forecasts by 14%/22%, TP to MYR3.18 (+14%), pegged to unchanged 17.5x CY18 FD EPS (in line with peers). | | |
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| | FYE Jul (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 2,175.6 | 3,281.3 | 4,497.0 | 5,328.3 | EBITDA | 226.4 | 322.0 | 488.1 | 569.9 | Core net profit | 135.4 | 175.6 | 263.8 | 319.9 | Core EPS (sen) | 8.6 | 11.1 | 16.7 | 20.2 | Core EPS growth (%) | (18.0) | 29.7 | 50.2 | 21.3 | Net DPS (sen) | 4.7 | 5.9 | 8.3 | 10.1 | Core P/E (x) | 29.6 | 22.8 | 15.2 | 12.5 | P/BV (x) | 4.5 | 3.8 | 3.4 | 3.0 | Net dividend yield (%) | 1.9 | 2.3 | 3.3 | 4.0 | ROAE (%) | 14.2 | 16.1 | 23.5 | 25.2 | ROAA (%) | 7.1 | 7.2 | 8.6 | 9.3 | EV/EBITDA (x) | 10.9 | 12.8 | 9.8 | 8.4 | Net debt/equity (%) | 18.4 | 31.9 | 38.7 | 33.3 |
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| | | | | | | | | | | | | | Share Price: | MYR3.48 | Target Price: | MYR4.45 | Recommendation: | Buy | | |
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| | | 1HFY1/18 results: Beat expectations | | 1HFY18 results were above expectations, on stronger-than-expected contributions from FPSO JAK in 2QFY18. Dividend also surprised. We upgrade FY18-20 earnings forecasts by 28%-42%, DPS by 5x to 10sen p.a. and TP by 6% to MYR4.45. We remain upbeat on Yinson, for its steady earnings growth and visible tender pipeline prospects, cashflow strength and dividends visibility. Our revised SOP-based TP offers a 28% upside. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 1,038.6 | 764.2 | 1,000.5 | 1,139.7 | EBITDA | 261.0 | 283.8 | 560.9 | 697.6 | Core net profit | 173.1 | 219.5 | 375.3 | 340.5 | Core EPS (sen) | 16.2 | 20.6 | 35.2 | 31.9 | Core EPS growth (%) | 17.5 | 26.8 | 71.0 | (9.3) | Net DPS (sen) | 1.5 | 16.8 | 10.4 | 10.0 | Core P/E (x) | 21.5 | 16.9 | 9.9 | 10.9 | P/BV (x) | 1.7 | 1.5 | 1.2 | 1.1 | Net dividend yield (%) | 0.4 | 4.8 | 3.0 | 2.9 | ROAE (%) | 12.0 | 8.5 | 13.7 | 10.7 | ROAA (%) | 4.8 | 3.9 | 5.6 | 4.8 | EV/EBITDA (x) | 15.6 | 21.4 | 10.7 | 8.1 | Net debt/equity (%) | 51.9 | 114.7 | 72.9 | 54.9 |
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| | | | | | | | | | | | | | Share Price: | MYR1.61 | Target Price: | MYR2.00 | Recommendation: | Buy | | |
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| | | 1HFY18: Results a miss | | 1HFY1/18 results came in below ours/consensus, leading to a 26%-129% cut in our FY18-20 earnings forecasts and SOP-based TP (-13%). While we expect a knee-jerk reaction to share price post these weak results as the street cuts earnings, its long-term prospect remains intact. The weak FY18 has been well flagged and orders replenishment is recovering. Monetising its gas assets is a major catalyst. These three factors form our BUY thesis for SAPE. | | |
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| | FYE Jan (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 10,184.0 | 7,651.3 | 6,410.5 | 6,990.5 | EBITDA | 3,056.4 | 3,913.3 | 2,385.8 | 2,555.7 | Core net profit | 1,009.4 | 447.3 | (38.2) | 171.1 | Core EPS (sen) | 16.9 | 7.5 | (0.6) | 2.9 | Core EPS growth (%) | (16.8) | (55.5) | nm | nm | Net DPS (sen) | 1.4 | 1.0 | 1.0 | 3.0 | Core P/E (x) | 9.5 | 21.4 | nm | 56.0 | P/BV (x) | 0.8 | 0.7 | 0.7 | 0.7 | Net dividend yield (%) | 0.8 | 0.6 | 0.6 | 1.9 | ROAE (%) | (6.5) | 1.6 | 0.3 | 1.3 | ROAA (%) | 2.8 | 1.2 | (0.1) | 0.5 | EV/EBITDA (x) | 9.0 | 6.5 | 10.3 | 9.4 | Net debt/equity (%) | 134.1 | 115.7 | 115.3 | 110.6 |
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| | | | | | | | | | | | Glomac (GLMC MK)
by Wei Sum Wong |
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| | | | | Share Price: | MYR0.65 | Target Price: | MYR0.71 | Recommendation: | Hold | | |
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| | | An uninspiring start | | Glomac's 1QFY4/18 results came in below our expectation as margins surprised on the downside. 3MFY4/18 locked-in property sales also fell short due to the lack of new launches in 1QFY4/18, but could pick up in subsequent quarters with projects worth MYR810m of GDV to be launched. Our earnings forecasts and MYR0.71 TP are unchanged pending updates from management. Maintain HOLD. | | |
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| | FYE Apr (MYR m) | FY16A | FY17A | FY18E | FY19E | Revenue | 616.6 | 581.8 | 491.2 | 595.3 | EBITDA | 166.1 | 282.4 | 104.7 | 123.4 | Core net profit | 70.9 | 29.5 | 51.0 | 70.6 | Core EPS (sen) | 9.8 | 4.1 | 7.1 | 9.8 | Core EPS growth (%) | 30.0 | (58.4) | 72.6 | 38.5 | Net DPS (sen) | 4.0 | 3.0 | 1.4 | 2.0 | Core P/E (x) | 6.6 | 15.9 | 9.2 | 6.6 | P/BV (x) | 0.5 | 0.4 | 0.4 | 0.4 | Net dividend yield (%) | 6.2 | 4.6 | 2.2 | 3.0 | ROAE (%) | 8.4 | 10.7 | 4.6 | 6.1 | ROAA (%) | 3.7 | 1.5 | 2.5 | 3.2 | EV/EBITDA (x) | 5.8 | 2.9 | 7.5 | 6.8 | Net debt/equity (%) | 30.0 | 23.6 | 23.2 | 26.5 |
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| | | | | | MACRO RESEARCH | | | | | | | Shanghai Steel Futures: Buying Interest Emerges
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell for the seventh conservative day after easing 1.35pts to close at 1,764.24 yesterday, led by declines in GENT, WPRTS and CIMB. Market breadth, however, was slightly positive with gainers outpacing losers by 401 to 376. A total of 2.21b shares worth MYR2.15b changed hands. With selling pressure tapering off coupled with gains in overnight US markets, there is a glimpse of hope that market may stage a rebound today on bargain hunting activities. | |
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| | NEWS | | | Outside Malaysia:
U.S: Gain in capital goods orders shows solid investment. U.S. orders for business equipment increased more than forecast in August, indicating solid demand is continuing in the third quarter, Commerce Department figures showed. Non-military capital goods orders excluding aircraft rose 0.9% after climbing 1.1% the prior month. Shipments of those goods, which are used to calculate gross domestic product, increased 0.7% after a revised 1.1% advance. Bookings for all durable goods climbed 1.7% following a 6.8% decrease. (Source: Bloomberg)
U.S: Pending home sales decline by most since January. Contract signings for the purchase of previously owned U.S. homes fell in August by the most in seven months, reflecting limited inventory, the National Association of Realtors said. The Realtors group's revised forecast for the year calls for sales to weaken from 2016 in the wake of two hurricanes. Index dropped 2.6% after a 0.8% decline. Gauge fell 3.1% YoY from August 2016 on unadjusted basis. Contract signings in the South were affected by Harvey, NAR says. (Source: Bloomberg)
U.K: Consumer picks up as retail sales surge most in two years. U.K. retailers reported the fastest sales growth in more than two years this month as grocery and clothes volumes jumped. The Confederation of British Industry said its monthly retail index jumped to the highest since September 2015. Meanwhile, the measure of expected sales for October climbed to the highest level in 10 months. The pickup in spending tallies with data from the Office for National Statistics, released earlier this month, which showed retail sales rose in August at a faster pace than economists forecast. That suggests that consumer spending is starting recover after being held back by faster inflation in the wake of the U.K.'s decision to leave to the European Union. The CBI report also showed that motor traders saw sales outstripping expectations, with volumes growing at the fastest pace since March. Furniture stores and specialist food and drink outlets reported falling sales. (Source: Bloomberg)
China: Industrial profits increased 24% YoY in August, the most in four years, compared with the 16.5% YoY pace a month earlier, the statistics bureau said. Profits in the first eight months of the year climbed 21.6% YoY, with statistics officials attributing the jump to faster producer-price inflation and lower costs. Profit growth accelerated as producer inflation picked up amid a decline in input costs, the statistics bureau said in a statement. Oil, steel and electronics led the gains, while corporate leverage has shown a decline, it said. (Source: Bloomberg)
Thailand: Bank of Thailand held its benchmark interest rate near a record low, spurning the government's call for policy easing as it painted a brighter outlook for the economy. The one-day bond repurchase rate was left at 1.5%, with monetary policy committee members voting unanimously in favour, the Bank of Thailand said. (Source: Bloomberg) | |
| | | | | Other News:
PRG Holdings: To co-develop MYR5b worth of affordable housing projects. The group has teamed up with Syarikat Perumahan Negara Bhd (SPNB) to jointly develop MYR5b worth of affordable housing projects. PRG said the projects will be undertaken by newly-formed joint venture company Premier Aspirasi Development S/B (PADSB), where SPNB Aspirasi S/B, a unit of SPNB, will hold a 51% stake and PRG's wholly-owned unit Premier JPC S/B, the remaining 49%. (Source: The Edge Financial Daily)
Guan Chong: Wins bid to acquire butter manufacturing assets for USD8.4m. Guan Chong has won the bid to acquire the assets of two companies for USD8.39m (MYR35.43m) in a sale authorised by a bankruptcy court in New York.The assets comprise a fully-furnished building with its inventories in New Jersey, a butter melting plant, a butter deodoriser plant and a liquor melting plant, all intellectual property assets owned by the sellers as well as other inventories, including finished goods and work-in-progress (Source: The Edge Financial Daily)
Wong Engineering: 3Q Profit jumps over 37 times on-year. Its net profit jumped over 37 times YoY in its third quarter ended July 31, 2017, thanks to higher revenue and better operational efficiency. Net profit for the quarter came in at MYR3.05m, compared with MYR82,000 a year ago, while revenue grew 35% to MYR11.86m from MYR8.79m. (Source: The Edge Financial Daily) | |
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