FW: AmBank Research - Boilermech : To improve in 2HFY18 BUY, 23 Nov 2017

 

 

STOCK FOCUS OF THE DAY         

Boilermech : To improve in 2HFY18                                                                          Buy

 

We are upgrading our recommendation on Boilermech Holdings from HOLD to BUY. Due to the sharp drop in its share price, our fair value of RM1.02/share now implies an upside of 22.2%. Our fair value is based on an FY19F PE of 20x. Boilermech is currently trading at FY18F PE of 17.3x and FY19F PE of 16.4x. We forecast Boilermech's dividend yields at 1.8% each for FY18F and FY19F.

 

Although Boilermech's 1HFY18 results appear to be below expectations, we are maintaining our earnings forecast. We expect Boilermech's order book and recognition of progress billings to pick up in 2HFY18. Boilermech said its order book has improved and the group is optimistic on its prospects. We think that Boilermech would be able to secure more contracts as CPO production is rising and plantation companies are increasing their capital expenditure again. Boilermech's net profit declined by 6.4% from RM10.1mil in 1HFY17 to RM9.5mil in 1HFY18. Revenue slid by 12.9% YoY to RM101.2mil in 1HFY18. In spite of the fall in revenue, gross profit margin rose from 19.7% in 1HFY17 to 23.4% in 1HFY18 due to a 16.9% drop in the cost of sales.

 

Others :

Gent Plantations : Decent FFB output growth in 9MFY17                               Buy

IJM Corp : Bags RM1.5bil BOT highway project in India                                    Buy

Telekom M’sia : Watch out for more aggressive UniFi campaigns               Buy

TSH Resources : Strong FFB output growth in 3QFY17                                      Buy

C.I.Holdings : Key issues remain                                                                                Hold

Econpile : 1QFY18 net profit grows 29% YoY                                                         Hold

KL Kepong : Another impairment in 4QFY17                                                         Hold

MBM Resources : Alloy wheels unit still shaky                                                    Hold

MSM Malaysia : Back in the black in 3QFY17                                                         Hold

TH PLantations : Tax rate normalises                                                                       Hold

WCT Holdings : 9MFY17 core net profit jumps 58% YoY                                   Hold

YTL Power : 1QFY18 results a shade below                                                            Hold

 

QUICK TAKE

Malakoff Corp : Little jolts of disappointment                                                     Hold

 

 

ECONOMIC HIGHLIGHTS

Thematic/Strategy : Short-term impact should there be an impeachment

 

 

NEWS HIGHLIGHTS

Cryptocurrencies : Bank Negara reins in digital currencies

E-Payment : Tencent plans e-payment launch in M’sia next year

Kerjaya : Posts record profit in 3Q, bags RM245m job

Digital Economy : To contribute 5% to 10% more to GST revenue — Deloitte

 

 

 

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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